South Korean parents are increasingly opening investment accounts for their children at very young ages, with accounts for kids under one year old tripling to about 15,000 in June at Mirae Asset Securities. Overall, new account openings for kids under nine have surged by nearly 60% to around 185,000. This shift is largely influenced by the recent AI-driven market rally and a desire for generational wealth planning, despite some market volatility.
Parents like Lee Hye-won, a nurse, prioritize long-term investments over savings. She and her spouse invest around 300,000 to 400,000 won ($210) monthly in U.S. ETFs, focusing on the S&P 500. Others echo similar sentiments, valuing the advantages of compound growth over time.
Economic experts suggest that this trend is likely to continue regardless of market fluctuations, marking a shift from Korea’s traditional focus on real estate to equity investing. Currently, three-quarters of household wealth in Korea is in real estate, but changing tax regulations, such as high capital gains taxes on property, are encouraging investments in stocks.
Additionally, there are tax benefits for parents gifting money to their children for stock investments, with exemptions available up to 20 million won once every ten years. Brokerages and the government are also promoting this trend; for instance, Kakaopay Securities is offering stocks worth 100,000 won for newborns next year, while new regulations allow parents to open accounts from their smartphones, removing previous barriers to entry.
