Behavior patterns of people who quickly accumulate investment funds
Hello, this is Gesan.
2020 has alreadypassed the first month quickly,
and in less than two monthsthe cherry blossom season will arrive.
Some peopleare facing retirement at the end of March
and feel economic anxiety about their future life.
It seems there are such people.
In fact,consultations related to “retirement anxiety”
are never-ending…
In 2013,the “Act on Stabilization of Employment of Elderly Persons”
was amended,and if a personwants to,
they could workprincipally until 65.
According to data from the Ministry of Health, Labour and Welfare (FY2018),
to secure employment up to 65,
99.8% of companies have implemented some measures.
(Reference:
https://www.mhlw.go.jp/stf/houdou/0000182200_00002.html)
In other words,almost all companies
have established a system where people can work until 65.
However…
in reality,even after turning 60there are few companies where you can continue working as before.
Some companies raise the retirement age or abolish it,
which means
there are only about 20% of companies that say,
“Keep working as you have been after 60.”
The remaining companies either have employees retire at 60 and then
re-contract them,
introducing a “continuation employment system.”
Because they re-contract,
the terms may be different from before.
Lower salaries,
and you may be forced into tasks you don’t want to do.
Of course that would happen.
Even after turning 60 and being able to work,
not necessarilythe environment is good for workers.
As average life expectancy continues to rise,
employment systems are not keeping pace with the reality.
I would say.
Moreover,on the employer side
there are many cases where they lack the manpower to keep employing workers,
or other reasons.
But there are many such cases.
With consumption tax rising and pensions unreliable,and after re-employment paying little,
more and more people seek financial advice…
In response to consultations,
the one and only solution I can offer
is this:
If you acquire the skills of stock trading,
everything will be resolved,so to speak.
In stock trading,if you open a brokerage account
by the time you are 80,
you can continue trading beyond 80.
Practically speaking,there is no retirement in stock trading.
As you age,even if physical strength wanes,
even if your body becomes less mobile,
as long as your mind stays sharp,
you can continue generating lifelong profits.
There is no fear of getting fired.
Is there any other job like this?
If you’re interested in stock trading but
haven’t been able to take the first step yet,
you may be in that situation, but
if you have even a little interest, you shouldstep forward at least one day sooner
and take the first step.
However,to start investing you may not be able to
prepare the investment funds,
and some give up.
Even if you tighten your budget,you may still fail to save funds,
and many people are in this situation.
Not even being able to stand at the starting pointis frustrating, isn’t it?
So this time,I will share advice to save investment funds
from the perspective of “behavioral economics.”
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I have something to ask you.
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When you decide to save investment funds,
most people first think of“frugality.”
Increasing income isn’t that easy, but
frugalityis a quick way to start and yields results quickly.
But unfortunately,even if you are frugal,
you may not save much money.
On the contrary,you may even end up reducing funds.
Why?Because humans have a certain habit.
Before explaining that habit,
I have two questions for you.
For example,during lunch break,you leave the office to eat.
In front of your office is
a large Yoshihara dining place.
If you eat there normally,it costs around 900 yen or more.
“No, I’m frugal,”
you think, and remember that 10 minutes away from the company
there is a gyudon chain, Matsuya.
Gyudon (regular) costs380 yen, so you save about
500 yen.
Yoshinoya is right in front of the company.
Matsuya is a 10-minute walk away.
Which would you choose?
Then,
one more question.
Your computer broke down.
You can’t do without a computer!
So you go to Yodobashi Camera.
You find a decent laptop for about 200,000 yen.
But when you look at the same model on Amazon,
it’s about 5,000 yen cheaper!
Plus you compare with other sites
or price comparison sites and you thinkyou could save 500 yen or 1,000 yen more.
Now,will you continue researching?
If you do, how much time would you spend?
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Small amounts are stingy,
large amounts are wasteful
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What kind of answer you would giveis unknown to me.
But I can roughly predict.
Likely,
when prices are under 1,000 yen,
people care about every 100-yen difference,
but when products reach 100,000 or 200,000 yen,
they stop caring about 100-yen differences.
That is human habit.
This has been revealed by
experiments by economists.
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People are stingy with small items,
but wasteful with large items.
As a result, frugality becomes almost futile.
Spending hours online to save $150 on shoes,
yet not spending time to save $2000 on a car.
This research shows that
the standard model of rational behavior in economics
is deviated from by people in everyday life.
Cendil Mullairnathan
Elder Shafiel
‘The Behavioral Economics of Scarcity for People Always Saying They Lack Time’
July 25, 2015 electronic edition
honto 34% or more
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Please remember this.
Human behavior can be remarkably irrational.
But,if you truly want to save investment funds
you must choose rational behavior.
Having little funds does not mean you cannot win in investment,
butto start investing you need at least a minimum amount of funds.
I hope today's discussion helps increase your investment funds.
Now, please enjoy the rest of today.
Thank you for watching until the end.
Keizo Shimoyama
