Minimalist Investing is Based on “Simplicity” — Don't Own Too Much Money Either

Introduction: Investing seems a bit difficult

“I want to start investing.”

I’ve thought that before, but at first, it was a little scary.

Stocks, investment trusts, ETFs, NISA, iDeCo…

The more I looked into it, the more unknown terms appeared.

If you watch YouTube, various people are saying different things.

“This stock is good.”

“This investment trust is recommended.”

“This industry is hot right now.”

When looking at such information, I start to lose track of what I should choose.

But, after becoming a minimalist, I started to think.

Isn’t it fine for investing to be as simple as possible?

For me, having reduced my possessions, the idea of “not increasing too much” also fits well with investing.

Chapter 1: First, simplify your household budget rather than investing

Before starting to invest, there is something I think is important.

That is to grasp the flow of money every month.

How much income is there,

how much is used for living,

and how much remains.

Even if you start investing without knowing this, you will remain vaguely anxious.

So, the first thing to do is a household account book.

And, review unused subscriptions and unnecessary fixed costs.

Just as a minimalist reduces unnecessary things from a room,

reduce unnecessary expenditures from the household budget.

I think it is not too late to invest after that.

Chapter 2: Do not invest money necessary for living

When you start investing, you end up thinking, “Should I invest as much as possible?”

However, if you put money necessary for living into investments, you will be in trouble when there is a sudden expense.

Therefore,

separate money to be used in the near future from money for the future.

Daily living expenses.

Money to prepare for sudden expenses.

And, money that is not planned to be used for the time being.

Just thinking about these roles separately makes you feel much more at ease.

Investing is not something done to make life difficult.

Chapter 3: Do not increase investment products too much

After becoming a minimalist, I began to feel that “having many choices” is not necessarily convenient.

Investing is the same.

If you buy various products, it seems you can diversify that much.

However, if products increase, things to manage also increase.

“What did I buy this for again?”

If you end up in that state, it is a bit counterproductive.

That is why I

keep it simple within a range I can understand.

I like that way of thinking.

If you are going to invest, understand what you are investing in.

I want to cherish at least this.

Chapter 4: Value “continuing for a long time”

When you start investing, you inevitably become concerned about daily price movements.

It went up today.

It went down today.

Every time I watch the news,

“Is it okay?”

I feel anxious.

However, if you are thinking about long-term asset formation, there is no need to keep chasing daily price movements.

Rather, there are times when you get tired by checking every day.

That is why I

want to make the time spent on investing minimal as well.

I think.

Rather than looking at stock prices every day, I do my own work, enjoy hobbies, or read books.

That suits me better.

Chapter 5: Try reducing investment information as well

When you start investing, information comes in more and more.

YouTube.

SNS.

News.

Investment blogs.

Email newsletters.

At first, it is educational, but the more you look,

“Should I buy this too?”

“Should I sell now?”

I get confused.

So, just like when reducing things, I decided to organize information as well.

Instead of looking at everything,

look only at the information necessary for yourself.

Studying about investing is important.

But, try not to let the act of continuing to collect information become the goal itself.

I think this is also a part of “simple investing.”

Chapter 6: “Want to continue” rather than “want to make money”

Of course, if I am going to invest, I want to increase my money.

This is an honest feeling.

But,

rather than continuing to search for “is there something that makes more money,”

think of a method that can be continued without strain.

I feel that suits me better.

Since investing is about the future, there is nothing certain.

That is precisely why, rather than investing amounts that pressure your life or getting involved in things you don’t understand well, continue within a range you can be convinced of.

Don’t rush.

Don’t be too greedy.

Don’t get involved in things you don’t understand.

It’s simple, but I value that way of thinking.

Chapter 7: If a beginner is starting, first these 5 steps

I have written up to here that “simple investing is good,” but

“Then, what should I actually start with?”

I think there are people who think that.

If it were me, I wouldn’t start from choosing a product right away.

