The Real Reason Why the 2030 Generation is Entering the Stock Market

Inflation is soaring, salaries have been frozen for years or are barely increasing, and the prospect of owning a home feels distant – this is the reality for our 2030 generation. Everyone knows that the era when working hard and saving, like our parents’ generation, could make you rich is long gone. In this situation, the stock market might seem like a last hope. We’re easily swayed by stories of colleagues making money in stocks, and social media is full of success stories, leading to intense FOMO (Fear Of Missing Out) – ‘Is everyone getting rich but me?’ This complex psychology pushes us into the stock market.

• Absolute Necessity for Asset Growth: There’s a strong perception that traditional asset growth methods like real estate and savings can’t keep up with inflation.
• Improved Information Accessibility: With an abundance of stock-related information on YouTube and communities, the barrier to entry feels lower.
• Fear of ‘Becoming a Flash Pauper’: Seeing others’ assets grow creates a sense of relative deprivation and a growing anxiety about being left behind.
• Easy Accessibility: Investing is possible with just a few taps on a smartphone app, making it not difficult at all to start stock investing.

Day Trading, All-in Investing… The 2030 Generation’s Risky Bets

Honestly, everyone wants to get rich quickly, right? Perhaps that’s why high-risk investments like day trading or so-called ‘all-in investing’ are trending among the 2030 generation. They take on excessive risks due to the desire to make large profits in a short period. Especially young professionals with little stock investment experience easily fall into these temptations, often leading to significant losses in an instant. Of course, with luck, you might hit the jackpot, but that applies to a very small minority. Most experience bitter failure and leave the stock market. Chasing a ‘one-shot’ gain is closer to speculation than investment.

• ‘One-Shot’ Mentality: Many expect high returns in a short period and concentrate their investments in leverage or theme stocks.
• Blind Trust in Information: There’s a tendency to rely on unverified social media or community information, leading to herd mentality trading.
• Loss Recovery Psychology: When experiencing losses, the thought of ‘just getting my money back’ often leads to more reckless investments, resulting in even greater losses.
• Lack of Investment Principles: Many invest simply by following trends without their own investment philosophy or principles.

A Realistic Perspective for Becoming Truly Rich

So, is there no hope for 2030 stock investment? No, absolutely not. However, we need to shift our perspective on how to become ‘truly rich’ to be more realistic. Stock investment should be viewed as a marathon, not a sprint. You need to consistently study, establish your own principles, and approach it with a long-term perspective. It’s also important to cultivate the mental fortitude to overcome market volatility without being impatient. Investment masters like Warren Buffett didn’t get rich overnight. Consistency and patience are ultimately the keys to successful investing.

• Maintain a Long-Term Perspective: It’s important to focus on the intrinsic value of companies and invest for the long term, rather than being swayed by short-term market fluctuations.
• Diversified Investment: As the adage goes, ‘don’t put all your eggs in one basket.’ Diversify your investments across various assets to reduce risk.
• Continuous Learning and Analysis: Continuously acquire knowledge necessary for investing, such as economic conditions and company analysis, and establish your own investment criteria.
• Don’t Be Swayed by Emotions: It’s necessary to train yourself to make investment decisions based on rational judgment, without being swept away by market fear or greed.

The 2030 stock market can certainly be an opportunity for us. However, making reckless investments driven by vague fantasies or impatience is truly dangerous. If you invest wisely with consistency and principles, you will surely achieve satisfactory results. I hope we all become successful investors.

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Why are people choosing early National Pension withdrawal, even if it means ‘losing money’?

There’s a reason why the number of early withdrawal recipients has increased to such an insane degree. The biggest reason is the ‘income cliff’ problem. The retirement age is getting earlier, but the age to receive the National Pension keeps getting pushed back. For example, people born in 1961 originally expected to receive it from age 62, but in 2023, it was suddenly delayed by another year to age 63. This creates a period of several years with absolutely no income between retirement and receiving the pension, right? This is called the ‘income crevasse,’ and people don’t have the money to get through this gap. With no immediate living expenses, they are forced to apply for early withdrawal, even if it means receiving less. It’s a truly heartbreaking situation.
The burden of health insurance premiums also plays a role. Do you know that from September 2022, the income standard for recognizing health insurance dependents was drastically reduced from 34 million won per year to 20 million won per year? If your monthly pension amount exceeds a certain level, you lose your dependent status under your children and are converted to a regional subscriber, meaning you have to pay health insurance premiums directly. So, many people are now choosing to receive a little less pension to maintain their dependent status. This news completely blew my mind.

Early National Pension Withdrawal: It Can’t Be All Advantages, Can It?

Honestly, getting immediate cash is certainly an advantage of early withdrawal. It can feel like a ray of light when you’re truly desperate after your income stops in retirement. But that’s not the end of it. The biggest disadvantage of early National Pension withdrawal is the ‘lifetime reduction.’ For every year you receive it early, your pension amount decreases by 6% annually, and if you receive it up to 5 years early, you only get 70% of the original amount. For example, if you were originally supposed to receive 1 million won per month but receive it 5 years earlier, you’ll only receive 700,000 won per month for life. Considering inflation, the perceived reduction will be even greater.
While it might provide short-term relief, in the long run, your retirement income stability will be completely shattered. In an era where life expectancy is increasing, this can be even more devastating. The structure is such that the later you receive it, the greater the total amount you receive, so giving that up is a decision that requires extreme caution. When you see things like this, it feels hopeless, but isn’t the reality of struggling to make ends meet right now even sadder?

The Income Cliff: How to Survive It? Realistic Retirement Preparation Tips

So, how do we overcome this income cliff? Honestly, there’s no single answer, but I’ve looked into a few methods for a better life.

• Utilize deferred pension: If you have some immediate income and are healthy, delaying the start of your pension with ‘deferred pension’ is a good option. Since the pension amount increases by 7.2% for every year you delay, it can be much more advantageous later on.
• Create a second ‘salary’ account: It’s necessary to actively utilize retirement pensions and private pensions to create a steady cash flow even after retirement. Investing in dividend stocks or rental income can also be considered.
• Optimize health insurance premiums: When considering early withdrawal, you must also consider whether to maintain your health insurance dependent status. It’s important to carefully calculate your pension income and other income to prevent the unfortunate situation of being converted to a regional subscriber.
• Re-employment or multiple jobs: Continuing income-generating activities after retirement might be the most realistic answer. Efforts to fill the income gap through re-employment or multiple jobs in areas of interest are necessary.

These might seem like common knowledge, but they are truly facts. Isn’t it those who prepare in advance who live a good life?

The Conclusion: I’ll Protect My Own Retirement!

The news of over 1 million early National Pension withdrawal recipients is a legendary event that clearly shows the unstable reality of retirement in our society. While the pension system is important, it makes us realize once again that we ultimately have to take responsibility for our own retirement. Let’s all persevere through our current lives with a ‘hold on’ mentality and fight for a good retirement! I hope everyone prepares diligently to create a retirement without regrets.

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