“A monthly salary of 2.5 million won, but a 50 million won loan?” ... Expert rebukes 26-year-old civil servant

[Financial News]  A civil servant who had built up net assets of 130 million won by age 26 took out a 50 million won personal loan and invested in stocks, prompting a personal finance expert to warn of the risks. The expert said there was no reason for a fourth-year civil servant earning 2.5 million won a month to borrow money to increase their stock investments.
Recently, on the YouTube channel “Pilssaem TV – Kim Kyung-pil’s Money Training,” Kim Kyung-pil, head of Money Training Lab, analyzed the financial situation of a 26-year-old national civil servant. The civil servant, who works in South Gyeongsang Province, was in their fourth year since being appointed and was weighing stock investments against real estate investments.
The civil servant had been saving money since college and military service, and continued to save more than half of their monthly salary after starting work. They invested those savings directly in overseas stocks and in index-tracking products such as the U.S. S&P 500 and Nasdaq, increasing their net assets to 130 million won.
Recently, the civil servant’s concerns grew after senior colleagues advised them, saying, “If you’ve saved this much, you should at least make a gap investment and get an apartment registered in your name.” Unsure whether to continue investing in stocks or move the money into real estate, the civil servant sought expert advice.
Kim viewed the civil servant’s having built up net assets of more than 100 million won at a young age positively. He encouraged them, saying, “That’s truly impressive and deserves praise,” but also expressed concern about investing with borrowed money.
In particular, he identified what is known as “debt-financed investing”—borrowing money to invest, using a personal loan—as the biggest problem.
Kim stressed that even if interest rates are relatively low, the burden of repaying the principal does not go away. He said, “Civil servants’ personal loan rates may be relatively low, in the 4% range, but it is unmistakably debt,” adding, “There is absolutely no reason for a fourth-year civil servant earning 2.5 million won a month to borrow 50 million won to invest in stocks.”
He also noted that the recent rise in the U.S. stock market may have meant the civil servant had not experienced investment risks sufficiently. Kim warned, “Stocks may seem easy because the S&P 500 and Nasdaq have steadily trended upward in recent years, and you haven’t experienced a major correction. It only means luck was on your side in a bull market; carrying debt when the stock market turns down can become difficult to manage.”
Regarding the apartment purchase recommended by senior colleagues, he explained that both the location and the person’s financial circumstances should be taken into account.
Kim explained that in well-located areas such as the Seoul metropolitan area or major metropolitan cities, buying a home with a loan could be considered depending on the circumstances for living in it. However, given the real estate conditions in South Gyeongsang Province, where the person who wrote in works, and their current 130 million won in seed money, he concluded that buying a home with an excessive loan or making a gap investment would not necessarily be advantageous.
Kim stressed that, just as one should be cautious about real estate investment, one should also avoid concentrating one’s assets in stocks. He said, “We should also be wary of becoming so fixated on stocks that we think ‘stocks are the only answer,’” adding, “First, pay off the 50 million won personal loan as quickly as possible, and carefully strike a balance so your assets aren’t tilted too heavily in one direction.”


[email protected] Han Seung-gon Reporter