“Stocks are scary.” The result of talking about investing with a 54-year-old salesman for the first time in half a year.
“Since you do stocks, you must have plenty of money, right?”
The other day, I was told this by Mr. W, a salesman from a client company.
“100,000 yen is a piece of cake for you, right!”
No, no, that’s not the case at all (laughs).
Even for me, 100,000 yen is a large sum of money.
So, the conversation went like this.
“If that’s the case, why don’t you invest too, Mr. W? Even if it’s not individual stocks, there’s a way to accumulate investment trusts through NISA.”
However, the answer that came back was,
“No, stocks are scary. I don’t want them to go down.”
Huh? I feel like I’ve had this conversation before…
Hello, this is Long-term Investor @VOO.
Actually, this Mr. W has appeared in my note before.
It’s an article published on April 2nd of this year titled “The day I talked about investing with a 54-year-old salesman and learned the reality.”
It’s been about half a year since then.
Yesterday, I talked about investing with Mr. W again.
Today is the sequel to that.
He was saying “stocks are scary” half a year ago too
When I talked to Mr. W in April, I heard this.
Mr. W’s company has a mandatory retirement age of 60. He can work until 65 through re-employment, but his salary will be reduced.
On the other hand, he mentioned that among those who retired at 60, there were some who invested in stocks and had asset income as well.
So, I asked Mr. W about NISA and iDeCo.
He told me that although he contributes 5,000 yen to iDeCo every month, he keeps it in a fixed-rate deposit.
The reason is that he doesn’t want to lose any money.
I explained index investing to him as well, but…
“Even so, there’s still a chance you could lose money, right?”
Indeed, he is right.
There are no guarantees in investing.
In the end, our meeting started, and the conversation ended there.
At the end of the article, I wrote this:
“If I have another chance to meet Mr. W, I think I’ll try talking a little more about investing.”
And then, half a year later.
I actually ended up continuing the conversation (laughs).
“I’m already 54, after all.”
This time, too, Mr. W’s mindset hadn’t changed.
“Stocks are scary. I don’t want them to go down.”
So I said,
“But you can still continue contributing for over 10 more years, right?”
I told him.
Mr. W is 54 years old.
Even if he contributes until he is 65, he still has 11 years.
If it’s 30,000 yen every month, the principal alone would be 3.96 million yen.
Of course, depending on the investment results, there is a possibility that the principal could decrease.
Even so, I don’t think it’s too late to start building assets just because you’re 54.
However,
“I’m already 54.”
No, no, you’re only 54, aren’t you? (laughs)
I’m 49 myself. I’ll be 50 soon.
I think it’s a waste to give up on starting something now just because of your age.
So, I suggested that if stocks are scary, why not at least hold some dollars in addition to yen?
If prices rise, the amount you can buy with the same 1 million yen will decrease.
If the yen continues to weaken, it will also affect the prices of imported goods.
If you keep it in cash, your account balance might not decrease.
But that doesn’t mean the value of the money won’t change.
Of course, there is also exchange rate risk in holding dollars.
I tried talking about that too, but,
“I’m fine with just yen!”
Once he said that much, I figured, oh well. (laughs)
I stopped pushing it any further.
“I’ll be waiting for you to regret it when the market crashes.”
At the end of the conversation, Mr. W said something interesting.
“I expect you to say that the stock market crashed and that you wish you hadn’t invested in the first place.”
I see (laughs).
So that’s how you see it.
But I didn’t get angry.
Rather, I thought that your way of thinking is quite different from mine.
For Mr. W, a stock market crash is an event that makes him think he shouldn’t have invested.
But for me, it’s different.
If you intend to continue long-term investing, a sharp drop in stock prices also means you can buy at a lower price than before.
Of course, I’m not happy that my assets have decreased significantly.
But I will continue my monthly contributions.
And if I have spare funds, I will consider additional investments.
That said, I don’t have a large amount of money set aside for a crash.
I will judge based on my financial situation at that time.
I’ll probably just buy a little more from my small allowance (laughs).
Even so, it’s better than doing nothing.
I don’t want to regret having had the opportunity to buy and doing nothing.
Of course, there is a possibility that stock prices will fall further after I make an additional investment.
After all, I don’t know where the bottom is.
Even so, I want to act within a range that I can accept.
Even though we both say we “don’t want to regret it”
Looking back on this conversation, I noticed something interesting.
Perhaps Mr. W and I are actually thinking about the same thing.
I don’t want to have regrets.
Mr. W doesn’t want to regret losing money by investing.
I don’t want to regret having done nothing when I had the time and opportunity to invest.
Even though we both “don’t want to have regrets,” the actions we choose are complete opposites.
Some people feel scared that stock prices might drop by 30%, while others feel anxious about holding only cash while prices are rising.
Both risks actually exist.
However, what people feel is scary differs from person to person.
I felt that once again during this conversation with Mr. W.
My own thinking has changed a little since six months ago.
When I wrote the article in April, I wanted Mr. W to know more about investing.
That there is a method called index investing.
That there is a tax-free system called NISA.
That there is an option to build assets over the long term.
If he knew that, wouldn’t his way of thinking change?
That was how I felt.
But this time, half a year later,
Mr. W’s thinking had not changed.
And I did not push him any further.
It’s not that I was angry.
It’s just that whether or not to invest is something for the person themselves to decide.
At that moment, I thought to myself.
Isn’t recommending investing and teaching financial literacy two different things?
Understand the risks of stocks.
Understand the risks of cash as well.
Based on that, make a choice that fits your own life and values.
Just as there is the freedom to invest, there is also the freedom not to invest.
People with high financial literacy are not necessarily always investing.
What is important is being able to choose for yourself after knowing the facts.
That is how I have come to think about it.
Let’s talk about money more normally.
I talked about investing with Mr. W for the first time in half a year, but in the end, our ways of thinking remained parallel.
But I think that is fine.
Mr. W will continue to hold only yen.
I will continue long-term investing.
We should both just choose the method we are comfortable with.
However, I do wish that these kinds of money conversations could happen more normally.
It’s not that people who invest are superior, nor that people who don’t invest are wrong.
“Let’s talk about money more normally.”
And,
“I want to increase the number of people who can make their own choices with full knowledge.”
Through this conversation, I felt that once again.
By the way, if the stock market really crashed and Mr. W said to me,
“See, I told you it was better not to invest!”
I would probably answer like this.
I would probably answer like this.
“No, no, this is a chance to invest more! (laughs)”
Of course, that is assuming I have spare funds at the time.
You cannot judge the success of an investment based on a single market crash.
How about you?
Losing money by investing, or letting time pass without investing.
Which one makes you feel more anxious?
*This article summarizes personal experiences and thoughts and does not recommend the purchase of any specific financial product. Investing carries the risk of loss of principal.
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