How wealthy is 'wealthy' in Korea?

Wealthy Koreans with seed money of 820 million won ($630,000) by the age of 42 was determined as the minimum condition of "being wealthy" here, a report showed Sunday.

The 2022 Korean Wealth Report compiled by a think tank under KB Financial Group was based on a study conducted in June and July, including a face-to-face survey with 400 respondents with more than 1 billion won in financial assets.

It defined “wealthy” as having financial assets over 1 billion won.

There were a total of 424,000 "wealthy" Koreans as of 2021, up 31,000 from 393,000 in 2020. They were 0.82 percent of the total Korean population, 0.06 percentage point higher than the year before.

According to the report, the respondents said the minimum seed money for accumulating wealth was 820 million won on average and they saved up their seed money at the average age of 42.

They answered that they gathered their seed money through real estate investment, stock investment and savings.

Business income accounted for an average 37.5 percent of their assets, while the rest was made up of real estate investment, inheritance, earned income and financial investment.

By region, 45.1 percent, or 191,000 people, were living in Seoul, followed by Gyeonggi Province and Busan with 94,000 and 29,000, respectively.

Of the group, 44.8 percent of the wealthy said they considered themselves to be wealthy.

However, only 21.6 percent of those with more than 5 billion won in total assets said they were "wealthy," while 23.8 percent of those with more than 10 billion won of total assets even said they were not wealthy.

Twenty-seven percent of respondents said one needs to have total assets of more than 10 billion won to be wealthy, while 17.5 percent suggested 5 billion won to be the standard.

The wealthy said that setting a financial goal is the best way of having the motivation for accumulating wealth. Other methods included using debt and asset allocation.

The report also looked into the wealth of the relatively young, categorizing respondents aged between 30 and 49 with financial assets over 1 billion won and under 2 billion won as the “newly rich,” differentiating them from the “conventional rich” referring to those in their 50s or above with more than 2 billion won in financial assets.

As of 2021, there were some 78,000 such newly wealthy Koreans, 18.4 percent of the total population of wealthy Koreans with more than 1 billion won.

When asked how they accumulated their wealth, 33.2 percent answered they earned money from business income, 26.4 percent said real estate investment and 20.7 percent said inheritance.

The newly wealthy answered there needs to be at least 700 million won worth of seed money to accumulate wealth.

Their total assets consisted of 67.4 percent real estate assets and 29.5 percent financial assets on average.

Three out of four newly wealthy were not content with their current situation. While 66.2 percent of traditionally wealthy said they consider themselves rich, only 26.4 percent of the newly wealthy said they were rich.