Are you stuck with the same salary? Did you know you can start investing with just 1,000 won?

2030 Society’s Investment Reality, What Is the Problem?

Prices are soaring, but wages remain stagnant, and the national pension system is unstable. Around you, there are people who have succeeded with real estate and cryptocurrencies, but it seems you don’t even have the spare funds to start investing. In this situation, many 2030 office workers think that “investment is a game for those with lots of capital.” But is that really the case? Recently, the investment market has lowered its entry barriers more than expected. Especially with the introduction of small-scale investment methods, you can now invest in various assets with just a few thousand won.

The Reality of Small-Scale Investment: Not Just a Game for the Rich

In traditional investment methods, buying a single share required the current share price in funds. Real estate also required a huge initial capital. Under this structure, naturally, those with more capital had the advantage.

However, small-scale investment has completely overturned this structure. It is an investment method that allows entry into various financial products with small amounts of money, enabling even those with limited funds to participate fully. The era where “I can’t invest because I lack capital” no longer holds.

Accessing Blue-Chip Stocks Through Fractional Trading

In September 2022, the five major domestic securities firms(NH Investment & Securities, KB Securities, Mirae Asset Securities, Kiwoom Securities, Hanwha Investment & Securities) simultaneously launched fractional trading. This was a small revolution in the investment market.

For example, suppose a blue-chip stock is priced at 10 million won per share. In the past, buying this stock would require 10 million won. But with fractional trading, you only need to buy 0.001 shares, which means just 10,000 won is enough. If a stock is priced at 1 million won per share, then? You can invest with just 1,000 won by purchasing 0.001 shares.

Here’s how this system works: securities firms pool investors’ buy orders to purchase one full share, then issue profit securities divided among investors. Thanks to this, investors with limited capital can gradually accumulate desired stocks.

However, there are disadvantages. Because of the structure involving securities firms, real-time trading is difficult, and fees tend to be higher than regular stock trading. Also, it’s not easy to buy at an exact desired price.

Despite these drawbacks, this method offers great opportunities for beginner investors. You can experience actual investing while accumulating small amounts of your preferred stocks.

ETFs: The Easiest Way to Diversify

The advantage of stock investing is the ability to choose and control your investments directly. However, there is a risk of significant losses depending on the good or bad news of individual stocks.

Funds are managed by professionals, making them more stable, but quick trading is difficult.

Exchange-Traded Funds(ETF) combine the advantages of both. You can buy and sell pre-constructed portfolios like stocks, while also diversifying across various assets.

For example, buying an ETF that tracks the Nasdaq or S&P 500 gives you the effect of investing in hundreds of companies at once. Even if individual stock prices are expensive, ETF prices are low enough for anyone to access easily.

There are various types of ETFs. Index-tracking ETFs follow indices like KOSPI, KOSDAQ, or Nasdaq. Sector ETFs invest only in specific industries such as technology, finance, or energy. Dividend-focused ETFs gather stocks with high dividend yields.

Because ETFs tend to have much lower volatility than individual stocks, they are ideal for investors seeking stable asset growth.

REITs(REIT): A New Way to Invest in Real Estate

Real estate investment traditionally required significant capital. It also involved high tax burdens like acquisition and transfer taxes, along with ongoing costs such as management fees.

REITs(Real Estate Investment Trusts) solve all these problems. They pool funds from multiple investors to invest in various real estate assets like apartments, hotels, offices, and warehouses, and distribute rental income as dividends.

REIT management companies must return over 90% of their profits as dividends to avoid corporate taxes. This is the biggest appeal of REITs. They generate steady cash flow, which can be used for living expenses or reinvested.

Since they are less volatile than the stock market, they are good for stabilizing your portfolio. Especially for young investors wanting to experience rental income from real estate, REITs are ideal.

CFD Trading: Seeking Big Opportunities with Small Funds

Contract for Difference(CFD) is a more challenging investment product. It involves paying only the difference in price movements without actually owning the stock.

Specifically, if a stock’s buy price is 50,000 won and the sell price is 51,000 won, the difference is 1,000 won. With CFD, you don’t need to pay the full 50,000 won; you only trade the 1,000-won difference. The securities firm handles the actual buying and selling of the stock.

The biggest advantage of this method is leverage. Investors can adjust leverage ratios as they wish, allowing for potentially high returns with small amounts. There are also no capital gains taxes.

Both short and long positions are possible, making it attractive.

However, caution is needed. As trading volume increases, the risk of loss also grows. Beginners should use leverage carefully.

Which Method Suits You?

Interested in blue-chip stocks but lack capital? Start with fractional trading.

Want to steadily grow your assets? Invest in ETFs.

Looking for additional income through dividends? Consider REITs and dividend-focused ETFs.

Aiming for aggressive returns? CFD is an option. But start slowly after thorough research.

Ultimately, the true value of small-scale investment lies in “lowering the entry barriers.” Now, you too can participate in the investment market. Why not start with just 1,000 won?