The secret of Norway to have the three youngest billionaires in the world

The secret of Norway to have the three youngest billionaires in the world

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21, 22 and 24 are their ages and all three are Norwegians.

It’s about two women and one man who top the list of the 20 youngest billionaires (under 40) in the world of Forbes magazine .

The first, Alexandra Andresen, is not new to this list. In 2016, at 19 years old, he also led her . She and her sister Katharina, second in the ranking, received their fortune from their father, who owns the Ferd company, dedicated to real estate and investments.

Johan H. Andresen transferred 42.2% of the family business to each one in 2007, when Alexandra was 10 years old.

Forbes places the wealth of each of them at US $ 1,200 million .

In the third position is Gustav Magnar Witzoe, who accumulates US $ 1,600 million.

This is shown in one of your photos on your Instagram account.

He also received his fortune from his family, after his father gave him a significant percentage of the capital of his company (Salmar), considered one of the leaders in the production of farmed salmon.

And although the answer to why these three young Norwegians are billionaires may seem as simple as they inherited their fortunes, there are factors that go beyond pure luck at birth.

Factors that revolve around the Nordic family dynamics , its educational system and its economy.

Rich among rich

Why does Norway have the three youngest billionaires on the planet (number 16 on the list, Caroline Hagen Kjos, is also Norwegian)? I asked Oyvind Bohren, a professor of finance at the Norwegian Business School.

“The partial answer is that Norway is one of the richest countries in the world, rich parents are needed to become a rich heir,” he replies.

And this photo that Alexandra posted on her Instagram account reaffirms it. Appears next to his father and his sister and titled: ” The owners of Ferd .”

Norway is among the ten richest countries in the world, according to Fortunemagazine .

“The ranking was based on information from the International Monetary Fund (IMF) of October 2017 on the Gross Domestic Product per capita in relation to the purchasing power parity, that allows comparing the currencies of the countries with respect to the cost of products and use to value the economy of one country in relation to others, according to the IMF, “explains Fortune .

Behind Qatar, Luxembourg, Singapore, Brunei and Ireland, Norway, with its little more than 5 million inhabitants, is in the sixth position (US $ 70,590).

Not everything is oil

Although the obvious explanation of the origin of this wealth is oil, Norway has opted to diversify its investments.

Oil platform in the Norwegian sea
Copyright of the image MARCEL MOCHET / AFP / GETTY IMAGES
Image captionAfter the oil bonanza, the Norwegian economy was transformed and the country has not stopped investing the profits obtained in a gigantic sovereign wealth fund, a giant savings account.

In 1990, the Norwegian Petroleum Fund was created, which is currently the largest sovereign fund in the world , with a portfolio of more than US $ 1 billion .

That fortune was made thanks to the investments made with the proceeds from the exploitation of hydrocarbons since the early 1990s.

” Is it easy to be rich and young in Norway? ” I ask Bohren, who answers from Oslo:

“It’s easier than it used to be before we had oil, now there are many richer people in this country , both young and old.”

“Reinvent the business”

Norway’s desire to diversify its economy has been transferred to family businesses.

Ferd website
Copyright of the image FERD
Image captionIn this image taken from Ferd’s website, Johan H. Andresen, owner and owner of the company, says: “Being able to recruit in two consecutive opportunities the personnel of the highest positions is an enormous strength for a family group. It’s something I’m really proud of. “

An example of this is the company of the family of Alexandra and Katharina.

The company’s Andresen was born after his ancestors bought snuff factory in 1849. They became the Ider tobacco industry Norway for more than 150 years.

The company was transformed by subsequent generations and is now a group dedicated to real estate and investments in financial assets.

“In addition to the group’s purely commercial activities, Ferd has an extensive participation in social entrepreneurship,” says his website.

Ferd is an excellent example of the importance of “reinventing” for Norwegian family businesses, says Marina Mattera, professor of Economics and International Business at the European University.

Scandinavian countries also value the family very much, but it is done in a different way

Marina Mattera, European University

“A fundamental factor that Norway has is that there is a very great added value in the reinvention of the business : not because we started as a tobacco company, we are going to continue to be a tobacco-only company,” he says.

“And it’s not just happening in Norway, it’s also observed in Sweden and Finland, even in Germany and Denmark.”

The opportunity to dare to reinvent, innovate and transform comes hand in hand with a key element of Norwegian society: education.

Encourage creativity

Norway is among the 20 countries whose students solve group problems better, according to a new test of the Program for the International Assessment of Pupils (PISA, for its acronym in English).

Norwegian school
Copyright of the imageASERUD, LISE / AFP / GETTY IMAGES
Image captionEducation in the Nordic countries has been admired in many parts of the world.

And if there is something key to the success of a company, it is that: work as a team and do it creatively.

“The economies of the Nordic countries and Norway, in particular, are strongly influenced by an educational sector that is very focused on learning and developing creativity,” says Mattera.

It is something – the teacher reflects – of what many educational systems in the world lack, since they tend to focus on grades as a measure of academic success.

“The most important thing is for the boy to pass the subject and we do not stop to think what he learned, he could have taken a big note, but that does not necessarily reflect if he learned.”

“In the Nordic countries, and Finland is always referred to, but Norway follows the same model, there are three teachers in the same classroom.There are three people attending a group of 30 people.That is a level of attention to the student awesome . “

A mother playing with her son in the snow
Copyright of the imageISTOCK / GETTY IMAGES
Image captionBetween the mountains, glaciers and fjords the little more than 5 million Norwegians live.

