South Korean Wealthy Families' Assets Increased by 21.6% in One Year... 40% "Increased Stock Investment Amount"

Rich People Who Like 'Jusik'
40% Say "They Increased Their Jusik Investment Amount"
31% Say "They Plan to Increase It Further"

[Photo by Getty Images Bank]

[Asia Economy Reporter Park Sun-mi] The number of 'wealthy' individuals in Korea holding financial assets of 1 billion KRW or more reached 393,000, marking a 10.9% increase over the past year. Their financial assets grew by 21.6%, recording the highest growth rate ever, with 40% increasing their stock investment amounts this year and 31% planning to increase them further in the future.

According to the '2021 Korea Wealth Report' published by KB Financial on the 14th, as of the end of 2020, the number of wealthy individuals in Korea was 393,000, up 10.9% from the previous year, and their total financial assets amounted to 2,618 trillion KRW, a 21.6% increase. This is analyzed to be influenced by the recent boom in the stock market contributing to asset growth.

The asset portfolio of the wealthy consisted of real estate assets (59.0%) and financial assets (36.6%). By asset type, the highest proportion was owner-occupied housing at 29.1%, followed by liquid funds (12.6%), buildings and commercial properties (10.8%), and savings and deposits (8.1%).

The asset that wealthy individuals experienced the most profit from while managing financial assets was stocks (59.0%), and stocks were also the most preferred financial investment asset this year. Based on stocks, compared to the previous year, the amount invested in financial assets increased, while the investment amounts in real estate assets including owner-occupied housing and other assets were maintained.

Regarding stocks, the percentage of respondents who increased their investment amount rose from 28.3% in 2020 to 40.0% in 2021, an increase of 11.7 percentage points. Conversely, those who decreased their investment amount dropped from 13.5% in 2020 to 7.3% in 2021, a decrease of 6.2 percentage points. For funds, the percentage of respondents who increased their investment amount slightly rose from 11.8% in 2020 to 14.3% in 2021. This is analyzed as wealthy individuals having a positive outlook on the stock market.

The future direction of financial asset management among the wealthy showed relatively more plans to maintain investments compared to the previous year but increase stock investments. For stocks, 31.0% of respondents planned to increase their investment amount, and 12.8% planned to increase investments in savings and deposits, which was relatively higher than other financial products. Intentions to expand investments in funds (10.8%), investment and savings insurance (7.5%), bonds (4.8%), and REITs·ETFs (4.3%) were all below 10%, showing relatively low interest.

Wealthy individuals’ perception of cryptocurrency investment was quite negative. Only 3.3% of all wealthy respondents expressed an intention to invest in cryptocurrency in the future, 26.8% said they might invest depending on circumstances, and 70.0% said they would not invest. Cryptocurrency investment intentions by financial asset size were 4.0% for those with less than 3 billion KRW and 1.0% for those with 3 billion KRW or more, indicating generally very low interest.

Meanwhile, wealthy Koreans holding financial assets of 1 billion KRW or more considered the standard for being ‘well-off’ as total assets including all assets such as financial and real estate assets amounting to 10 billion KRW or more.

Financial assets of 500 million to 1 billion KRW are semi-wealthy... What are the differences from the wealthy?

This year’s report included an analysis of Korea’s ‘semi-wealthy’ for the first time. Individuals holding financial assets between 500 million and 1 billion KRW who are growing their assets to become wealthy were defined as ‘semi-wealthy’ and related content was included for the first time.

Semi-wealthy individuals cited primary business income (34%) as the main source of wealth contributing to their current wealth accumulation, followed by real estate investment (22%) and earned income (21%). In contrast, wealthy individuals answered business income (41.8%), real estate investment (21.3%), inheritance and gifts, financial investment (12.3%), and earned income (6.8%) in order, showing a difference where earned income accounted for 21% among the semi-wealthy but only 6.8% among the wealthy.

Semi-wealthy individuals ranked their main interests as real estate investment, economic trend information, and financial product investment in first, second, and third places. The wealthy showed similar trends, but compared to the wealthy, the semi-wealthy showed relatively higher interest in real estate investment and financial product investment, while the wealthy showed relatively higher interest in tax, retirement and old age, and legal fields. This is interpreted as reflecting the semi-wealthy’s needs to actively grow wealth through asset management suited to their situation, and the wealthy’s needs to maintain, manage, and transfer assets to the next generation.

The current asset portfolio of the semi-wealthy is roughly composed of real estate:financial:other assets in a 7:2:1 ratio, but they considered the ideal asset composition to be 5:4:1. This is quite similar to the asset portfolio composition of the wealthy, and based on this, the semi-wealthy are expected to adopt a strategy to increase the proportion of financial assets from their current real estate-heavy asset composition.

Hwang Won-kyung, head of KB Financial Management Research Institute, said, “The Korea Wealth Report closely analyzes the appearance and asset management methods of the wealthy, containing various information that customers and the public are curious about. Especially this year, we analyzed the semi-wealthy who are growing their assets to become wealthy, and we hope it will be used as a guideline that everyone aspiring to be wealthy can relate to and practice.”

Meanwhile, this report was prepared based on a survey conducted over six weeks from June 1, targeting 400 wealthy Koreans with financial assets of 1 billion KRW or more and 200 semi-wealthy individuals with financial assets between 500 million and 1 billion KRW, as well as one-on-one in-depth interviews with a separate panel.

This content was produced with the assistance of AI translation services.