2030 dreaming of retiring in their 40s,’Fire family’

“Except for the salary, the house price and stocks all went up. I think the labor value is falling, so I focus on investing in stocks rather than working at the company.”

This is the story of Minah Kim (29), an office worker in her 20s. He made a negative bankbook last year and invested 80 million won in stocks, including the money he saved, earning a profit of 24 million won (30%) in one year. He said, “It’s hard to concentrate on business as much as I used to because I made money through investment.”

Twenty and thirty households are increasingly turning their eyes to asset income from stocks and real estate ownership rather than salary. Due to the world’s overflowing liquidity, the price of assets such as real estate and stocks is soaring, and there is spreading awareness that it is impossible to accumulate wealth by collecting salaries.

This is not an unfounded idea. It has become an era in which even a house cannot be bought with only earned income.

According to KB Kookmin Bank, the ratio of house prices in Seoul to income in November of last year (PIR) was 15.6 years. In Seoul, this means that a middle-income household (in the order of income, the income of the middle-aged household) can only buy a house without spending a single penny and earning more than 15 years. The apartment price in Seoul surpassed 1 billion won in September last year, and last month it was traded for an average of 1,042.99 million won (KB Kookmin Bank).

Earned income is at the level of a turtle’s step. It even decreased in the aftermath of the novel coronavirus infection (Corona 19). As of the third quarter of last year, the average monthly earned income of households with two or more people nationwide was 3477,000 won (Statistics Office), down 1.1% from a year ago (3515,000 won). This is the largest decline since 2003 when the statistics were written.

Income squeeze is intensifying as the number of decent jobs decreases and the increase in earned income decreases, such as increasing number of non-regular workers due to difficult employment. This is the concept pointed out by Professor Cheol-Seung Lee of Sogang University in The Generation of Inequality.

By looking at the growth rate of income from the mid-20s to the mid-30s by generation, we can understand the concerns of the 20s and 30s. In the late 1960s, birth generation income rose 53% from the early 1990s to the late 2000s. Those born in the late ’70s’ income increased by 26% from the early 2000s to the late 2010s. For those born in the late 80s, income increased only 7.6% in the early to late 2010s.

The stock market is where the younger generation turns their eyes as the house prices soar to the point where they can’t even pay for it, as if they ridicule earned income.

As the KOSPI index soared 21% in two months from last month to the 21st of this month, the investment fever heated up. For four trading days until the 29th, when the KOSPI 3000 line collapsed, the KOSPI continued to decline (-164.1 points), but individual investors recorded net purchases worth 9,328.6 billion won during this period. The 20-30 generations are actively joining the ranks of these individual investors.

In fact, the number of newly created securities accounts created by the 20th and 30th generation at Kiwoom Securities last year was 1.17 million, a nearly five-fold increase from the previous year (250,000).

Kwan-ju Son, a 28-year-old office worker, puts 70-80% of his salary in his stock account. He became busy at night as he became a Seohak ant investing in US stocks. If you check the US stock market, which opens (regularly) at 11:30 PM Korean time, and make a deal, you often fall asleep at dawn. Mr. Son said, “There is no lifelong job and I am always anxious because my salary does not rise,” he said.

Yang Mo (30), who works for a foreign company, is a so-called “impoor (a person who gave up the executive officer)”. He said, “Because I am not confident of getting married, having children, and living well, my interest in promotion has disappeared.” There is no,” he said. Stock investment is what he found as a way to make money quickly. Since last year, it has rolled 20 million won in stocks and funds. Here, 40% of their monthly salary is taken off and they are buying more stocks.

Mirae Asset Retirement Research Institute surveyed 700 men and women aged 25 to 39 nationwide in May of last year, and as a result, the number one investment goal was to provide financial resources for housing purchases (31%). The number of respondents followed in order of accumulation of retirement assets (23%) and marriage funds (15%). Most young people these days prioritize buying a house and preparing for retirement over marriage.

The’Financial Independence Retire Early’ dreaming of early retirement beyond’impoor’ is also emerging. It is a new term for a person whose goal is to retire in their early 40s at the latest through economic independence. During the 2008 global financial crisis, it spread mainly among the young, highly educated, and high-income groups in the United States. While trying to raise money for retirement through’savings’ that fasten the belt, the Fire tribes in Korea have turned toward making retirement funds through stock investment.

Hair designer Choi, 30, aims to retire by collecting 400 million won in 10 years. After that, it plans to invest in high dividend stocks of 5-6% or more per annum so that living expenses of about 2 million won can come out every month. For this, retirement funds are also being raised through stock investment. Since 2017, 75% of monthly income has been poured into securities accounts and invested mainly in inexpensive (undervalued) and high dividend yield stocks. Over the four years, the total operating capital has increased to 100 million won. “I want to live by investing in companies run by competent executives with the money I have earned until I am only 40 years old,” he said.

Jeong-woo Koo, professor of sociology at Sungkyunkwan University, said, “It is a social structural phenomenon that the 20s and 30s are pursuing asset income rather than earned income these days.” It is regarded as” analyzed.

There is a noticeable increase in the number of young people who are’debt-investing’ due to excessive investment fever. The money (credit loan balance) borrowed by securities companies under the age of 30 was 420 billion won as of the end of September last year, up 162.5% from the end of 2019 (160 billion won). It far exceeded the average growth rate (89.1%) of all age groups in the same period.

In their debt-fighting procession, there is anxiety and impatience that’if you do not invest in debt, you will fall behind.’ A 30-year-old office worker said, “As soon as I received a 34 million won credit loan at the beginning of this year, I took off half and bought the stock,” he said. “At first, I hesitated, but when my friends responded,’Do you still owe it?’

There are also voices of concern over the debt struggles of the 20th and 30th generation. Seong Tae-yoon, a professor of economics at Yonsei University, said, “The number of investors who buy stocks by receiving loans from the stock market is increasing.

Reporters Ji-Hyun Yeom and Sang-Eon Yoon [email protected]