?Retirement lump sum of 20 million yen becomes several million... The story of how averaging down buying led to hell at 62

Have you ever thought about rapidly increasing your retirement lump sum of 20 million yen through investments?

The story introduced here is about a 62-year-old man who concentrated his retirement allowance in individual stocks, added on margin purchases and margin trading, and ended up with a large loss.

Of course, articles like this may include embellishments in interviews and such.

Rather than determining the exact truth of every numerical detail, it’s better to view it as an example of “roughly what kinds of mistakes occur.”

?600万円 from the start in one stock. Wasn’t the problem before even margin buying?

According to the story, about 6,000,000 yen of the 20,000,000 yen retirement funds were invested in a new, speculative restaurant stock. As the stock price fell, more was bought, and eventually margin trading was used.

The issue here is not margin buying itself, but putting 6,000,000 yen into a single stock from the start.

Concentrating 30% of the retirement funds in a volatile individual stock means that even a small failure can have a large impact on the entire retirement savings.

Furthermore, if you keep buying on dips with ideas like “it will recover to the average price,” it gradually becomes a game of trying to recover losses rather than prudent investing.

Honestly, this looks like the actions of a complete investment amateur.Using margin trading speeds up the spread of the wounds.

?Do you really need to take a big risk with retirement funds in the first place?

What we should consider from this story is not only the dangers of margin buying and risky trading, but alsothe danger of treating retirement funds as money to grow rapidly.

Isn’t it dangerous to think of retirement funds as capital to significantly increase?

While still employed, if you fail in investing you can make up for it with salary.However, after retirement you don’t have that large income.

Rely on living mainly on pension and cover any shortfalls with savings. Retirement funds are exactly the money that supports that lifestyle.

Of course, considering price increases, it isn’t always optimal to hold all retirement funds in cash. If you invest, secure the money you need for living, and protect it while diversifying to grow it.

And if you’re aiming for a big win,you only need sufficient reserve funds that won’t threaten your daily lifeto be able to cover it.

?Summary: With retirement funds, first “protect” rather than “increase”

Retirement funds are not money you can earn back later.

However, during active years, the main goal is to save for the future, whereas after retirement, you should steadily use the accumulated assets for living expensesas you plan.

There is no need to aggressively hoard while living on pension. Rather, using the surplus for hobbies or travel, or enjoying slightly risky investments, is another approach.

Even if you lose in that investment, as long as you don’t touch the main funds like the retirement lump sum, your living standard won’t suddenly collapse.

Retirement funds should first “not lose” before “increase.” The surplus from pension can be used and enjoyed.

Keeping that order may be important in asset management after retirement.