[For Beginners] Why Investing to Become a “Millionaire” Is Dangerous

“I want to make 100 million yen in stocks and become a millionaire.”

Some people might think this at least once when they start investing.

However, if you only chase the goal of 100 million yen, you may end up making reckless investments.

In this article, I will explain why investing with the goal of becoming a “millionaire” can easily become dangerous.

What is a “millionaire”?

“Millionaire” (Okuribito) is a term generally used to refer to someone who holds 100 million yen or more in financial assets.

Building a large amount of assets is not a bad thing in itself.

However, thinking “I want to reach 100 million yen quickly” can influence your investment decisions.

Why is it dangerous?

When you try to build a large amount of assets in a short period, you tend to aim for larger profits.

For example,

・Concentrating on stocks with high volatility
・Concentrating funds into a single stock
・Using debt to invest
・Chasing stocks that are surging

can lead to such actions.

While you can aim for large profits, the possibility of incurring large losses also increases.

What is important is not just “how much you increase”

In investing, it is important to consider not only the profit but also how much risk you are taking.

Instead of setting only the amount of “100 million yen” as your goal,

・Investing with an amount that is not unreasonable
・Diversifying to suppress risk
・Thinking about long-term asset formation

are also important ways of thinking.

Summary

Aiming to become a “millionaire” is not a problem in itself.

The danger is taking on unacceptably high risks because you are in too much of a hurry to reach the 100 million yen goal.

In investing, you should consider not only “how much you can grow your money,” but also how much of a loss you can withstand.