'Bittu' and 'Yeongkkeul' Investment Obsessed 20s and 30s, Sighing Over Growing 'Debt Pile' [Heo Midam's Youth Report]

1 in 3 People in Their 20s and 30s Invested in Stocks After COVID-19
Youth Household Loans Up 8.5% in One Year
Experts: "'Debt Investment' Phenomenon Linked to Youths' Uncertain Future"

A loan counter inside a bank in downtown Seoul. The photo is unrelated to specific expressions in the article. [Image source=Yonhap News]

[Asia Economy Reporter Heo Midam] [Editor's Note] How is your youth remembered? From teenagers to college students and office workers, we share the joys and sorrows unique to 'youth.'

"You can't buy a house just by saving your salary.", "Stock investment is an inevitable choice."

Recently, the craze for 'Yeongkkeul (pulling together all one's soul)' and 'Debt Investment (borrowing to invest)' has been strong among young people. As housing prices soar, anxious youths are increasingly borrowing money to invest in stocks and real estate. However, as asset markets like real estate and stocks overheat, the debt of young people is also rapidly increasing. Experts analyze that the 'Debt Investment' phenomenon is linked to the anxiety of young people caused by employment difficulties.

Kim Mo (26), a job seeker who entered the stock market in the second half of last year, said, "There was almost no financial gain from putting the money I earned from part-time jobs in the bank. So I started investing in stocks." He added, "Since my family and acquaintances all invest in stocks, I naturally became interested. Eventually, I invested most of the money I saved from part-time jobs in stocks."

He continued, "I don't even think about making money from stocks to buy real estate. But when I hear people around me say they made some money from stocks, I feel like I'm falling behind," adding, "I felt like I would lose out if I didn't invest in stocks."

Like Kim, a considerable number of young people have recently started financial investments including stocks. According to a survey by the Korea Financial Investment Protection Foundation of 2,000 adults, 19% of respondents said, "I started or resumed financial investments for the first time in my life due to economic changes during the COVID-19 era."

In particular, 29% of people in their 20s started or resumed financial investments after COVID-19, a higher rate than other age groups. This was followed by ▲30s (20.5%) ▲40s (20.2%) ▲50s (12.6%).

Investors are receiving guidance about products at the fund consultation desk. The photo is unrelated to specific expressions in the article. [Image source=Yonhap News]

Office worker Jung Mo (29) also recently broke his regular savings to prepare funds for stock purchases. Jung said, "Since I started working, I saved my salary every month. But just saving meant low interest rates and low returns," adding, "I recently broke my savings account and moved the money to stocks." He added, "I'm satisfied with the higher returns compared to savings and deposits."

However, due to the overheating of the real estate and stock markets, young people's debt has also increased significantly. According to the Financial Stability Report released by the Bank of Korea in December last year, household loans for young people including those in their 20s and 30s increased by 8.5% as of the third quarter of 2020 compared to the same period last year, exceeding the increase rate of other age groups (6.5%).

Given this situation, some people in their 20s who are buried in debt are increasingly unable to manage their debts and are applying for relief.

According to data on 'Personal Rehabilitation Applications by Age Group' received by Justice Party lawmaker Jang Hye-young from the Supreme Court in October last year, as of June 2020, the number of personal rehabilitation applications by men in their 20s increased by 29.8% compared to the end of last year, and women in their 20s increased by 24.7%. The 20s were the only age group where both men and women increased by more than 20% across all age groups.

Experts analyze that the 'Debt Investment' craze is related to the uncertain future of young people.

Professor Kim Taegi of Dankook University's Department of Economics said, "Young people have no hope for the future. Currently, young people are suffering from employment difficulties and have almost no labor income. In this case, they need to find non-labor income to earn money," adding, "But since young people do not own houses, where else can they find this non-labor income? Ultimately, making money through stocks is the easiest way for young people."

He added, "Also, since bank interest rates are so low that returns cannot be expected, more young people are stepping into stocks."