[Leverage's Counterattack] 2030 Pushed to the Edge... 'Yeongkkeul Debt Investment' Brings 'Empty Account'

[Asia Economy Reporters Lee Seon-ae and Kim Hye-min] YOLO → Debt Investment → Empty Account. In recent years, the 2030 generation has focused on YOLO (You Only Live Once) consumption for happiness, and after COVID-19, they plunged into Yeongkkeul (pulling together all their resources) and Debt Investment (borrowing money to invest). Now, the 2030 generation is caught in the nightmare of "empty accounts" (accounts where stock prices fall below the loan amount, causing the collateral maintenance ratio to drop below 100%) due to the sharp decline in stocks and cryptocurrencies. The side effects of aggressive debt investment during the stock market frenzy have met the variable of a market crash, manifesting as an unimaginable fear of leverage (an investment strategy that borrows capital, or debt, to increase returns). The 2030 generation, who have led price increases through panic buying not only in stocks and cryptocurrencies but also in real estate, are being driven to the path of credit delinquency as they fail to manage excessive debt during the interest rate hike period.

According to the financial investment industry on the 23rd, 54% of the 7.23 million new accounts opened last year at the five major securities firms belonged to the 2030 generation. The Korea Capital Market Institute also reported that since COVID-19, the 2030 generation accounts for more than half (53.4%) of new stock investors. This proves that the 2030 generation, with relatively fewer assets, has continuously participated aggressively in the stock market through Yeongkkeul and debt investment after experiencing panic and recovery in March 2020.

The cryptocurrency market is also dominated by young people. As of last year, an average of 60% of users at the four major exchanges (Upbit, Bithumb, Coinone, and Korbit) were from the 2030 generation.

Participation of the 20s and 30s generation in the real estate market is also notable. According to the Korea Real Estate Board, the nationwide apartment purchase share of the 2030 generation last year was 31% on average. This surpassed 30% for the first time, following 28.3% in 2019 and 29.2% in 2020 when related surveys began. Especially in the metropolitan area, the apartment purchase share of the 20s and 30s generation was high. In Seoul, it was 41.7%, significantly exceeding 31.8% in 2019 and 37.3% in 2020.

The problem is that these investments originated from Yeongkkeul debt investment. According to the Bank of Korea’s "Financial Stability Report (December 2021)" published at the end of last year, household debt balance has already reached 1,850 trillion won, with the proportion of borrowers exceeding the critical level at 6.3% of all borrowers. Among them, the proportion of 2030 generation young borrowers exceeding the critical level is about 11.3%. The Bank of Korea cited increases in mortgage loans for home ownership and credit loans for investment purposes as factors behind the rise in youth debt. The Korea Institute of Finance warned, "In a phase of asset price decline, the shock of interest rate hikes is greater, so the worst-case scenario must be considered." There is a growing alarm that young people will ultimately be driven to credit delinquency as they fail to manage the debt bomb.

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