Daniel Eliasson

Well, almost. Snake, actually, and more “behind the house”.

Over Christmas, Stephanie and I went to meet up with her family in Oubaai (previously mentioned here). We had a nice time, and one day, I was treated to my first African snake experience. Awesome shit.

Alet, Stephanie’s poor mother, was about to pick up some rose branches that were lying at the back of the house to put them in the trash bin, when she realised that she was about to poke a pofadder, a quite venomous snake. After some deliberation, we called the admin people, who sent out a couple of young guys to catch the snake and release it next to the local river.

Sneaky snake.

In 2007, I officially emigrated from Sweden to Germany. In a dataset I found at SCB, I am told that I was one of 925 men to do that. The dataset breaks down Swedish emigrants during the years 2000-2008 into country and gender.

In total, 344 600 people emigrated from Sweden during these nine years, an average of about 38 300 per year. Of these, 52.8 % were men, and 47.2 % were women.

In the map below, you can see the countries of the world colour-coded after the amount of people who moved there. Data is missing on a few countries, and there is no data on some 31 000 emigrants. But the rest is here:

Please click that picture to enlarge it, m’kay?

So, what are the top 20 destinations in total, and broken down for men and women?

Some things I note about this:

• Men like the Nordic countries better than women.
• Women seem to prefer western countries. This could be because of gender inequalities in much of the world.
• Men like Thailand, women don’t.

Do you see anything else interesting, or have any ideas about why the results differ like this?

As a side note, Germany and South Africa are number 6 and 37, respectively, in the full stats. For men, they are 6 and 35, while for women, they are 6 and 37.

In response to my last post, my good friend Stefan and my evil sister Maria both replied with similar counter-arguments:

1. Buying a house allows you to leverage your money through the loan, which means that even a more modest interest rate might end up making you more money than investing a smaller amount at a higher interest, and
2. The total cost of living in a rental (rent) must be compared with the costs of owning (fees, interest, taxes) in order to make a fair comparison.

These are very good arguments, particularly 1) might give pause. In order to get a grip of how big these effects are, I went back to good old SCB for some more data, and found their data on costs renting or buying newly built flats.

Let’s assume a person or small family that wants a flat with 3 bedrooms and separate kitchen in the Stockholm metropolitan area. They decide on a flat built in 2008.

According to SCB, the yearly rent for such a flat is about SEK 103 487, while the fees in a bostadsrättsförening are SEK 57 540. Buying the BRF costs SEK 2 279 477.

I did some research on the average costs of home loans etc, and we will assume the following:

• a down payment of 10 % (SEK 227 948) is made,
• a realtor fee of 3 % (SEK 68 384) is paid,
• a top loan of SEK 205 153 is taken out at an interest of 5.5 % p.a., to be repaid in 15 years,
• a bottom loan of SEK 1 846 376 is taken out at an interest of 3.5 % p.a., to be repaid in 30 years,
• property taxes are 0 for the first 5 years, then 0.5 % for the next 5, and thereafter 1.0 %,
• the value of the BRF appreciates with 7 % p.a.,
• and finally, the alternative investment (stock index funds) appreciates with 9 % p.a.

These values should be reasonably fair to both sides of the argument. Calculating the full monthly cost of ownership (BRF fees, property tax, interest and amortisations), we assume the renter will invest the difference between this and her rent on the stock market.

Further, the renter also keeps the savings that the buyer has to put as a down payment and pay for realtor fees with.

After 30 years, the owner of the BRF sells his flat, and compares his wealth with that of the renter.

The renter has SEK 16 025 559, the (former) owner has SEK 18 501 369, meaning that the owner has an edge of 15.4 % over the renter after 30 years.

However, the bigger point I was making in my original post is that you shouldn’t think of your home primarily as an investment to make money off of, but as a purchase. One big reason for this, which I overlooked in the original post, is that it’s not liquid. You need to sell your home in order to realise your gains, and then you’d have to either move into a rental, or buy a smaller place, or one in a less popular area (such as the countryside). You might not be willing to do that after getting attached to your home.

Here’s how my last post should have been formulated:

“So, is a home an investment? Well, of course. Should you think of it as one? I don’t think so.”

But who wants to read kak like that?