People who win with "Retirement Benefit Investment" know the dangers of homeostasis.
Hello, this is Kashiyama.
“My retirement money vanished due to investing... There may be no future left.”
The other day, I heard such a tragic story secondhand.
“Pension alone isn’t enough for retirement funds.”
While society was buzzing about this, I lost my precious severance pay, and from those around me and my family
I was told...
“Why would you do such a stupid thing?”
I hope you weren’t driven to despair.
But this isn’t a rare story.
It can happen to anyone.
Yes, even to careful people who think“I wouldn’t do such reckless things.”.
Even if you live very prudently and are not the type to take reckless actions,
there is a real possibility you could fall into such a disastrous situation.
Not only with severance pay, but also with inheritances, at various moments
when a lump sum comes in
you might choose to squander it in one go.
Or invest in business, add on to your house, or invest in stocks.
This way of thinking isn’t inherently bad, but
most people lack experience in managing large sums, so
their business and investment judgments are sloppy, and ultimately they lose money.
Brad Klontz, Ted Klontz
“11 Cards to Not Be Unhappy About Money”
First edition issued June 1, 2012, P.70
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As the above text explains,
humans tend to stay in the familiar, comfortable environment they have grown accustomed to.
Beyond that comfortable environment, when you step out,
people feel a strong subconscious pressure to return to their original setting.
Even when economic levels rise or fall,
they will almost always try to revert to the economic level they have been used to.
You may have heard that “many lottery winners go bankrupt afterward,”
and this bankruptcy is precisely because
the instinct to return to the prior state kicks in.
“After all, I was doing well financially, why would I drop back down?”
This may be hard to accept, but
just as the urge to eat cannot be suppressed,
humans cannot suppress the unconscious impulse to return to the familiar economic level.
For example, the body has a function called“homeostasis” that keeps body temperature at a constant level,
and maintaining the same state is essential for living.
Also,
when the economic level rises,
so too can the relationships with people around you deteriorate.
For example, when you go out to eat with friends
you used to worry about prices and choose places accordingly,
but if you become rich and no longer worry about prices,
there can be a distance between you and your friends.
Your friends might say
“Huh, you used to care so much about prices… why now?”
and jealousies may arise,
and you may think,
“It’s a hassle to constantly align with them.”
Even if you don’t voice these things,
the general mood can convey mutual emotions,
and it can become a cause of dissolving relationships.
In relationships,the economic level of each person
is a very big factor.
That’s why,
the more you value your relationships,
the more you may choose actions that lower your economic level
to maintain those ties.
Of course, there are many cases,
and it does not happen in every case, but
when you suddenly acquire a large sum, you should be especially cautious.
For example, if you suddenly receive 10 million yen as severance pay,
and you think of investing to grow the funds,
no matter how cautious you are,
you may end up making investments that break the rules and
lose the funds, so please be careful.
By the way,The Nikkei newspaper (June 30 morning edition) published
the following poll results about public opinion.
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When asked how to address the lack of funds for retirement,
62% said, “We should cover the shortfall with savings and effort other than pension.”
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More than half of people feelthat they must somehow prepare for retirement on their own,
receiving a sense of crisis.
Against this backdrop,
many people think, “When I have a lump sum, I’ll try investing,”
and I think quite a few are considering that,
but the reader of this article should,
not jump into investing the entire amount at once,
which would be dangerous.
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Retirement funds should be safely invested
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Up to this point,
I’ve talked about“When you receive a lump sum such as retirement pay or inheritance, be careful.”
And yet, even if you read this article seriously,
when a large amount comes in,you might feel, “I have this much money, so…,”
and your emotions may grow,and you may feel like taking high-risk investments.
There is one more thing I want to convey.
“If you have enough money already,
there's no need to engage in high-risk trades, right?”
This is the point.
If you have a lot of money on hand,you should use a defense-focused trading method
where even modest profits can leave you with substantial gains.
There’s no need to chase a big windfall.
The trouble is,people with no investing experience
and who don’t know the fear of investingtend to be greedyand try to double 1 million yen to 2 or 3 million,
which leads to reckless trades,
but please avoid being ruled by such desires.
Well then,retirement funds,
when a lump sum comes in,
exactly what trades would be good?
The “Wave Riding Investment Method” I teach in Stock Academyis indeed the strongest.
Because
as long as you follow the rules properly,
you won’t end up losing your funds.
And you can steadily accumulate profits.
There may be times when you incur unrealized losses,but
you can offset them without actually triggering a loss cut,using methods that are psychologically easy,
to erase unrealized losses.
Even though you have the time to enjoy retirement,
you don’t want to waste that time on trading stress, do you?
Anyway,if you have ample funds,
or there are plans to have them in the future,
please make sure not to waste money and
think about steadily growing your funds.
With that, today as well,
thank you for reading until the end.
Keizo Shimozawa
