Beginning of money move; consideration of recent super rich’s tendency
Everyone dreams about becoming rich. Not just being rich, but a millionaire. That is why people buy lotteries every week, although they have already known that winning is highly unlikely. Even I bought lottery several times wishing for becoming a wealthy girl.
But, did you know that there are actually ‘super-rich’ people? People with financial assets worth over KRW 1 billion ($863 thousand) are called the super-rich in Korea. Surprisingly, there are about 130,000 super-rich people estimated.
The reason that I mentioned ‘super-rich’ is because their move is quite unusual these days. In the past, they just put their money at banks and enjoyed interest on deposit. However, for now, those super-rich turn their back against deposit at banks due to the reinforcement of aggregate tax on financial income along with low interest rate.
Instead, ‘super rich’ began to look for other profit-making financial products, such as immediate annuity. Two major insurance companies in Korea, Samsung and Hanhwa, developed it, and almost every annuity has been sold out. In fact, according to an associate from Samsung insurance company, about KRW 50 billion worth annuity was sold in a day on 18th of January. Hanhwa also recorded KRW 40 billion sales from this immediate annuity product.
As well as immediate annuity, the super-rich are showing their huge interests in inflation-indexed bond of which the rate of return (ROR) varies depending on inflation. Since the principal issued by the end of 2014 is untaxed, dives want to buy it without hesitation. Some of specific and special funds are rising these days as well, for example, infra-funds or ship-funds.
Those ‘untaxed’ financial products provide the super-rich with a lawful way-out not to pay tax, even though avoiding tax deserves penalty in principle. A huge amount of tax will be uncollected, since those super-rich’s amount of tax is remarkably larger than the average households’. In this way, big money moves these days, and this tendency is expected to go on for a while.
If you have further questions, do not hesitate to ask me. It is always my pleasure to answer you. See you guys 😀