Month: March 2020

If you as a result of being prudent in the stock market were sitting with $2M in your stock market portfolio after 25 years, because you earned ten percent yearly and did not put your capital into real estate, would you be OK if you didn’t own your own house? Having invested during 25 years maybe you have learned a thing or two and manage to earn even more than 10%. Maybe you can earn more than $200,000 yearly from your portfolio by then. Would it be OK to rent a flat anywhere you want for a part of that income instead of owning a house outright?

It’s a question that many people have different views on. In Norway most people put the majority of their savings into their home and into their second home for recreation. You often find a 50 year old couple with a house with most of it paid down but maybe they also have a cabin in the mountains or by the sea that they have just started paying for with a large new mortgage. They might have as much as $500,000 of their net worth in real estate by then. On the other hand you rarely see a couple of their age with a stock portfolio of $2M allocated into wonderful companies that earn more than the market average. That’s mostly due to culture and education in Norway.

If people ask me, I’d say that there can be a huge advantage in learning how to do well in the stock market over the long term. Investing in yourself now and through the next years can give huge effects on your thinking about where you put your money down the line, and the effect on your net worth in many years can be dramatic. I think I have a long way to go to influence the typical Norwegian into putting less into their beloved real estate and more into wonderful companies, which as a group basically increases its value year by year more than the market. Since you’ve been reading so far, maybe you’re more curious than the average person. I’ll strive to share more good ideas with you as we go. Have a good day!