First, start from organizing the money around you.

STEP 1: Confirm the monthly flow of money

The first thing to do is confirm the household budget.

Every month,

“how much comes in”

“how much is used”

“how much is left”

grasp this.

You can use a household account book app, or anything is OK as long as it is a method you can continue.

First, know where your money is going.

When reducing things, you first confirm what is in the house.

Money is the same.

First, start from “visualization.”

STEP 2: Before investing, secure money necessary for living

Next, what I want to think about is money that will be needed soon.

Illness, injury, sudden expenses, changes in work, etc., unexpected things happen in life.

Therefore, think of money to turn into investments and money to set aside for living separately.

Rather than thinking “how much money can I invest,”

I think it is easier for a beginner to think “how much money can I invest without having trouble in life.”

STEP 3: Know systems like NISA

Once prepared, next, research tax-advantaged systems.

If you are thinking about individual asset formation in Japan, NISA is one of the systems you want to know about.

However,

“Because it is NISA, you will definitely make money”

is not the case.

Since NISA is merely a mechanism under the tax system, you need to think separately about what you are actually investing in and what kind of risks there are.

Don’t rush here, first understand the system itself.

Don’t buy things you don’t know right away.

This is the same for investing and minimalism.

STEP 4: Start from things you can understand

Here, for the first time, think about the product to invest in.

While a beginner, rather than buying just because it is a topic on SNS,

“What is this investing in?”

“How much is the possibility of the price dropping?”

“What are the fees?”

etc., check for yourself.

And, don’t force yourself to buy things you don’t understand well.

There is a possibility of principal loss in investing.

That is precisely why,

“don’t buy things you don’t understand”

it is safe to make a simple rule like that.

STEP 5: Start with a small amount and make it a mechanism that can be continued

There is no need to invest a large amount from the beginning.

Start within a range that is not unreasonable for your household budget.

And, make a mechanism that is easy for you to continue, such as accumulating a fixed amount every month.

Just because you started investing, there is no need to check stock prices every day.

Rather,

“once you make a mechanism, don’t touch it much”

that level feels more like a minimalist to me.

Of course, if your living environment or income changes, review the amount and method.

Investing is also not “buy and finish,” but maintain it occasionally.

I think that level of distance is fine.

Precisely because you are a beginner, decide “what not to do”

When you start investing, various information enters your eyes.

“You should buy now!”

“This stock is soaring!”

“From now on, this industry!”

When you see such information, you end up rushing.

That is precisely why, decide “what not to do” first.

For example,

* Do not turn living expenses into investments

* Do not invest by borrowing money
* Do not buy products you cannot understand
* Do not invest based only on SNS
* Do not buy and sell emotionally just based on price movements
* Do not cut down on living too much for the sake of investing
etc.

In investing, not only “what to do”

“what not to do” is also important.

This is very similar to when reducing things.

Chapter 8: For a minimalist, investing is something that increases “freedom”

The purpose of starting to invest differs depending on the person.

It might be for old age.

It might be for things you want to do in the future.

It might be that you want to increase options for how to work.

What I want to value is,

rather than increasing money itself, increasing options for the future.

By reducing things, life became a little freer.

In the same way, regarding money,

“if I have this much money, I can be a little at ease”

I want to create a state like that little by little.

Investing is one of the methods for that.

Conclusion: Don’t own too much of investing either

By becoming a minimalist, I learned the comfort of ‘less’.

Reduce possessions.

Reduce shopping.

Reduce fixed costs.

Reduce information.

And, don’t make investing too complicated either.

It’s more about what I can understand than owning many products.

It’s more about choosing the necessary information than gathering a lot of it.

It’s more about being able to continue without strain than aiming for large profits.

That is the image of ‘simple investing’ for me.

Possessions, money, and information.

Keep what is necessary and do not increase things more than needed.

Then, use the extra time and money for things you truly value.

I intend to continue living like that from now on.