The Era of High Fixed Interest Rates... The 'Colorful' Investment Landscape of 2030

[Asia Economy Reporter Eunju Lee] Amid unprecedented continuous interest rate hikes, the ‘2030’ generation, who are highly interested in financial investment, now consider high interest rates as a given and contemplate investment methods accordingly. It is noticeable that they are exploring various niche investment methods to maximize the benefits of a high-interest-rate environment and turn ‘small money’ into larger sums. They are seen utilizing classic financial strategies like ‘windmill saving rotation’ or turning their attention to art investment, which can be done with small amounts.

On the 25th, the Bank of Korea’s Monetary Policy Committee (MPC) held a monetary policy meeting and raised the base interest rate by 0.25 percentage points (p) from 2.25% to 2.5% per annum.

Among the 2030 generation interested in financial investment, it seems difficult to find a sense of ‘surprise’ over yet another interest rate hike. Rather, they accept the ‘interest rate hike’ as a given and share various financial tips to turn small money into large sums, assuming that interest rates may continue to rise. On financial investment cafes and blogs, methods such as ‘installment savings windmill rotation’ to build a lump sum through small installment savings during a period of rising interest rates are gaining renewed attention.

Installment savings windmill rotation is a financial strategy that rotates lump sums by subscribing to new installment savings accounts every month. For example, assuming a 6-month installment savings account with a monthly deposit of 300,000 KRW, one would subscribe to a new small installment savings account each month to increase the total deposit amount. From the 7th month, when the first installment savings matures, lump sums can be collected sequentially. On financial investment cafes, basic information about this installment savings windmill rotation as well as reviews are shared. Recently, as competition among banks for installment savings interest rates has heated up, there is also active sharing of information on short-term, high-interest installment savings products suitable for new monthly subscriptions.

Some also use ‘reselling’?buying scarce products and reselling them for profit?as a supplementary financial investment method. This is not limited to luxury goods or sneaker brands. Recently, the scope of ‘resell’ investment has expanded considerably to include seasonal products from major fashion brands, bags and accessories, and even hair dryers.

A 30-year-old office worker, Mr. A, recently made a decent profit through a popular bag from a fashion brand that repeatedly sold out. He said, “Sneakers are well-known, but actually, whether it’s designer brands or major fashion brands, those products are quite profitable,” adding, “Popular items sell out quickly, so I secure them in advance and make small margins through secondhand platforms.” Recently, not only fashion but also certain brand hair dryer sets have emerged as key items for ‘resell’.

There is also a growing trend of challenging investments less affected by interest rate fluctuations, such as art. This is so-called Arttech (Art + Financial Investment). Especially recently, arttech platforms have emerged that allow ‘joint purchase’ of artworks to share ownership, and if the value of the artwork rises, owners can sell their shares accordingly, attracting attention. Mr. B, a 32-year-old office worker, said, “Most of my assets are liquidated and put into installment savings, and I found this method while looking for ways to utilize my remaining small assets,” adding, “Since it is difficult to purchase expensive art pieces alone, I think this is a good approach.”

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