The top one percent of Korea’s rich owned W2.92 billion in net assets last year, about W310 million more than a year earlier (US$1=W1,230). Those in the top 0.1 percent who are considered VVIP clients in banks, brokerages, airlines and department stores now have at least W7.7 billion in net assets.
NH Investment and Securities in a report said the threshold for the One Percent has risen by 12 percent over the past year, mainly due to quantitative easing amid the coronavirus pandemic, which boosted stock and real estate markets.
But who are these people? In a snapshot, they look rather old — the biggest proportion are in their 60s with 34.6 percent, while 25.3 percent are in their 50s and 21.4 percent in their 70s. Only a very small proportion are in their 30s and 40s.
Nine out of every 10 in that bracket live comfortably in their own house or apartment that measures at least 150 sq.m.
On average they have W5.1 billion in assets and hold W470 million in debt, resulting in an easy 9.2-percent debt-to-equity ratio. That compares to a painful 17.5-percent debt-to-equity ratio for the general public.
But a lot of their wealth is tied up in real estate. Only 17.8 percent of the total assets of the wealthiest Koreans are financial products, while the rest are physical assets, mostly real estate. Only 30.6 percent of their real estate holdings is the home they live in while the rest may be investment properties at home or abroad.
The rich spend around W4.79 million a month on living expenses, with W1.4 million accounting for sumptuous food, W670,000 for education and W560,000 on housing expenses. Those in their 30s to 50s spent more on education because their children are still at school or university with W1.61 million a month, and an about equal W1.62 million on food.
Some W7.5 million in surplus funds on average a month ensure that the One Percent sleep well. That amounts to around W90 million a year, more than four times over the national average and demonstrating the sheer spending and investment power of that class.
But state health insurance, pension payments and taxes are a headache even for the wealthiest because they cost them an average of W66 million a year, which is higher than their W57.5 million in living expenses.