By It looks like Koreans are living the American Dream and they didn’t even have to immigrate to the US to experience it:
The number of indebted people is increasing across all age groups in Korea, from young couples struggling to start their own family and people with mortgages to middle-aged parents burdened with exorbitant education costs for their children and even elderly people with little money for their later life. The most worrying aspect is that thousands of middle-aged people in the prime of their professional careers are struggling under mountains of debt.
According to the Hyundai Research Institute, 1.08 million out of 10.8 million households in Korea or 10.1 percent are classified as being “house poor.” The institute classifies an individual as house poor if more than 10 percent of his or her disposable income goes into meeting principal payments on their mortgage.
The average disposable income among the house poor stands at W2.46 million (US$1=W1,125) a month, and W1.02 million of that goes into repaying the principal on mortgages. Some 20 percent of Koreans in their 30s fall into the house poor category, and 14 percent of those in their 40s. The HRI said 90,000 out of the 1.08 million households are unable to repay their mortgage.
Many young couples have taken out loans to pay for their weddings and cover their jeonse or Korean-style lease deposits. According to a survey by the Ministry of Gender Equality and Family on 4,754 people, marriage expenses amount to W80 million on average for men and around W30 million for women.
Statistics Korea puts the median assets of Korean couples under 30 at W41.46 million as of 2011. That means young couples are taking out loans twice the size of their assets in the early stage of their married lives. It is nearly impossible to get married these days without getting into debt unless parents pitch in.
According to the Korea Institute for Health and Social Affairs, raising a child costs a total of W262 million. It costs W880,000 a month to raise an elementary schoolchild, W980,000 a child in middle school, W1.15 million a child in high school and W1.42 million a child in college. Increased spending on tuition fees and private crammers translates into less money saved. [Chosun Ilbo]
You can read the rest at the link, but basically like Americans, Koreans have too much invested in their homes, spend too much, and are not saving enough for retirement. The amount of money Koreans are spending on education per child though illustrates why an issue like tuition in Korea is always a hot button topic.
6:37 am on February 18th, 2012 1
With South Korean expats living in the USA, it seems to be exact opposite.
8:15 am on February 18th, 2012 2
Hey! I’m American and I don’t spend like crazy. I actually want to retire with plenty of saved cash.
8:30 am on February 18th, 2012 3
“marriage expenses amount to W80 million on average for men and around W30 million for women.”
That’s just #$%@ing stupid.
My wife and I got married at the cheapest wedding hall we could find (I think it only cost 1.2 million won for the wedding and the banquet), kept the Daewoo Tico she had when she was a student instead of buying a new car right away, and lived in a tiny house that cost 200 000 won per month to rent. After two years, we had saved enough for a down payment on an apartment (an apartment which we’ve since flipped for a nice profit).
8:41 am on February 18th, 2012 4
#2,
Good for you.
I’m not 40 yet and I could retire tomorrow because my wife and I invested very wisely. It took 10 years, but we did it. It’s an amazing feeling knowing we could still manage even if we both lost our jobs.
…and every dime we earn from now on is just gravy.
10:10 am on February 18th, 2012 5
“…and every dime we earn from now on is just gravy.”
Yep…
…like I always say…
…a penny saved is a early bird that gathers no moss.
8:55 pm on February 18th, 2012 6
#5,
“a penny saved is a early bird that gathers no moss”
A quote from the 2012 edition of Chickenhead’s Almanack?
9:35 pm on February 18th, 2012 7
It is from the 2011 edition. The 2012 edition gives this poignant advice:
An apple a day is a watched pot that flocks together.
But the real question is how you earn so many dimes.
You wouldn’t happen to be the Gumball King of Itaewon, would you?
9:42 pm on February 18th, 2012 8
Most of these folks are driving new cars, wearing the latest fashions, yada yada. Not hard to understand why they are broke. This whole notion of “face” and the facade that most of the younger Koreans feel compelled to put up and their over the top consumption behavior will certainly screw them all in the near term.
8:58 am on February 19th, 2012 9
#8,
I drive new cars, wear the latest fashions, etc…But I’m not some 20-something kid who earns 1.5 million won per month.
9:01 am on February 19th, 2012 10
#7,
Are you the one who wrote, “A penny saved is one less penny for the man”?
2:15 pm on February 19th, 2012 11
Chickenhead? Didn’t you once say “A gallon of beer saves an ounce of sweat.”
5:56 pm on February 19th, 2012 12
#11,
I think he also said, “A bar is no fun unless it contains food, booze, and pussy.”
5:59 pm on February 19th, 2012 13
I think he also said, “A bar isn’t a bar unless it has food, booze, and women.”
6:29 pm on February 19th, 2012 14
Korea’s debt to GDP ratio is 23%, compared to Japan’s 200% debt to GDP ratio, the highest in the world, even more than Zimbabwe.
6:29 pm on February 19th, 2012 15
I think Chickenhead also said “A stitch in time saves a six pack.” Teadrinker #12, I think that saying in just plain common sense.
7:37 pm on February 19th, 2012 16
I’ve notice a tendency among Korean immigrants to fall within the “penny-wise and pound foolish” category. They’ll be very frugal at the grocery store, by clothes from discount stores, fore-go medical checkups, etc. But then they’ll go hog wild and waste their savings on something like casino trips or luxury vehicles.
7:55 pm on February 19th, 2012 17
My Daddy always told me, “Son. The only thing better than a girl with a little meat on her bones…..is a girl with a little meat on her bones…ON MY BONE!”
8:33 pm on February 19th, 2012 18
Here is an original ChickenHead quote:
“Pusssy is for eating, not for being.”
9:31 pm on February 19th, 2012 19
How about this one, “Hell hath no fury like a p@ssy with the clap.”
9:36 pm on February 19th, 2012 20
I’m convinced this one is a Chickenhead original, “If it quacks like a duck and smells like a pig, it’s an English teacher”.
7:36 am on February 20th, 2012 21
#13… yet, for some reason, our (US) government is purposely taking the path that Japan took in the 80′s/90′s which has led to them experiencing 30 plus years of stagnation.
7:38 am on February 20th, 2012 22
Minor point: Japan’s bubble burst in the early 1990s – so that would be 20 years, as opposed to 30 years. In the 1980s, Japan’s economy was on fire.