[AldonSseulJob] Financial Planning for the New Year... How to Become a Wealthy Salaryman?

Editor's NoteUseful and money-saving miscellaneous encyclopedia. 'Aldonssuljab' will serve you only the truly 'money'-worth information among countless economic articles.

AP Yonhap News

Who comes to mind when you think of the richest person in the world?

Most readers would probably think of 'Warren Buffett.'

Warren Buffett was born in 1930 and turned 95 this year.

As of last year (November 2024), his net worth is about $146.9 billion, which is over 200 trillion KRW.

What’s even more surprising is that 95% of his wealth was accumulated after the age of 60.

This shows that his wealth was not built overnight,

but rather the result of consistent management and effort.

Experts often emphasize that 'many small savings make a great mountain' as the first step in asset management.

It means that even if your income is less than others, consistently saving and investing is more important than the amount of income.

Many people consider financial planning as a New Year's resolution.

Let's explore how salaried workers can also become wealthy.

Top 1% Wealth of Salaried Workers is 2.7 Billion KRW... Asset Management is Essential Especially for Salaried Workers

These days, Seoul apartment prices are around 1.5 billion KRW.

We often hear that you can never buy a house with just a salary.

However, there are more people than you think who have built assets worth billions by using their salary as seed money.

According to NH Investment & Securities' '100-Year Life Research Institute' examining the asset levels of top earning households,

as of 2023, the net asset cutoff for the top 10% of salaried worker households was about 1.05 billion KRW.

The top 1% had about 2.7 billion KRW, and the top 0.1% about 6.2 billion KRW.

Of course, self-employed individuals have accumulated much more wealth.

The top 10% of self-employed had 1.1 billion KRW, 1% had 4 billion KRW, and 0.1% had 10.2 billion KRW.

Did you think, "Ah, self-employed people make money, but salaried workers can't"?

The difference between salaried workers and self-employed is

that salaried workers have limited income-earning periods due to retirement, etc.,

while self-employed tend to have longer income-earning periods, which is advantageous for asset accumulation.

Therefore, I want to emphasize that asset management is essential especially for salaried workers who have relatively shorter working periods.

Even the net assets of the top 1% of workers, about 2.7 billion KRW,

according to the 4% rule, can provide about 100 million KRW annually without major worries throughout their lifetime.

'Real Estate'-Centered Portfolio is Risky?

Yonhap News

In fact, most wealthy Koreans have grown their assets through 'real estate.'

As introduced in Aldonssuljab last week,

according to KB Management Research Institute, more than 50% of wealthy Koreans' asset portfolios consist of real estate assets.

NH Investment & Securities' 100-Year Life Research Institute tells a similar story.

Looking at the asset composition of the top 10% salaried worker households,

financial assets account for 23.2%, and real assets such as real estate make up 76.8%.

Even for the top 1%, out of an average total asset of about 4.6 billion KRW (net assets 4.2 billion KRW), financial assets are 20.7%, and real assets 79.3%.

However, to maintain a wealthy life after retirement,

it is advised to have a portfolio centered on financial assets rather than real estate.

To generate the cash flow corresponding to the average desired retirement living expenses of the top 10% households (a couple, 4.83 million KRW per month), financial assets of at least 1.5 billion KRW are needed.

Over 50% of Top 10% Wealthy Respondents Say They Will Save or Invest Financially

With interest rates falling,

the popularity of savings and time deposits as investment options is declining.

Nevertheless, 54.4% of the top 10% wealthy respondents said they would save or invest financially.

Among preferred financial asset management methods, deposit preference was highest at 73.5%.

Stocks and funds were also at 23.1%.

Safety (60.9%) was the most important consideration when investing,

showing that wealthy people prioritize investments that do not lose money rather than aggressive investments.

Also, top 10% salaried worker households spend 44.6% of their disposable income on consumption and save 55.4%.

Ultimately, the path to becoming a wealthy salaried worker

depends on accumulating enough assets to generate property income.

In the end, the way to become wealthy is to save more than you spend.

Rather than reckless investments aiming for a windfall, the secret seems to be investing without losing money.

Were you disappointed that there was no special secret, just textbook advice?

On the contrary, I think this very ordinary secret is the way to become wealthy,

and it makes me feel like I can do it too.

As the saying goes, 'A journey of a thousand miles begins with a single step,'

why not start saving even a small amount?

I support your wise financial planning life.

Thank you to all readers who took the time to read today.

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