"Even with 3 million won a month, there is no answer"... The vicious cycle of reckless youth investment and parental bankruptcy

For a young person earning a monthly income of 3 million won, it is virtually impossible to buy an apartment in Seoul or enter the middle class even if they save diligently. This structural despair is driving young people toward high-risk investments, which ultimately erodes their parents' assets and repeats a vicious cycle that drives entire families into bankruptcy.

In a conversation with lawyer Park Ki-tae presented by The Man Who Explains the Economy (Kim Kwang-seok TV), the structural causes of why young people are forced into dangerous investments and how the results lead to the economic downfall of families were addressed. This conversation was conducted as part of the 'Let's Debate with Gyeong-ik-nam' series, providing an in-depth analysis of the economic crisis faced by the youth generation based on Park's book, 『Youth Bankruptcy』.

"Even with 3 million won a month, there is no answer through saving"... Youth blocked by the asset gap

Lawyer Park Ki-tae cited 'structural despair' as the fundamental reason why young people choose reckless investments. While there was hope in the past that working hard and saving would allow one to secure an apartment in Seoul and become part of the middle class, the analysis suggests that for the current 2030 generation, forming assets solely through earned income is nearly impossible.

According to Park's calculations, if a young person living in Seoul earns 3 million won per month, approximately 2 million won is required for minimum living expenses such as rent, communication costs, and food. For example, if a young person who moved up from the countryside pays a cheap monthly rent of 400,000 to 500,000 won, pays communication and management fees, and eats two meals a day at 10,000 won per meal, about 2 million won is needed for basic living expenses. Although the minimum cost of living for a single-person household set by the state is 1.55 million won, if monthly rent is added, it is a level only achievable if one starves.

In this case, even if the remaining 1 million won is saved for 10 years, it amounts to only 120 million won, and it would take 30 years to reach the 300 to 400 million won level. This figure fails to keep up with the overall rising speed of apartment prices, not just in Seoul. Park explained, "Once they decide that they will have to live on monthly rent for their entire lives and cannot become middle class anyway, they either choose to spend all their money now or opt for reckless investments aiming for a 'quantum jump'."

In this process, young people jump into cryptocurrency or stock investments aiming for high returns. This is also why, statistically, the investment return rate for men in their 20s appears to be the lowest. High-risk assets are positioned at the top of the investment items for men in their 20s. Park pointed out, "Thinking that they cannot reduce the asset gap by only collecting blue-chip stocks, they choose reckless investments with a 95% failure rate, and eventually face economic crises."

Entry opportunities taken by AI and social life starting with debt

The fact that young people start their social lives already carrying debt is also a problem. Many cases involve taking on significant debt at the time of graduation due to student loans and other factors. It is a structure where they begin social life relying on loans while having no income.

Additionally, an analysis suggested that the development of Artificial Intelligence (AI) technology is kicking away the job ladder for young people. In the past, the structure was for senior experts to hire junior-level personnel (junior lawyers, researchers, tax accountants, etc.) and assign them tasks, but now as AI replaces these roles, the opportunity for young people to build practical career experience itself is disappearing. Companies prefer experienced workers, but as the entry points to build experience are blocked, young people miss the timing for income generation and fall deeper into the cycle of debt.

The cycle of 'family bankruptcy' swallowing even parents' real estate assets

The most serious problem is that a young person's mistake directly leads to the economic downfall of their parents. If a child gets caught up in excessive investment or fraud and becomes involved in a crime (such as being a voice phishing delivery person), parents must urgently prepare settlement money or repayment funds to prevent their child's imprisonment. Recently, there have been frequent cases of people in their 20s being sentenced to prison after being framed as accomplices in voice phishing because they lent their bank accounts after being deceived by advertisements on platforms like Karrot claiming to 'create deposit and withdrawal transaction history'.

In these cases, parents must prepare repayment funds to prevent the child's criminal punishment, and for most parents, their only asset is real estate. Real estate is difficult to trade, and because price differences are large depending on the timing, they suffer massive economic losses when they dispose of it as a 'fire sale' out of urgency. Park warned, "After parents sell real estate to pay off their child's debt, they often fail to manage that cash properly and fall into scams again, or lose their entire assets by investing incorrectly in income-generating real estate such as pre-sale rights or knowledge industry centers." He added, "I often see cases where consultations that initially started with the issue of settlement money for a child's voice phishing eventually lead to the problem of parental bankruptcy."

Regarding this, Park suggested 'firm refusal' as a realistic countermeasure. He advised, "Unconditionally paying off a child's debt, especially for those around them, is not the solution," and "Rather, there is a need for a process of adjusting debt through individual rehabilitation and learning how to live within a set budget." He suggested that through rehabilitation procedures, they should experience living within a limit of 1.5 million to 2.5 million won per month to correct consumption habits. This is because once the habit of consuming by taking on debt is imprinted in the brain, it is very difficult to correct.

Source: original video (YouTube)