There's A Personal Finance Message In ... - Business Insider

The video for ?Gangnam Style,? a pop song by Korean rap star Psy (short for Psycho), has been raging across the world.

It has racked up 221 million YouTube views as of this writing and is the number one song downloaded on iTunes. Psy himself has been on a media tear in the United States and has appeared on the?MTV Video Music Awards,?Ellen?(twice),?The Today Show?and?Saturday Night Live.

And if you haven?t yet seen him, his addictive video or any of the many parodies it has spawned (by the?Oregon Duck mascot,?Naval Academy cadets, a?wedding party,?lifeguards?and?more), get ready to see more of him, because he has signed with Scooter Braun, the man who made stars of Justin Bieber and Carly Rae Jepsen.

But there?s no reason for a personal finance site to be writing about a silly song known for its horse-riding dance, right? Well, actually, it turns out this addictively catchy song and its accompanying video relay a lesson that could help you with your own spending habits.

What Gangnam Style Is All About

The words ?gang? and ?nam? literally mean ?south of the river,? but Gangnam with a capital G is an upscale neighborhood of Seoul (you guessed it) on the south side of the river. As the Beverly Hills of South Korea?s biggest city, it also occupies a psychic place in the minds of Korea?s 99% and represents the luxurious life for which they strive.

The neighborhood is just seven square miles but holds 7% of Korea?s GDP. For comparison, New York state, which is 3,000 times the size of Gangnam holds 7% of U.S. GDP. Forty-one percent of students at the nation?s most prestigious college, Seoul University, come from Gangnam, which in the U.S., would be like having 41% of Harvard students come from Manhattan.

The neighborhood is full of high-rise apartment buildings, high-end department stores, the city?s trendiest boutiques and hottest clubs, and a lot of plastic surgery clinics. As U.S.-based Korean blogger Jae Kim says in?her analysis of the song, ?In short, it?s like the U.S. Upper East Side plus Beverly Hills minus tradition; or I?d rather say it?s more like ?Dubai???and here, she refers to the area?s recent development??built on Korean cabbage and Korean pear fields.?

What ?Gangnam Style? The Song Is About

But Psy?s rendering of ?Gangnam Style? highlights the superficiality of this dream. In the opening scene, Psy is lounging on a beach, dreaming he is being fanned by a beautiful girl. As the camera pans out, you realize he is actually lying on a chair in a sandy children?s playground.

Then you see him in a tux with a girl on each arm, strutting as though down a red carpet, except they appear to be in an underground parking lot, and instead of confetti fluttering down upon them, trash is flying at them with blizzard-like force.

In another scene, he parties like a rock star in a bus outfitted with disco balls, but his fellow partygoers are retirees wearing sun visors.

Meanwhile, in all these scenes, he?s dancing as though he?s riding an invisible horse, almost as though he?s the knight of his own imaginary Camelot.

The Truth Behind This Lifestyle

While the video is hilarious and seems to offer a sharp critique of the Gangnam lifestyle, it is also based on some hard facts of the personal finances of South Koreans, as?The Atlantic?points out.

Many families appear to be pursuing the Gangnam lifestyle whether or not it fits within their budget. For instance, Psy states his ability to drink coffee in one gulp and expresses a desire for a woman who drinks coffee too. What is so special about coffee, which is cheap? Well it turns out that in Korea, there?s a popular joke about women who eat $2 ramen for lunch in order to afford a $6 coffee at Starbucks, mocking women who spend more than they can afford.

And indeed, spending more than you can afford seems to be the trend in Korea.?The Financial Times reports?that household debt in South Korea has reached a perilous high: 155% of disposable income, which is higher than the U.S. figure before the subprime mortgage crisis (138%).

The country?s obsession with achievement drives people to buy luxury handbags and cars and pay for expensive tutors that will get their children into the top universities, according to?The Washington Post.?Sadly, these aspirations outweigh any lessons that Koreans might have learned from?the credit crisis?the country endured in 2002, when Koreans had an average of almost five cards per person, and the government had to step in to bail out the country?s largest credit-card issuer.

While credit card ownership dropped to an average of about three per person afterward, it is back up to almost five again. A little over a year ago, the South Korean government and economists rolled out several policies to get Korean consumers to be more cautious about their spending before a crisis does it for them.

What You Can Learn From ?Gangnam Style?

So, now that you know the price Koreans pay for pursuing the Gangnam lifestyle, here?s what you can learn from this silly song:

• Don?t live beyond your means. If you want to buy something out of your reach, remember that studies show that while we often think that buying or owning something will make us happier, what actually happens is that after an initial spike, our happiness level reverts to what it was before the purchase. Also, when you feel tempted to buy something you can?t afford, ask yourself whether the joy you?ll get from this object is really worth the pain and stress of paying off the debt. And if your spending problem is simply not knowing where your money is going, then?set up a budget?in LearnVest's Money Center and?start tracking your expenses.
• Don?t try to keep up with the Joneses. Remember that everyone has a different life path and circumstances are constantly changing. You may envy your friend?s lifestyle now, but in a year, the tables may be turned. Besides, you never know: Your friend?s fabulous lifestyle may not be funded by cash, but by debt.
• Don?t get into credit card debt. While debt is debt, there are some kinds that are worse than others. Credit card debt is one of them because the interest compounds, meaning that with every day you don?t pay it off, it grows bigger. And unlike a student loan, a mortgage or a business loan, what you get out of it doesn?t appreciate in value or increase your earning power. (If you?re working your way out, try LearnVest's?Get Out of Debt Bootcamp.)
• Finally, remember that there are so many ways you can enrich your life for free. For instance, you can?underindulge,?because the less you have of something, the more you enjoy it;?savor?so you fully enjoy each experience;?and regularly express?gratitude, so you remember how much?you already have.

As Psy shows as he traipses around Gangnam, the more we try to live lives outside of our means, the more ridiculous we look?while also probably feeling worse about ourselves:?Psy himself said?of his experience filming the ridiculous scenes in ?Gangnam Style,? ?Human society is so hollow, and even while filming I felt pathetic. Each frame by frame was hollow.?

So, enjoy doing the horse-riding dance, but don?t forget the price of having Gangnam Style.

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This story was originally published by?LearnVest.

Source: http://www.businessinsider.com/gangnam-style-finance-tips-2012-9

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