Norway built a $3.2 trillion sovereign wealth fund from oil taxes as high as 78%, while Australia carries $1 trillion in debt despite its own fund. Singapore does it on just 17% income tax. The point: you can build your own wealth fund by owning income-producing assets instead of relying on taxes and debt.
The country of Norway just hit an incredible milestone. Their sovereign wealth fund just tripped over $3.2 trillion in value. Freaking epic, right? Australia just hit its very own milestone in the exact same fortnight. We've managed to rack up $1 trillion in debt as a country. Here's the truth about Norway. Yes, they have a lot of resources, a lot of oil fields and things like that, and they actually tax quite high on their oil and their petroleum, even up to 78%. What Norway has actually done as a country is that they've gone and taken on ownership of a whole bunch of these rights of the oil field. And as a part of that, they earn some income from all of those profits. And that profit actually starts to fund a whole bunch of their government spending. On the other side, Australia, yes, we do get some tax from the level of resources, but let's get clear around what we're talking about. Australia's wealth and resources far eclipse Norway's on any day of the week and twice on Saturdays. However, our primary income stream as a country is purely on high taxation rates of its everyday citizens. We're one of the highest Individual tax rates literally in the entire world. Singapore has its very own sovereign wealth fund as well, and in Singapore, in certain years, their sovereign wealth fund earns more than an entire year's of income tax that they collect from their citizens, and their income tax rate is usually only at 17%. Why the hell doesn't Australia? Well, hang on a moment. We actually do. It's called the Future Fund, and a lot of people aren't actually aware we even have it. What is the Future Fund? Being useful. You would hope that it's for building the future of Australia and perhaps taking some of the tax burden off everyday Australians and reducing the highest marginal tax rate or any of those different type of things. That's not the case. Every resource within that sovereign wealth fund in Australia, the Future Fund, is being used to fund the superannuation costs of promises that were made for public servants in the past. And instead of actually thinking about, well, how do we fund the future of Australia, we're just thinking about, well, How is it going to be funding some things from the past? They've got a fund. Where's your fund? Where's the money that's set up for Australia's financial future and to actually help you out in your retirement and all that type of stuff? Here's the biggest difference I want you really to take in. Norway is acting like an owner. They have gone and owning assets which are producing income. Australia is acting like a high earner who goes and spends every single dollar they earn, runs out of money, goes and gets a credit card, and then goes and starts racking up some more debt. We may be right, and I think we are, about the resources, about the sovereign wealth fund, about all the money, about all those things. But you know what? In the same breath, it doesn't really matter because you don't have any control over it. The only thing we have control over as individuals is what we do in our own lives. And so you've got to start thinking about, well, how are you showing up? Are you going to show up a little bit more like Norway or Singapore, where despite not having all the resources in the world or anywhere near as much as Australia, that you can then actually go and own assets to produce income? Or are you going to be showing up like the drunken monkey with a credit card where they just swipe and swipe and swipe and swipe and rack up huge levels of debt. That's the big lesson to think about. Where's the sovereign wealth fund that you're setting up for your life?