And that allows the student to really focus on learning, on developing a divergent and creative thinking.

Although many of the young billionaires (included in the Forbes list ) received their family assets, it is clear that both parents and children are aware that they must ensure the continuity of the family’s business.

“The fact that these countries have very high rates of successful family businesses, which happen from father to son, reflects the vision of their citizens, on the one hand, of the importance of the family to continue with the business and, on the other, to have a creative education to reinvent constantly “, explains the academic.

The Scandinavian model

According to Mattera, it is sometimes thought that in general “Latinos, Spaniards, French people, Italians are the ones who value the family the most”.

Norwegian family
Copyright of the image ISTOCK / GETTY IMAGES
Image captionSome Nordic families prefer to transfer the inheritance to their children while the parents are alive.

“What happens is that the Scandinavian countries also value the family very much, but it is done in a different way: we have a very multi-active culture (based on relationships) and they have a very active linear culture (based on planning). and work), where the results stand out “, says the teacher.

In addition, there is the Scandinavian model .

“Norway (as a society) has few hierarchies and that also happens within families, it’s a growing trend, so a possible explanation for the early transfer of wealth is that parents consider their children part of the company. family (defined in its broadest sense) even when they are very young, “says Bohren.

“Therefore, seniority and position within the family are less important and this is also observed when deciding who should do what in the family business , however, this is only a speculation, because I do not know of an investigation reliable on this subject “, clarifies the professor.

Reflection of society

Another interesting factor to analyze is that the transfer of fortune is made in life, which for some experts may reflect the desire to avoid problems after the death of the owner, which often leads to family conflicts , the dissolution of the company or sale .

A young woman
Copyright of the image ISTOCK / GETTY IMAGES
Image captionIn the 2017 Global Gender Gap Index, the World Economic Forum, Norway ranks second as the country with the highest gender equality.

For Mattera that is a way to ensure that the company will not end.

“If I am the founder of this company and I divide among my children a patrimony as important as the one we are talking about in these cases (of the youngest rich people in the world), I can talk to them, make sure that the relationships are good and that each one is clear about their role , although they will not assume it immediately, “says the teacher.

None of the Andresen sisters is still actively involved in the company.

The oldest is studying at a Dutch university and the youngest is focused on her successful career as a rider, as you can see on her Instagram account.

Both have the same share percentage of the company.

“In this way, neither of the two can assume a more protagonist role than the other, it promotes that decisions are more consensual, that both daughters have the same probability of success in the future and this balance between the members of the family that many Norwegian companies, and Nordic in general, not only be successful but continue to be family companies “, says the teacher of the European University.

In addition, the Nordic societies have designed policies to avoid discrimination between children and to promote gender equity.

In fact, according to the Global Gender Gap Index of 2017, carried out by the World Economic Forum, the three countries with the highest gender equality in the world are: Iceland, Norway and Finland.

Norway

“In the case of Norway, it has been an intelligent society and the great wealth that oil represents is being used to promote policies of equal opportunities and, in general, very advanced policies in all senses,” he tells BBC. Professor of Economics at the University of Navarra, José Luis Álvarez.

And is that in the Human Development Index 2016 of the United Nations, Norway was in first place among 188 nations as the best country on the planet to live.

Perhaps that is one of the reasons that explains why Norwegians are the happiest people in the world , according to the UN World Report on Happiness 2017, which analyzed the situation in 155 countries.

Tax reasons

For Álvarez, it is no coincidence that the three youngest billionaires on the planet are from Norway and find part of the explanation in the tax field.

Map of Norway
Copyright of the image ISTOCK / GETTY IMAGES
Image captionIn Norway anyone can know the income of another citizen, because the information is made public on the internet.

“To pay less taxes, it is better for families to cede this wealth to their children, especially when they are very young, even when they are minors,” he tells BBC.

“That way, they avoid some of the taxes they would pay if that wealth was s or so in the hands of the father or mother.”

And is that Norway is among the few countries in the world that have a wealth tax on wealth , “which requires rich individuals to pay almost 1% of their net worth annually,” explains Forbes magazine .

“In Norway only this tax is paid after 17 years,” says the researcher at the University of Navarra. “The tax levies the net wealth, that is, the patrimony less the debts”.

Inheritance tax

In 2014, Norway eliminated the inheritance tax.

Salmon farm
Copyright of the image ERIC PIERMONT / AFP / GETTY IMAGES
Image captionNorway is the world’s largest producer of salmon.

“It was set at zero when the conservative government took office about four years ago.” This was quite surprising in a country that has traditionally used wealth and income taxes with determination to make the distribution of wealth more uniform and equitable throughout the population, “says Professor Bohren.

Therefore, if the tax remains zero, it is likely that parents tend to transfer wealth to their children sooner than they would have expected, the researcher reflects.

Álvarez sums it up in one sentence: “By giving part of my wealth to my children, I avoid problems with my inheritance by dying and avoid taxes.”

But beyond the fiscal scenario, what is clear is that Norway has not only taken advantage of its oil and being a small country but has built strong institutions and, as Professor Bohren says, “it is the country with the level of mutual trust (among its population) of the world”.

Maybe that’s really his secret.

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