[People Met Through Books] To Live the Life You Want, Start 'Money Study' as Soon as Possible

'My Daughter, Never Postpone Learning About Money' Author Analyst Park So-yeon

Money study means understanding the capitalist mechanism
Focus on 'investment' to grow money well
Success in main job is much more important for financial planning
Avoid challenges and risks you cannot handle
Reality shows severe wealth imbalance... coexistence is important

"No matter what kind of life you live, the amount of money you have protects you to that extent. So start learning about money as soon as possible."

This is life advice from Park So-yeon, a 22-year veteran analyst, to her daughter. While some people limit their knowledge about money with the notion that 'studying money = greed,' she explains that money is a very important factor in shaping one's own life. Therefore, her argument is that one should start proper money education early.

Having spent decades in the securities industry, witnessing the rise and fall of all kinds of wealthy people?from sudden millionaires to self-made rich and asset management types?she explains that while money is not a prerequisite for happiness, often without money it becomes difficult even to claim the right to be happy. Having lost her mother early and having almost self-taught money management and life skills as an adult, she now, at the age her mother was, gives advice to her daughter: "You need to seriously think about how much money you need to live the life you want, how you can save that money, and how to spend it wisely."

On the 22nd, we asked analyst Park So-yeon about 'studying money.'

Analyst So-yeon Park

- It is not easy to find education about money in Korea’s public education system. Money study can be unfamiliar; what exactly is money study?

▲ I think it means learning the 'mechanism of capitalism.' It can be broadly summarized into two processes: generating 'income' and then 'investing' the money left after consumption. In my recent book, I focused on investment, which is a way to grow money well. Just as to do well on exams you need to understand the test maker’s intent, investment also has 'rules.' Understanding the mechanism by which capitalist society operates is essentially what money study is.

- Korean parents often tell their children, 'Don’t worry about money, just study.' It seems they think this is a form of care.

▲ In Korea, there seems to be a perception that if children learn about money early, they will neglect their studies. As a result, until they become adults and start earning money, they only think of economic activity as 'consumption.' It’s just about how to spend allowance well. However, advanced countries emphasize financial education. For example, Jewish people let children experience investing with congratulatory money received at their coming-of-age ceremony. I hope Korea becomes more open about money and economic issues. I was ignorant too, so I had many trial-and-error experiences. Recently, I attended the Berkshire Hathaway shareholders meeting, and out of 60 questions, 2 or 3 were given to children. I envied the practice of providing opportunities to study money and financial markets from a young age.

- When people think of money study, they often think of financial technology like stocks or real estate.

▲ There are many financial technology books that tell you which stocks are good or which apartment areas are promising. Acquiring such information can be considered money study, but what you need to know first are the definite rules that exist within the market. Those are also a kind of mechanism. It’s best to fully understand those rules before jumping in. Even for me, who looks at the market daily, it’s not easy, but in this book, I focused on those rules.

- Is there an appropriate time for financial technology? Can focusing on proving one’s value also be part of financial technology?

▲ To do financial technology, you need seed money, and the foundation of that is your salary. The steady cash flow needed to steadily grow money also comes from your salary. Therefore, in your 20s and 30s, it is much more important to succeed in your main job than to have an eye for selecting good stocks or apartments. When you are young, it is more important not to lose money than to earn it, so it’s not too late to start financial technology after you have sufficiently developed your abilities. When you succeed in your main job, your perspective broadens. The more you know, the more your eye for related stocks and investment value changes. So, in the early stages of working life, it is important to focus on your current work rather than work-life balance.

- You emphasized the value of earning regular monthly income over making a large sum at once.

▲ Although financial technology skills are truly demonstrated when a large sum comes in, if you lack the ability to maintain it, even earning a large sum can be wasted. So making a large sum at once doesn’t seem very important. Rather, earning a certain level of money regularly is more difficult and challenging. Whether it’s salary, business income, or interest income, having a cash flow of 2 million won every month is a great thing. Above all, having fixed income stabilizes life and mind, enabling normal and wise thinking. I have seen many cases where people under financial pressure fail to make normal judgments.

- You recommended your daughter to choose the latter: work that is not profitable but interesting, over work that is profitable but uninteresting.

