Fun way to measure portfolio value - Which nations GDP per capita could you sustain?

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CaptainSaver
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Joined: Thu Sep 19, 2019 9:44 am

Fun way to measure portfolio value - Which nations GDP per capita could you sustain?

Post by CaptainSaver »

This is a useful tool for getting and keeping people interested in investing.

Our minds often focus on round number benchmarks like the first million. The distance of those goals from a low starting point can dissuade some from ever starting down the path.

Even those who are involved enough to read a forum such as this will probably find this to be a fun method to use every once in a while.

Here it is: Take the GDP per capita of a country, multiply it by 25, and you get a rough estimate of what you would need to sustain an average life in a given country per person. GDP isn't a perfect measure of this, and 4% may be to aggressive for over 30 years, yadda yadda yadda. If you find yourself on a point which makes you seriously consider retiring to that country, please do more research.

https://en.wikipedia.org/wiki/List_of_c ... per_capita

Some examples of how this can be fun and useful: The lowest GDP/capita nation of Burundi sits at $265. To sustain that at 4% you would need $6,625. To move up to South Sudan you need $7,875.

There is so much gradation that the next goal is never far away. Incremental changes can be visualized much easier. Ones imagination can work with these examples much better than with a number alone.

Our retirement accounts are closest to Belarus, with a GDP/capita of $6,487, requiring $320,000 (for two people), or Palau if we could both get by on the GDP/capita for one.

If using a single GDP/capita for a couple, were we to sell our house, we would jump up to Hungary ($451k) on a low end or Slovakia ($538k) on the high end (Or Nauru / Turkmenistan if we each needed a GDP/capita allocation).


Every year that we maximize our retirement accounts we move up the list several countries. I will begin to track this on our year end status updates and suggest you give it a try!
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