"Jumping Onto a Falling Train": Burst of 'Debt-Fueled Investing' Bubble… Youths See 83 Billion Won in Principal Written Off

The burden is growing for young people who borrowed money to invest in stocks, anticipating a rise in the domestic stock market this year.

As stock price corrections continue, centered recently around semiconductor shares, the number of young people unable to cope with their debt is also on the rise, data showed.

According to data submitted by the Credit Counseling & Recovery Service to Representative Min Byung-duk of the Democratic Party of Korea, a member of the National Assembly's Political Affairs Committee, the number of people aged 20 or younger who received principal reductions through personal workout programs in the first half of this year stood at 5,756, a 7.1% increase from a year earlier.

For those in their 30s, the figure rose 16.5% from 9,427 to 10,983.

The scale of principal reductions has also grown.

The total amount of principal reduced for those aged 20 or younger reached 61.5 billion won, up 12.8% from a year earlier, while that for those in their 30s rose 26.9% to 21.8 billion won.

Experts analyze that amid the stock market rally this year, the spread of the so-called FOMO (fear of missing out) sentiment—the notion that missing out on investing now means missing the opportunity—led many young people to jump into debt-fueled investing.

However, as stock price corrections have continued recently, led by semiconductor stocks such as Samsung Electronics and SK Hynix, some young people who invested funds intended for marriage or jeonse (lump-sum housing lease) deposits are known to have suffered massive losses.

The problem is that such investment failures may not end as individual hardships.

According to a labor market analysis report by the Korea Employment Information Service, young people with debt are more likely to take on unstable jobs than those without debt.

Researchers analyzed that due to the burden of debt, an increasing number of people may choose to take immediate employment rather than wait for stable jobs.

Experts pointed out that since excessive debt-fueled investing among the younger generation could increase burdens on the labor and financial markets beyond individual insolvency, managing investment risks is more important than anything else.

(Reported by Kim Minjeong | Video by Lee Eui-seon | Graphics by Yook Do-hyun | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.