▲ Life and industries have cycles. It’s hard for one industry to remain prosperous for 30 to 40 years continuously. Good and bad times repeat. So if you do what you like even when it’s not good now, a good cycle will inevitably come, and you will enjoy it. However, I have seen many cases where people blindly followed work that was good now but didn’t suit their aptitude or talent, and suffered when the cycle turned. I want to advise my daughter and young people to stick to what they like and endure steadfastly.

- The statement 'Don’t choose options that keep you awake at night' is interesting. It might be interpreted as avoiding risks or challenges.

▲ Staying awake at night means overexerting yourself, which usually stems from the desire to make money quickly and become rich. You risk overextending yourself beyond what you can handle, which can undermine your life’s foundation. You need a stable present to promise a future, and a solid foundation to build a house. It seems important to prepare for the future while controlling uncertainty and moving forward step by step.

- You said wealthy people invest only in asymmetrical products with almost no risk and overwhelmingly high returns. This is obvious, but it seems one needs the ability to recognize this.

▲ The ability to recognize is important, but since this is not easy, the attitude of 'first doubting what everyone says is good' is important. If you practice critical thinking by doubting even what everyone agrees on, you begin to see what most people overlook. Of course, studying is important too. But you don’t need to meet many people to study. 'Depth' can be gained through 'work.' To doubt, you need deep knowledge, and the fastest way to get that is to dive into the work. That’s why I said salary and work are surprisingly important.

- Surprisingly, wealthy people don’t follow the investment adage 'Don’t put all your eggs in one basket.'

▲ I want to emphasize that wealthy people do not do unconditional diversification. 'Don’t put all your eggs in one basket' does not mean you can invest in places you don’t know well. The problem is thinking that diversification reduces risk. You should invest where you know well so that if something goes wrong, you can quickly withdraw your investment. If you invest in areas you don’t know well, it’s hard to get out. In fact, wealthy people I have met often invest only after carefully considering and being confident that they know as much as experts.

- Through the family motto of Mr. Choi Jinsa’s household, 'Don’t accumulate more than 10,000 seok of rice,' you emphasized 'moderate wealth.' This stresses 'coexistence' rather than monopolizing wealth. How would this apply in today’s era?

▲ I read somewhere that one seok of rice is about 144 kg. Currently, rice prices are about 50,000 won per 20 kg, so one seok is about 400,000 won, and 10,000 seok would be about 4 billion won. If we modernize the saying 'Don’t harvest more than 10,000 seok of rice,' it might mean 'Don’t earn more than 4 billion won annually.' In countries like the U.S. with over 100 years of statistics, you can see graphs showing the top 1% income share of total income. The U.S. top 1% takes about 25% of total income, the highest level since World War II. Although Korea is not at that level, wealth inequality has worsened. The story of Mr. Choi Jinsa’s household about not harvesting more than 10,000 seok seems applicable.

- What realistic advice would you give to avoid giving up after just a few days when trying to practice the book’s content?

▲ Once you have a 'truly painful' experience because of money, you naturally become sensitive to money issues and financial technology. No matter how many times people around you say it’s important, it’s useless. I was the same, and I embarrassingly shared my episodes. I hope my failures provide indirect experience to help you decide sooner. The important thing is daily change. Eating with a new person once a week, going to an unfamiliar neighborhood for coffee, or having a new hobby?these changes break the fixed routine. Accumulating such attempts will help you escape the same routine and make life more interesting.

- How did your daughter react to reading the book?

▲ She is a first-year high school student in the middle of puberty and isn’t very interested in my book yet. (laughs) Even when my husband showed it to her saying, 'Mom wrote this for you,' her reaction was lukewarm. But since it contains things I really want to tell her, I think it will help someday. However, looking back, it’s very INTP (MBTI) style. My daughter is F (feeling type), so she might have needed more emotional content rather than logical advice like this.

About author Park So-yeon

Park So-yeon is a 22-year veteran analyst. She graduated from Seoul National University with a degree in Oriental History and completed graduate studies in Economics at Seoul National University. Since joining Daishin Securities in 2002 and passing through Korea Investment & Securities, she currently handles investment strategy at Shin Young Securities Research Center. She appears as a panelist on MBC, KBS, SBS radio, and Sampro TV, discussing stock market trends and outlooks.