41–50 of 129 posts
Earlier quoted context omitted.
I wish we had a word for this, where everyone’s getting rich, there’s a run on stocks, but prices of assets are all going up. Some people are missing out completely whereas a select few hoard wealth in other forms. And of course the government starting to notice and trying to intervene.
Irrational Exuberance
Realistically, it's nearly impossible for high income young people in their 20s and 30s to buy a house in Seoul. That forces them to move to the provinces, but then there's almost no infrastructure. No companies either.
So many people turn to leverage in hopes of a life changing reversal.
The recent rise in the KOSPI index happened because some of the loopholes that Korean conglomerates used to make inheritance easier were blocked by revisions to the Commercial Act. One of the uncertainties that had been called 'Korean risk' was removed, and the market went up.
For a Korean man, the moment you leave Seoul, not just the outskirts, but out of Seoul entirely, there's no one to talk to about IT jobs. I live outside Seoul, and the infrastructure gap is about 10 to 20 years behind. On top of that, there are no IT companies, just mostly low income manual labor jobs.
The median monthly income for Korean men is about 3 million KRW, while the average Seoul apartment price is 1.3 billion KRW and the median price is 997 million KRW. That means you'd need to work for about 25~30 years just to buy a home, but job tenure is getting shorter, so that's not realistic.
So people gamble on leverage, hoping for a life changing win. Everyone around me knows it's gambling, but they figure they're already in a dead end situation anyway, so they have nothing to lose.
I live and work in IT outside Seoul, but the IT business has already matured, and there are many well established companies. The Korean market itself is small, so early movers have already taken the lead. There's no room for latecomers like me. That's why I take on work from the West, China, and Japan regardless, but even that's hard without a reputation.
The moment you leave Seoul, a Korean's chances of success drop to nearly zero. That's why people cling to the city so desperately.
And honestly, I've hardly gambled on my life. But I'm drowning in debt, and sometimes I feel like a fool for working so hard.
The story we were telling young people that if they apply themselves, go to school and get a job they'll be able to afford family, house, vacations is moving further and further away for more and more people. The turn towards financial nihilism will continue.
Laboring in a capitalist economy is a loser's strategy because your capital is you body's ability to produce value and that has a maximum physical limit. Why participate in an economy using a strategy that has a natural upper bound? It makes no sense. You're not even playing the game poorly - you're not playing the game at all.
For those who don't know what's going on in Korea, KOSPI is up 3x in the last year and a large amount of HBM employees have made huge amounts of bonus pay. This has led to an insane FOMO frenzy in a society that's already very competitive. Add to that, stock gains in Korea are often used to finance housing purchases (or real estate investment) so many retail investors are scared of being "locked out" of housing (whic…
"Smart men go broke three ways: liquor, ladies, and leverage." -- Charlie Munger (Which is not to imply that these are smart men).
"Smart men go broke three ways: liquor, ladies, and leverage." -- Charlie Munger (Which is not to imply that these are smart men).
Some time ago it occurred to me that you can't just spend extreme amounts of money. You can only lose it by gambling. In a casino, on investment or on business, it doesn't matter.
In Germany the consensus is MSCI World or FTSE All-World ETFs.
I believe in the US most advice goes to VTSAX (US Total Market), VOO (S&P500) and maybe QQQ (NASDAQ100) which means only US stocks.
What gets recommended in other countries?
Earlier quoted context omitted.
With housing their being so cheap, what the hell is the problem anyway? It's impossible to have expensive real estate in a country that's dying out fast.
>It's impossible to have expensive real estate no it's very possible because in an aging country people relocate to a handful of cities. 50% of South Korea's population now lives in the Seoul metropolitan area. The real estate that's getting cheaper is the one decaying in the countryside. It's like saying Russia can't have expensive real estate because the country is big, what matters is where people are actually mov…
And for many, if the property is not within 10km of the Sydney or Melbourne city centre, it might as well be in the dusty Outback desert.