Journalist Natalie Stucky from Switzerland, living in Tokyo, tells the story of a Japanese family ensured that poorly invested his life savings in bitcoin. Original article published on the website Bitcoin.com.
In Japan, a widespread problem: many quite wealthy by local standards, the family is unable to save money. Here is the story of a Japanese family of four.
These people live in the Tokyo Bay area in a luxury high-rise building. Over the years, they pay numerous loans. Every month the family spends monthly income almost to the last penny and unable to pay for training daughters in private schools. Once the family found out about bitcoin. The head of the family, 42-year-old employee of the company Masao Ikeuchi, says:
At the end of November last year, the first time I invested 100 000 yen, in cryptocurrency, and then just over a month, their price has increased two and a half times. I was inspired and invested another million yen, but this year the price decreased significantly. In the end, waking up, I realized that I had lost half his savings.
The decision to purchase bitcoins Masao and his wife Naoko (name changed) came together under the influence of colleagues Masao, who told them about the “easy” way to make money. Before that, they talked with a financial Advisor. That was a great start, but soon the couple suffered serious losses. “How could this happen?” — asks the couple.
One daughter is studying in second grade of Junior high school, one in fifth grade of elementary school. The family kept two cats. The couple lead a prosperous life, typical of the “tribe of caveman” as they are called in Japan (from the expression “tower-mansion”). We are talking about the Japanese buying a new apartment worth about 60 million yen ($550 000). Basically it is three rooms with kitchen and dining room.
Monthly salary of the husband is 420,000 yen ($3800), wife of 310,000 yen ($2800); thus, their monthly income is equal to 730 000 yen ($6600). In Japan family with this income level is considered wealthy. Note that in 2018 the minimum monthly salary in Japan is about $1300, the average is about $3,000, is considered a high salary in the $7000 (about as much get doctors and lawyers).
Thus, the couple Ikeuchi earns in a year is 15 million yen ($135 000). The couple bought the apartment eight years ago, having spent virtually all their savings. The initial payment amounted to 10 million yen ($90 000). Each month they spend about 710 000 yen ($6400), so as to delay only 17,000 yen ($153) per month. By last autumn, the amount of their savings was 2.4 million yen ($21 500), and the couple began to fear that they will be able to pay for children’s education. They needed money quick and easy. They thought about the “easy investment” that would bring them more than a million yen ($9000) per year. These funds should be enough to school. And then, as has been said, they find a colleague who advised bitcoins.
The head of the family decided to study the issue and read lots of articles about cryptocurrencies, and then bought — just to try — bitcoins and 100,000 yen ($900). At first things were great: in just a month the price of bitcoins, which he purchased in late November of 2017, increased to $2350. Mr. Ikeuchi was so inspired that I bought more bitcoins at 1 million yen ($9000).
This year, however, during the recession the price was reduced three times. The head of the family nervous. He even began to buy stocks on the foreign exchange market. By the time when he fully realized what was happening, 1.1 million yen ($9900) that he has invested in bitcoin has turned into 300,000 yen ($2700).
So, Mr. Ikeuchi became a victim of the syndrome of loss of profits (FOMO — fear of missing out), and the desire to get rich quick. Investment did not increase its accumulation, and Vice versa. The media constantly share success stories of investors hitting the jackpot in bitcoins or in the currency exchanges. It is not surprising that many, like Mr. Ikeuchi, willing to take the risk.
Mizuki Yokoyama, financial planning specialist, said in an interview with the President Online:
Investments rarely work when you’re headlong rush into some alleged successful project. And if you work — often it’s just beginner’s luck. As far as I know, almost nothing is durable. I’m not saying that you should avoid investment per se. Saving on everyday expenses, people need to invest these funds in long-term projects with minimal risk.
It seems that our hero is not thought through how to manage money. However, the failure could improve its investment strategy, and next time he will invest in more meaningful way.
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