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The Korea Times

By Lee Yeon-woo
Business consultant Choi Hui-ji, 26, aims to save 70 per cent of her monthly wages. Of that, she invests about half in overseas exchange-traded funds (ETFs).
Her goal is to own a home and other income-generating real estate, and secure an income for her retirement.
“Saving just 100,000 won (US$75) a month in your teens can grow to a much larger amount than saving 200,000 or 300,000 a month in your thirties. I believe starting early and saving consistently, even if it’s a small amount, is one of the best ways to ease financial concerns in the future,” she says.

Like Choi, many young Koreans are turning their attention to investment, believing it to be the only way to create an economic ladder.
Recently, there has been a significant number of social media posts explaining how people saved 100 million won in their twenties, and they have gained widespread attention.

“I started thinking, ‘Will I ever afford a home in Seoul if I only keep saving?’” says Lee Woo-jae, a 29-year-old working in IT. “I realised that simply relying on regular income wouldn’t be enough to achieve that goal. I needed to invest to accumulate wealth, and that’s what prompted me to get started.”
“Everyone is just trying to find a way to grow their small salaries somehow,” says Yun, a 28-year-old office worker.
Traditionally, it has been people in their middle age and older who have been the primary participants in financial investments; the younger generation has held limited accumulated assets.
The large-scale entry of younger people into the asset market is an unexpected and noteworthy trend, says Han Young-sup, director of South Korea’s Economic Care Research Institute.
Seeing everyday people succeed gives the impression, ‘If they can do it, so can I’
Yang Seung-hee, a Seoul-based financial planner
Another factor driving this trend is young people’s anxiety about the future.
“I’m less focused on becoming rich and more on preparing for retirement. With concerns about pensions running out, and knowing that I can’t rely on earned income forever, I feel it’s important to start investing while I’m still young and capable,” says Ji Hyeon-seong, a 29-year-old office worker.
The growing focus on investment among the young generation is encouraging even those who were less interested to start investing.
“When I meet up with friends for a casual meal or drinks, our conversations have noticeably shifted,” Ji adds. “In the past, we used to talk about everyday things, but now the topics revolve around: ‘I heard this stock is doing well’, or ‘People are investing in that.’”
The barrier to investing has also been lowered. The government is actively rolling out measures to assist people with wealth management. They include tax benefits and the launch of retail-investor-exclusive treasury bonds.
This contrasts with the situation about 20 years ago, when Yang Seung-hee, a financial planner working for Seoul Young Tech, worked in the securities industry.

“Back then, there weren’t many tax-free investment options. Initial public offering subscriptions also had high minimum investment requirements, so only people with significant funds could take part,” Yang says.
Seoul Young Tech is a programme by the Seoul Metropolitan Government that offers one-on-one financial counselling and group education to help young residents build their assets.
However, growing interest does not necessarily translate to sufficient financial knowledge. Many young Koreans admit they follow advice from YouTube or their peers.
“In the past, only certified experts like financial managers and stock specialists gave lectures,’ Yang says. “But now, even individuals without formal qualifications are sharing their experiences of making money through platforms like YouTube. Seeing everyday people succeed gives the impression, ‘If they can do it, so can I.’”
When it comes to any investment, the most fundamental principle is understanding that there’s always a risk
Han Young-sup, director of South Korea’s Economic Care Research Institute
Nevertheless, the lack of experience and sufficient knowledge could lead to speculation, with many seeking high returns in the short term.
The Seoul Bankruptcy Court notes that, “the percentage of filings by individuals in their twenties, whose economic activities have expanded into areas like cryptocurrency and stocks, has risen steadily from 10.3 per cent in the first half of 2021 to 17 per cent in the second half of 2023.”
Han points out the clear divisions among young people: those who can invest extra money in assets, those who cannot, and those who feel stuck in between.
“When it comes to any investment, the most fundamental principle is understanding that there’s always a risk,” he says.
“If you have a strong financial foundation, you can afford to take bold, aggressive moves. But for the majority of young people who can’t, investments tend to end in failure because the ability to endure losses is key in investment.
“Without that financial buffer, they end up resorting to risky, short-term trading.
“Society has shifted towards a survival-of-the-fittest mentality. The country isn’t like Northern Europe with a strong social security system. There’s also a lot of debate around issues like the national pension’s depletion.
“The older generation largely discusses these matters from their perspective, leaving young people with little voice in the conversation,” Han adds.
“Young people are doing their best within the limited means available to them.”
Read the full story at The Korea Times.


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Lifestyle

Family & Relationships

Poorly paid and with no faith in the social welfare system, young South Koreans are buying stocks and ETFs to secure their financial future


Many South Koreans in their twenties don’t earn enough to buy homes or save for retirement. Some take risks on stock and ETF investments, and get investing tips from friends and social media videos.


Investing

South Korea

Korea Times