On [[irrational exuberance]] P139 Shiller gave an illustration — Suppose most owners of some rising stocks are becoming multi millionaires on paper, but their current living standard is anything but. At some point, some owner would want to sell her shares to start living a little more like a multimillionaire. It’s only rational — we buy-n-hold investment assets not for the sake of holding, but to improve our existence on earth.

(On a related note, Rong.Zhu said, You don’t want to pass on with too much unspent money, but somehow I don’t worry about that… )

• For my wife, “living like …” means better home — newer, higher floor, even if it means lower investment return.
• For Deepak CM, “living like ..” means seeking then living the better life as immigrants. Perhaps it also means “spend freely without calculating, without economizing.”
• For (half not all) my NY cohort, “living like ..” means Ivy league and school-district home (usually big sqft). In this sense, they are not forced to sacrifice for it. Instead, they willingly sacrifice other things for this important priority.
• For me, the answer is in
  1. my answer to sis: G3 specific goals@investment effort
  2. best Spends@100k windfall

— Assuming Shiller’s stock keeps rising …
Q2: would you prefer AA) to grow your paper net worth by holding the appreciating stock, or BB) (cash-out) sacrifice that growth for a better current life (… Life is short)?
Note that AA satisfies the FOMO, exclub desire.

Market risk is a huge risk we have hitherto ignored, also the (arguably) biggest difference between a millionaire vs paper millionaire. Without market risk, this stock would present an arbitrage.

— Q1: what if Singtel stocks make most Singapore citizens paper millionaires (or half-millionaires)? Singaporean’s average wealth level would leapfrog to top of the league table. So what?
( Q1b: what if Nokia stock makes most Finnish citizens paper millionaires? )

A: In such a case I think Singapore rEstate would appreciate further, making our lives somewhat poorer just like in Hongkong. If Singaporeans must reside and consume/spend [2] only in Singapore and if without foreign labor[1], then they would find that many services become expensive although imported goods would remain affordable. That would be drive force for more automation, more self-service, but many retirees really prefer human service.

[1] In reality, Singapore relies heavily on foreign construction workers, foreign maids, service sector foreign workers (from SEAsia + China) to control labor cost. See SG reliance@low-wage foreign workers: maintain cost+competitive
[2] In reality, Singaporeans really like to spend their wealth overseas.