© Reuters. I bought “this” instead of cryptocurrency… Investment Strategies of the Rich in Korea
Photo = Getty Image Bank Last year, the number of wealthy people in Korea with financial assets exceeding 1 billion won was reported to have reached 420,000. It has been established that they intend to increase the percentage of deposits and installment savings over the next year, taking into account the increase in interest rates. Non-residential housing has been selected as a promising long-term investment destination. The number of emerging affluent in their 30s to 40s with financial assets of 1 to 2 trillion won has also reached 80,000. Rise of the affluent “slowed” due to cooling inventories According to “2022 Korea Rich Report” published by KB Financial Group’s Management Research Institute on the 4th, last year At the end of the year, the number of “rich Koreans” with financial assets of 1 billion won or more was estimated at 424,000, or 0.82% of the total population. Although it increased by 8.0% compared to 2020, the rate of increase decreased compared to 2019 (10.9%). It is explained that the rate of increase in the number of wealthy people has slowed as the stock index slowed last year. Total financial assets held by the rich in Korea increased by 10.1% from the previous year to 2883 trillion won. This is less than half the rate of increase in 2019 (21.6%).
Nine out of 10 rich people (385,000 people) were “asset owners” with financial assets exceeding 1 billion won and less than 10 billion won. 7.3% (31,000 people) of “high goods” with financial assets of 10 billion won or more and less than 30 billion won and 2% (9,000 people) of “ultra high goods” with financial assets of 30 billion won won or more. As of this year, the ratio of real estate to financial assets to the wealth of these wealthy was 56.5% to 38.5%. The incidence of financial assets was 2.4 times higher than that of ordinary households (79.5%, 16.1%). Following the downturn in the real estate market, the share of properties decreased compared to 2021 (58.2% for real estate and 36.3% for finance). Enlarge Image Even the Rich Couldn’t Escape Investment Losses Even the rich couldn’t escape the aftermath of the asset market crash. Of the 400 wealthy people who responded to the survey, only 17% said they’ve made a return on their investment this year. It has decreased by more than half compared to last year (42%). The percentage of ‘I suffered a loss’ instead increased from 5.8% to 18.8%. By financial investment product, stock and fund loss ratios outpaced returns by 14.7 percentage points and 6.7 percentage points, respectively.
The propensity to invest towards the stability of the wealthy has also strengthened. The sum of the shares of ‘stability-seeking type’ and ‘stable type’, which minimize the risk of loss and predict returns at the level of deposits and savings, represents 50.6%, with an increase of 4 percentage points compared to the 2021 (46.6%). The sum of the proportions of “active investment type” and “aggressive investment type” decreased by 5.2 percentage points from 27.5% last year to 22.3% this year. Looking at the long term, the real estate affluent have been more willing to increase their investments in deposits and savings over the next year. For short-term financial asset management strategies, the response rate of “I will increase investment in savings and savings” was the highest at 29%. 43.0% of respondents have chosen “non-residential accommodation” as a popular long-term investment destination for more than three years. This is followed by residential properties (39.5%), buildings and shops (38%) and land and woods (35.8%). Preference for land and forests increased by 7.8 percentage points over the previous year, showing the largest increase. On the other hand, the preference for shares (31%) decreased by 29.5 percentage points, which last year were considered promising investment destinations.
The wealthy were negative about investing in virtual assets such as private stocks and cryptocurrencies. Only 8.3% of respondents said they would invest in unlisted shares and twice as many respondents said: “I’ve invested in the past, but I don’t currently invest” (17%). The share of investment in virtual assets (7.8%) also decreased by 1 percentage point compared to last year.
In this survey, the research institute named 78,000 people aged 30 to 40 with financial assets of 1 to 2 billion won as the “emerging rich”. They accounted for 18.4% of total wealth and 3.5% (99.5 trillion won) of the total wealth of the rich. The nouveau riche answered that they had achieved wealth in the order of business income (32.2%), real estate investments (26.4%) and inheritance/donations (20.7%). Compared with the traditionally wealthy (financial assets of 2 billion won, over 50), the share of inheritances and donations is 5.2 percentage points higher.
Reporter Kim Bo-hyung [email protected]
420,000 wealthy people with over 1 billion in financial assets… 70,000 wealthy between 30 and 40 years old
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