Every Single Person in Norway Became a Millionaire Last Week. Here's How.

The news: On Wednesday, everyone in Norway became a theoretical millionaire as the country’s sovereign wealth fund — the largest in the world — soared to 5.11 trillion crowns ($828.66 billion) due to high global oil and gas prices.

Now not only is Norway the second-happiest place on Earth (according to the UN’s World Happiness Report 2013), but they’re also amongst the world's most financially secure citizens.

The background: In 1969, Norway struck oil in the North Sea. Today, it is the world's seventh biggest oil exporter, Europe's largest oil producer and the world's second largest natural gas exporter. The fund was set up in 1990 and now is the largest of its kind in the world, followed by the United Arab Emirates’ at $800 billion, Kuwait at $400 billion, and Russia and Kazakhstan at about $180 billion each. Norway’s fund is invested in the developing economies of Brazil, Russia, India and China, as well as real estate throughout the world.

Norway’s fund, which collects taxes from oil profits and re-invests the money, mostly in stocks, is worth about $177,000 per Norwegian. The fund owns 1% of the globe’s stocks and a vast empire of real estate, but the government is only allowed to use 4% of it a year. With Norway's liberal government, oil profits — including from state-run Statoil — are taxed at 78%, compared to the United State's effectively taxing companies like ExxonMobil at 42% and Chevron at 43.4% in 2012.

The money doesn’t go directly to the nearly 5 million Norwegian citizens, but is instead funneled into a savings for a rainy day.

Now that's smart investing. With the stipulation that the government is only allowed to touch 4% of it, the fund has been maturing steadily since it was created in 1990 to be used on a rainy day. When that rainy day does roll around, there will likely be a huge payout to citizens, whether it's in the form of investment in a critical need or a bailout.

Norway’s fund has some detractors, who argue that its investment strategy is risky and oil-dependency is dangerous with the growing proliferation of alternative energy solutions. But its success only proves that it's smart use of money in this volatile economic global environment. (And one can only imagine that our spend-happy U.S. politicians would have dunked into that account years ago.) With the burgeoning natural gas market in U.S., we should be thinking about how, like Norway, we can — by taxing and regulating — create future wealth for this country, not just debt.