[ad_1]
“What is a house to me?” “Interview House” began with this question.
A product with investment value, a space where I live. In the meantime, I’d like to tell you an honest story about a house you may be wandering through. Buying an apartment that is worth climbing is not bad. It wouldn’t be a sin to make money out of it. But it will not be the absolute good that everyone should pursue.
I am not trying to give an answer through an article. I have no intention of judging who is right or who is wrong. The purpose is to listen and share stories about the space that each person wants through interviews with various people.
I hope this is an opportunity for people who read this to think about the house I want. The interviews try to meet and listen to as many different people as possible of age, profession, education, region, etc. If you want to share your opinion or recommend someone around me, please contact us by email. I will visit you in person.
In March, the stock market crashed. It was due to concerns about the economic recession following the outbreak of the new coronavirus infection (Corona 19). Foreign investors kept selling. Individual investors were different. It bought representative Korean companies such as Samsung Electronics. They were called ‘Donghak ants’ that protect the Korean stock market from foreigners. At the forefront was the CEO of John Lee Meritz Asset Management, named ‘John Bong-jun’.
In a telephone interview on the 13th, John Lee said there is no “stupidity” to investing between 80 and 90% of all assets in real estate. He believes that the asset to invest is not the house, but the shares. “It is much cheaper to live monthly than to buy a house,” he emphasized, “think about the opportunity cost.” This interview was conducted by phone because the reporter was isolated with Corona 19.
◆ Invest in ‘work assets’
Representative John Lee is famous for being an investor who advocates not buying a home. Their logic is clear. Stocks are buying companies. Companies create added value by doing their own work. But what about real estate? It doesn’t work You think you shouldn’t invest in assets that don’t work.
Is it really so? Based on the results of calculating the annual rate of return when eBest Investment & Securities buys shares of Samsung Electronics, apartments in Seoul and apartments across the country at the end of the year and holds them for three years, the average return of Samsung Electronics since 2010 it has reached 47.64%. The performance of apartments in Seoul far exceeds 9.65%. However, if you expand the scope to the entire market, the situation is a little different. During the same period, the KOSPI return was only 6.18%. That’s why John Lee insists that investors should invest in stocks, not markets.
He noted that the obsession of Koreans with houses is excessive. He pointed out that it is very dangerous to have almost no stock in all assets and more than 80% of them are real estate. “Also, most of them are in debt,” John Lee said. “Considering the characteristics of low-currency real estate, it can become a serious problem when the economy gets tough.”
They feared that the same could happen in Korea, as in Japan after the collapse of the housing bubble. “There are still more and more empty houses in the provinces. Just like in Japan. As the fertility rate drops and the population declines, there will be fewer and fewer reasons to own a home.”
It was also a problem to think of it as money to throw away the rent. Rather, he advised them to consider the opportunity cost of buying a home. “Use the money you want to have at home to stock up,” said John Lee. He said the ‘5% rule’. For example, when the house price is 1 billion won, the monthly rent is advantageous if the monthly rent is less than 5%. He also pointed out that “financial illiteracy” does not take into account interest on 1 billion won loans, maintenance costs such as taxes and opportunity costs while thinking that 4 million won a month is a waste.
He also lives on a monthly income. His home is an apartment in Sajik-dong, Seoul, near the company. A wife and two cubs live together. The main reason for choosing Sajik-dong is because it is close to the business. The environment was also considered. He stressed that we should not compromise on “quality of life” when choosing a home that is likely to rise. “There are roads around the house where I live, and there are not as many people as the center,” he said. “There are not many bars, the air is good and satisfying.”
I’m not saying you should never buy a house. He also bought a home while in the United States. The problem is the price”. His assessment is that the price of the house is too expensive now. He advised: “By the early 1990s, the price of American homes had plummeted,” he warned. “It is a good option to buy when the house is not selling and the business is not available.”
◆ Teach financial literacy instead of Kook Young-soo
He analyzed that private education in Korea was one of the factors that caused the obsession with the home. He also said that there was nothing unnecessary. Representative John Lee noted that “Korean parents must be honest.” “What is the reason to study? You don’t want to be rich by going to a good university and getting a good job. But why are you telling me to study well. You have to tell me to be rich.”
He stressed that the education to get rich is not ‘Kook Young-soo’ but financial. He also told parents who spend a month’s monthly salary on private tutoring, ‘I’d rather buy a fund with that money.’ He advised: “If you think about private education expenses starting in kindergarten, you can earn between 1 and 2 billion won when you graduate from college,” he advised.
Even if we think about the future of Korea, he said that we should stop the phenomenon of money rushing into real estate. It is explained that just because money is concentrated in properties that do not work and the price of a house rises, the country does not develop. “Capital needs to work. Start-ups follow one after another, and when money comes in, companies like Tesla and Apple will come out. If you invest only in real estate like Japan, these innovative companies will not come out. Look at Japan. What innovations are next? from Sony? ”
◆ Don’t look rich, get rich
He advised young people several times: ‘Don’t stay at home.’ He said, “You shouldn’t spend as much money around the house as possible” and “If your salary is low, go out and live outside and take time to travel.”
“If you live in a good neighborhood to look like a rich man, in the end you can’t get rich. Don’t try to look like a rich man. Be rich.”
The golden ratio of real estate investing, he thinks, is 20-30% of all assets. They told me to have 30-40% of the shares and cash or insurance for the rest. He said, “If your assets are 10 billion won, there is no problem living in a house worth 2 billion won,” he said. “It’s the dumbest thing to buy a 2 billion won house with 500 million won.”
If you live on a monthly rent, you are instructed to use 20-30% of your income. The rest is an explanation for preparing for retirement by investing in stocks. He emphasized that “there is no place where the monthly rent is cheaper than in Korea,” he stressed, “It is not difficult to get an average annual return of 6% if you invest in stocks in 5-10 years without looking at them in the short term.
He said the house should be taken differently. He stressed that it is a space where you can take time to take care of your home, relax in it and feel comfortable. “A house is a place to sleep, a place of comfort. Renting a house or buying a house does not mean much. Instead, it is not a good idea to buy a house from a young age. It means that my money is tied to the house. And it means paying that debt for life. You may not be ready for retirement. “
The three things she wanted to have at home were sunlight, wind, and a bidet. It was a response that contained his philosophy that a home should be a warm and friendly environment.
Reporter Kang Young-yeon [email protected]
