“Koreans will be in real trouble if they retire like this.” Larry Pink claimed ‘this’ as a way to escape the swamp of poverty [★★글로벌]

Let’s compare investing in gold and investing in a new home. Buying a house creates a financial multiplier effect because you have to decorate and repair it. Starting families and filling homes with children all create economic activity. So what about gold? Gold is just stored in a safe. It’s a great store of value, but it doesn’t generate economic growth.

This example is included in a letter sent to investors by <a href="https://www.world-today-news.com/larry-fink-ceo-letter-blackrock/" title="Larry Fink CEO Letter | BlackRock“>Larry Fink, chairman of BlackRock, the world’s largest asset management company, in March of this year.

The analogy of investing in gold and houses is that wealth should be created through wise investments in the financial markets such as stocks. (The multiplier effect referred to here refers to a virtuous cycle in which investment and consumption create a chain ripple effect, increasing economic growth.)

The reason why the chairman of BlackRock, who moves astronomical assets worth 1.55 trillion won, used the analogy of investing in gold and houses in his investor letter is because of ‘retirement poverty’, which is called a silent economic crisis.

Typically, the topics of Chairman Larry Fink’s investor letters were sustainable management, carbon reduction, and ESG management.

However, in three investor letters, starting from 2019, 2023, and this year, Chairman Pink stated that a ‘hopeful system’ for retirees should be established, and that ‘investor faith in the financial market’ should be at the center of it. It is emphasized that you must hold on to it.

Why is Chairman Larry Fink so interested in ‘middle-aged people’s financial investment’?

That’s because a significant portion of the astronomical assets that make up BlackRock are coming from the pockets of retirees.

As we look at it from the perspective of retired customers and collect various market data, there is growing concern that retirement poverty will lead to a serious economic crisis.

In fact, in the face of global low birth rate and aging, public pension systems designed by individual countries are never sufficient to guarantee the future of retirees.

In addition, retirees’ investment activities, such as savings and stocks, that are accumulated in advance for a comfortable retirement are minimal.

Chairman Larry Fink said he began to seriously consider this issue when his mother died in 2012.

During the process of sorting out my parents’ assets at the time, I was surprised to find that my parents had accumulated more assets than I thought. The secret is that his father invested money in the stock and bond markets rather than burying it in the bank.

I did the calculation. If your parents had $1,000 invested in the S&P 500 in 1960, that $1,000 would have been worth nearly $20,000 by the time they reached retirement age in 1990. This is more than double the amount you would have if you just put it in your bank account. (If my parents were alive today, with this money), they could live comfortably until they are 100.

Chairman Larry Fink points out that unlike his parents, most people do not have this investment opportunity and emphasizes that the most realistic way to avoid being trapped in retirement poverty is to invest with faith in the financial market.

he is “Even in the United States, where capital markets have been very successful over the past few years, only 58% of Americans are investing in the stock market.“I regret it.

An American or foreigner who invested $1,000 in an S&P 500 tracking fund 10 years ago now has over $3,000, while someone with $1,000 in cash under the mattress has seen its value drop further due to inflation.This is the power of investment” he emphasizes.

He believes that just as the Internet has transformed the music industry – moving from LPs, cassette tapes and CDs to streaming – it can change citizens’ attitudes toward retirement planning by strengthening their confidence in investing in financial markets.

It is at this point that we realize how important the ‘K Value Industry’ promoted by the current government is for the sustainability of the Korean economy.

<img loading="lazy" src="https://pimg.mk.co.kr/news/cms/202410/26/news-p.v1.20241022.0094364994054bb9b363b9c0bf8e8de6_P2.jpg" orgwidth="500" orgheight="150" alt="지난 5년 간 96% 상승한 미국 S&P 500 지수 “/> news/cms/202410/26/news-p.v1.20241022.0094364994054bb9b363b9c0bf8e8de6_R.jpg" data-width="1291" data-height="387" /> Enlarge photo US S&P 500 index up 96% over last 5 years “/> news/cms/202410/26/news-p.v1.20241022.31e5628dc5d94a17be16b97c9fe73b64_R.jpg" data-width="1273" data-height="363" /> Enlarge photo Korea’s KOSPI index has risen 23% over the past five years