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You can't get a 350 sq meter rooftop home in Oslo with only 1 million dollar. That would barely get you a flat in SF/NYC/HongKong/London. It really takes $10M

You can't get a 350 sq meter rooftop home in Oslo with only 1 million dollar. That would barely get you a flat in SF/NYC/HongKong/London. It really takes $10M to be comfortable.

adrianN 8y ago
A million dollars at a conservative 1.5% after taxes and inflation would pay for all my current expenses. If I didn't have to work I'd likely move somewhere with lower cost of living.
- jkaplowitz 8y ago
  What safe withdrawal rate are you using for your math before taxes and inflation? I'm doing my math with 3% and I am wondering what others decide.
  - user5994461 8y ago
    I'd say 1 to 3% to be conservative, depending on what taxation you get and which funds you have access to.
  - wycs 8y ago
    2%. Seems crazy low to some, but I put very conservative numbers in my MonteCarlo simulations.
- user5994461 8y ago
  Congratulations. You can support a frugal lifestyle with no wife and no children in a cheap location. That's not what people are struggling for. The interest won't cover the rent in a major city, especially the rent for a place big enough for a family.
  - geomark 8y ago
    If you were debt free with 1 million USD in cash and mutual funds would you choose to live in a major city? So many major cities worldwide have high levels of pollution which has a deletirious effect on both physical health and mental performance. You trade that off against having access to the things big cities offer (services, entertainment, etc). It might seem worth the tradeoff if you are single and don't want to own anything. But making that choice for wife and kid seems tough.
    - user5994461 8y ago
      >>> If you were debt free with 1 million USD in cash and mutual funds would you choose to live in a major city? Like everyone else, I don't get to choose. Do you realize that people have roots, family, friends? Do you realize that border and immigration control is a thing? It's disingenuous to consider changing city as a trivial option. When someone has $1M, it's because he is in a location that made it possible in the first place.
      - geomark 8y ago
        I am aware of all those things, because I did it. So I know it is not trivial; I'm not being disingenuous at all. I made the trade offs for my family. I am just wondering what other people's thoughts are.
    - deleted 8y ago
      [deleted]
  - icantdrive55 8y ago
    In America, I've met very few guys who really wanted the wife, and kids. I look back at most families, and so many started with, "You're what?". In fact, many of us don't want the things we are told we need? I think cute Hollywood movies have programed what we say? (And yes, I know some of you got out of high school/college and wanted the wife, and family. I'm just saying many of us didn't, but don't say anything. Here is another story. It's pretty easy to be anonymous, and truthful.)
jkaplowitz 8y ago
Meanwhile I've done the math and 2 million USD would let me live my current comfortable middle class lifestyle (single and childless) indefinitely here in Montreal with excessively conservative financial assumptions, without earning income, and without drawing down the principal. That budget includes more than mere necessities, like vacations and tech purchases. That's not my current net worth, to be sure, nor would I necessarily stop earning income if it were. It's just a nice example to highlight of a world-class city that isn't that expensive all things considered.
- deleted 8y ago
  [deleted]
- manquer 8y ago
  It is considerably harder to make 2 million in Montreal than say London/NY/SF etc, with the high cost of living in these locations it is easier to spend as you point out. If you already had money the perhaps settling in a Montreal is a good idea, but to make that kind of money you will need to choose to live in a place where money is easier to make.
  - jkaplowitz 8y ago
    In my case, I have spent most of my life so far in places like those you listed and am a new arrival in Montreal. But tech workers native to Montreal who consult remotely for SF/NYC tech companies or VCs after spending some years doing a US work stint for networking purposes can definitely build up savings rapidly. I know one such example personally.
- comboy 8y ago
  How long did you assume you'd be living and how did you assume to store this value? Because if left on it's own, just 30 years from now these $2M will likely have much lower purchasing power (even if stored on savings account and even no black swan financial event happens during that time).
  - milesvp 8y ago
kranner 8y ago
I think GP means they don’t need a 350 sq meter rooftop home in Oslo to be happy.
martin_bech 8y ago
Well.. this guy had around 200m USD.. so..
semi-extrinsic 8y ago
FWIW that apartment in Oslo probably costs around $5M by itself. He also has several other properties around the country in the same price range. I would not be surprised if he owns real estate worth $20M+. Official numbers say close to $100M taxable income in 2017.
- kzrdude 8y ago
  And still, personal bankruptcy is waiting for him now. I'm curious what kind of impairment (none? or tilt or insomnia or worse?) lead him to be this reckless, that he could lose more than what he invested.
  - user5994461 8y ago
    It's leveraged. The gain or loss is a multiple of the difference, not necessarily linked to the initial sum. He was probably betting a few millions on what appeared to be a relatively safe trade, then a rare succession of events lead to a 1:100 ratio in the other way.
    - kzrdude 8y ago
      That's not an excuse for engaging in a trade where one can lose that much. Both the investor and market should ensure there is an upper limit for what can be lost. The market to protect itself (since it or the the insurance mechanism lost > $100 million in this case).
      - mortehu 8y ago
        You can't set an upper limit for what can be lost unless you force other traders to buy what a short seller is covering. Non-deliverable futures markets with no shorts are not possible, and it isn't practical to make every futures contract deliverable.
        Dylan16807 8y ago
        The price of electricity is only going to go so high, though. Without leverage, it's vastly harder to lose all your money on a short, because the asset has to double in price. In this case, the spread peaked at about 38:56. Without leverage he'd be down 10 or 20 percent.
deleted 8y ago
[deleted]

