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The wealth standard for being categorized as rich in Korea has nearly doubled during the past decade, from 11.4 billion won ($8.7 million) in 2012 to 18.7 billion won in 2021, while the proportion of the inherited wealthy stayed unchanged at around 60 percent over the decade. Furthermore, increasingly more people think that the minimum wealth threshold to be considered rich is 30 billion won.
This is according to the latest book authored by Hana Institute of Finance, an affiliate of Hana Bank, released Tuesday. The book is a compilation of its annual wealth reports spanning the past 10 years that have been published since 2012.
Book cover image of "Korean Wealth Report" authored by Hana Insitute of Finance / Courtesy of Hana Financial Group
Titled "Korean Wealth Report," the book tells that more than half of the total assets held by the rich are in the form of real estate. This is exceedingly higher than wealthy people globally, who on average hold 15 percent of their assets in real estate. Around 95 percent of the wealthy in Korea own their homes, while more than half of them possess additional real estate.
Considering the country's roughly 40 percent increase in the overall real estate price over the past decade, real estate has proven to be the most suitable investment for maintaining their assets stably.
Three out of 10 rich people have achieved over 10 percent in returns during the COVID-19 pandemic, which is nearly 2.4 times the proportion among the general population. Wealthy individuals secured liquidity during the early stages of the pandemic era and expanded stock investments, taking full advantage of the bull market during the period. As the pandemic era prolonged, they swiftly shifted their portfolios, increasing portions of savings, bonds and dollars.
Korea's rich are also shown to be putting more emphasis on preserving principal, rather than seeking higher returns. They are also very sensitive to external economic variables, such as government tax policies as well as domestic and international investment environments.
Among the so-called "young rich," who are under the age of 40, their proportion of financial assets was higher than that of real estate. More than seven out of 10 young rich individuals turn out to be investing in overseas stocks, and 20 percent hold cryptocurrency assets.
"Super-rich" people, those who hold financial assets of over 100 billion won or total assets exceeding 300 billion won, showed a preference for foreign currencies as well as keen interest in art investments. They said that they naturally learned the value of money while growing up within their families.
"Wealthy individuals have tendencies of valuing small amounts of money and rigorously managing their lifestyles. Such principles in life are considered a key reason of their wealth," the book stated. "Although not everyone can become wealthy, the book hopes to be a source of understanding rich people and some small tips."