What do the ‘young and rich’ groups do in Korea?

Many Koreans are classified as “young and rich” with a fortune of 6.6 billion won ($5.3 million) and an average of 1.7 homes.

More than 30% of these are office workers, followed by doctors and lawyers at 20%. People who inherit most of their wealth from their parents now own nearly twice as much wealth as those who are rich on their own.

According to Korea Times, this is the result of the Korea Rich Report 2022 published by Hana Financial Group on April 13 based on an online survey. This is the first time that Hana’s report has compared the similarities and differences between the “young and rich”, people aged 49 and under, and the “rich and old”, people over 50.

The report is based on the results of an online survey of 708 rich people with financial assets of more than 1 billion won, with 131 people under 49 years old and 577 people under 50 years old.

The group of older millionaires owns an average of 8 billion won in assets. While the “young and rich” group is those who are under 49 years old and have financial assets of more than 1 billion won.

Nearly four out of 10 people in the “young and rich” group live in three popular areas south of Seoul, Gangnam, Seocho, and Songpa. In addition, the “old and rich” group also lives in the south of Seoul, accounting for 37% and 26% living in other areas in the capital Seoul.

However, both groups share the common feature of real estate accounting for 60% of assets and financial assets accounting for 40%.

In terms of financial assets, both groups spend most of their money in savings and then investing in stocks.

In addition, 45% of rich people in Korea said their main source of wealth comes from earned income, while 23% from business profits and 18% from inheritance. However, three-quarters of the “young and rich” group have more than two sources of income including earned income, business and property.

Those whose assets only come from earned income have an average annual salary of 210 million won. While those with both salary and income from property ownership had an average annual income of 480 million won.

Inherited people own an average of 12.8 billion won in assets, while those who are made rich by earned income own 3.8 billion won.

Regarding virtual assets, 21% of the “young and rich” group and 5% of the “old and rich” group said they invest in cryptocurrencies.

Also according to the survey, 30% of the “young and rich” group in Korea work in companies, 20% work in medicine and law, 15% are self-employed. Only 0.8% work in the state.

Unlike the elderly, the “young and rich” group prefers commercial real estate, while the “old and rich” group prefers land investment. Accordingly, commercial real estate accounted for 44% of the total property investment of the “young and rich” group, while the “old and rich” group was 36%.

Notably, 30% of the “young and rich” group borrowed capital from financial companies to invest in real estate and financial assets.

In 2021, the number of young people under the age of 30 in Korea buying a home has also set a record. The reason is that the selling price of houses in Korea has increased rapidly in the past two years, causing many young people to quickly enter the real estate market by taking a bank loan for fear that they will not be able to quickly. can never own a house in their name if they wait to earn enough money.

Specifically, according to data from the Korea Real Estate Commission, buyers in their 30s and younger accounted for 31% of the total apartment purchase volume in 2021. This proportion in 2020 is 29.2. % and was 28.3% in 2019.

According to Minh Thu