You can't get a 350 sq meter rooftop home in Oslo with only 1 million dollar. That would barely get you a flat in SF/NYC/HongKong/London. It really takes $10M to be comfortable.

adrianN 8y ago

A million dollars at a conservative 1.5% after taxes and inflation would pay for all my current expenses. If I didn't have to work I'd likely move somewhere with lower cost of living.

jkaplowitz 8y ago
What safe withdrawal rate are you using for your math before taxes and inflation? I'm doing my math with 3% and I am wondering what others decide.
- user5994461 8y ago
  I'd say 1 to 3% to be conservative, depending on what taxation you get and which funds you have access to.
- wycs 8y ago
  2%. Seems crazy low to some, but I put very conservative numbers in my MonteCarlo simulations.
user5994461 8y ago
Congratulations. You can support a frugal lifestyle with no wife and no children in a cheap location. That's not what people are struggling for. The interest won't cover the rent in a major city, especially the rent for a place big enough for a family.
- geomark 8y ago
  If you were debt free with 1 million USD in cash and mutual funds would you choose to live in a major city? So many major cities worldwide have high levels of pollution which has a deletirious effect on both physical health and mental performance. You trade that off against having access to the things big cities offer (services, entertainment, etc). It might seem worth the tradeoff if you are single and don't want to own anything. But making that choice for wife and kid seems tough.
  - user5994461 8y ago
    >>> If you were debt free with 1 million USD in cash and mutual funds would you choose to live in a major city? Like everyone else, I don't get to choose. Do you realize that people have roots, family, friends? Do you realize that border and immigration control is a thing? It's disingenuous to consider changing city as a trivial option. When someone has $1M, it's because he is in a location that made it possible in the first place.
    - geomark 8y ago
      I am aware of all those things, because I did it. So I know it is not trivial; I'm not being disingenuous at all. I made the trade offs for my family. I am just wondering what other people's thoughts are.
  - deleted 8y ago
    [deleted]
- icantdrive55 8y ago
  In America, I've met very few guys who really wanted the wife, and kids. I look back at most families, and so many started with, "You're what?". In fact, many of us don't want the things we are told we need? I think cute Hollywood movies have programed what we say? (And yes, I know some of you got out of high school/college and wanted the wife, and family. I'm just saying many of us didn't, but don't say anything. Here is another story. It's pretty easy to be anonymous, and truthful.)

jkaplowitz 8y ago

Meanwhile I've done the math and 2 million USD would let me live my current comfortable middle class lifestyle (single and childless) indefinitely here in Montreal with excessively conservative financial assumptions, without earning income, and without drawing down the principal. That budget includes more than mere necessities, like vacations and tech purchases. That's not my current net worth, to be sure, nor would I necessarily stop earning income if it were. It's just a nice example to highlight of a world-class city that isn't that expensive all things considered.

deleted 8y ago
[deleted]
manquer 8y ago
It is considerably harder to make 2 million in Montreal than say London/NY/SF etc, with the high cost of living in these locations it is easier to spend as you point out. If you already had money the perhaps settling in a Montreal is a good idea, but to make that kind of money you will need to choose to live in a place where money is easier to make.
- jkaplowitz 8y ago
  In my case, I have spent most of my life so far in places like those you listed and am a new arrival in Montreal. But tech workers native to Montreal who consult remotely for SF/NYC tech companies or VCs after spending some years doing a US work stint for networking purposes can definitely build up savings rapidly. I know one such example personally.
comboy 8y ago
How long did you assume you'd be living and how did you assume to store this value? Because if left on it's own, just 30 years from now these $2M will likely have much lower purchasing power (even if stored on savings account and even no black swan financial event happens during that time).
- milesvp 8y ago

kranner 8y ago

I think GP means they don’t need a 350 sq meter rooftop home in Oslo to be happy.

martin_bech 8y ago

Well.. this guy had around 200m USD.. so..

semi-extrinsic 8y ago

FWIW that apartment in Oslo probably costs around $5M by itself. He also has several other properties around the country in the same price range. I would not be surprised if he owns real estate worth $20M+. Official numbers say close to $100M taxable income in 2017.

kzrdude 8y ago
And still, personal bankruptcy is waiting for him now. I'm curious what kind of impairment (none? or tilt or insomnia or worse?) lead him to be this reckless, that he could lose more than what he invested.
- user5994461 8y ago
  It's leveraged. The gain or loss is a multiple of the difference, not necessarily linked to the initial sum. He was probably betting a few millions on what appeared to be a relatively safe trade, then a rare succession of events lead to a 1:100 ratio in the other way.
  - kzrdude 8y ago
    That's not an excuse for engaging in a trade where one can lose that much. Both the investor and market should ensure there is an upper limit for what can be lost. The market to protect itself (since it or the the insurance mechanism lost > $100 million in this case).
    - mortehu 8y ago
      You can't set an upper limit for what can be lost unless you force other traders to buy what a short seller is covering. Non-deliverable futures markets with no shorts are not possible, and it isn't practical to make every futures contract deliverable.
      - Dylan16807 8y ago
        The price of electricity is only going to go so high, though. Without leverage, it's vastly harder to lose all your money on a short, because the asset has to double in price. In this case, the spread peaked at about 38:56. Without leverage he'd be down 10 or 20 percent.

deleted 8y ago

[deleted]