Where To Get Rich
by Dr. Steve Sjuggerud
August 21, 2006
Who rang up 150,000 unpaid parking tickets in New York City over five years?
Diplomats from the United Nations…
It wasn’t the folks from Canada or the United Kingdom... Between the two, there wasn’t a single parking violation. Meanwhile, diplomats from the African nation of Chad had an average of 124 parking violations a year.
What does this have to do with getting rich? Let me explain…
It turns out, the amount of corruption in a country is highly correlated to the amount of income per person in that country.
So if you want to turn your dollars into more dollars, you’ve got to be investing in countries that have very little corruption, or, probably even better as an investor, countries that have made significant improvements in the level of corruption in recent years.
The Economist magazine says, “In the case of parking violations, diplomats from countries with low levels of corruption behaved well, even when they could get away with breaking the rules. The culture of their home country was imported to New York, and they acted accordingly.”
Chad has the dubious distinction of being the world’s most corrupt country, according to the latest Corruption Perceptions Index put out by Transparency International. Canada and the United Kingdom, it turns out, are even less corrupt than the United States, according to the study.
When it comes to generating wealth, corruption matters. Income per person in Chad is about $600 – or $50 a month. Meanwhile, income per person in Canada and the United Kingdom is around $35,000 a year. (This data is nominal GDP per head, from the IMF.)
What country is the least corrupt? According to Transparency International, it’s Iceland… and that lack of corruption has helped lead to spectacular wealth creation.
Iceland’s ICEX-15 stock index is up 400% in the last five years. And it’s up 1,700% since the Index started in 1992. Property prices have doubled in just a few years. And can you believe this? Income per head in Iceland is actually higher than Canada and the United Kingdom. It’s true.
I’ve put millions of investment dollars to work in Iceland over the years. Three years ago, I invited my subscribers on a trip to Iceland with me. Thirty folks came. We visited a few companies and met with local brokers. I wanted my readers to see what I knew… that Iceland is a great – and safe – place to invest. Readers who invested back then made a lot of money.
Now, we’re investing in Iceland again… In the latest issue of True Wealth, I recommended a stock that trades in the U.S. that has spent hundreds of millions of dollars investing in Iceland. And of course, I reiterated my favorite investment for the next 10 years, which is a specific Icelandic bond.
Iceland is a great example of an uncorrupt country. For an example of a country that has improved, Nicaragua fits the bill. I wrote about my history of investing in Nicaragua in the August 14 edition of DailyWealth. Nicaragua is a far riskier bet than Iceland, of course.
When opportunities for great investment returns in these places appear, don’t miss ‘em. Right now, I like Iceland… a country off most investor’s radars… just the way I like it.
Good Investing,
Steve
Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
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