There’s an issue, in Japan, with certain high income families being unable to save money. Here’s the story of a Japanese household of four, living in the Tokyo Bay area, in a high-end tower apartment, repaying multiple loans and having unnecessary spending. Every month the household was using up their entire revenue and they couldn’t pay the tuition for their daughters’ private school and high schools. That’s when bitcoin came into their lives.
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“How can we overcome paying our daughters’ schools and the family’s big expenses?” the family asks Mitsuaki Yokoyama, a financial planner. “I started investing in crypto with 100,000 yen around the end of November last year, then the price rose by 2.5 times in just a month. So I got all excited and I invested 1 million yen more, but the price crashed so badly this year, and when I finally woke up from my daydream, I found out I had lost half of all my important savings,” Masao Ikeuchi, a 42-year old company employee living in Tokyo said. With his spouse, Naoko, (a pseudonym), 42, he went to consult a financial planner. As the couple heard a husband’s colleague saying there was a way to make money very easily, they decided to jump into bitcoin. They had a great start, but soon made losses to the point of no return. “What the hell on earth happened?” the couple questioned.
The Ikeuchi family lives in a high-rise tower apartment in the Tokyo Bay area with their two daughters, one attending a second grade junior high school, the other a fifth grade elementary school, and with two cats. They enjoy the wealthy life of the so-called “Tawaman tribe”, an abbreviation for “tower mansion” used to refer to people in Japan who purchase newly built properties, mostly 3LDK (3 rooms plus a dining room-kitchen area) at about 60 million yen ($550,000).
Their take-home monthly salary is about 420,000 yen ($3,800) for the husband, about 310,000 yen ($2,800) for the wife – a total of about 730,000 yen ($6,600). In Japan, the family is considered as a privileged high-income household.
The couple earns a 15 million yen ($135,000) annual income, but they can’t pay their daughters’ tuition fees. They bought their flat eight years ago using most of their savings as a down payment of 10 million yen ($90,000), and they had been spending a lot monthly – about 710,000 yen ($6,400), so they could save only about 17,000 yen a month ($153). As of last autumn, their savings amounted to only 2.4 million yen ($21,500) and they started to get worried that they couldn’t pay their children’s school tuitions. What they needed was a way to make money somehow easily.
Bitcoin, “Easy Money”
This is why the couple sought to increase their money by making “easy investments” so they could acquire an average amount of over 1 million yen ($9,000) per year to pay the school fees and tuitions. What made Mister Ikeuchi decide to invest in bitcoin was a colleague at work who told him, “You should try Bitcoin, personally, my investment increased by 1.5 times.”
The attraction of easy money persuaded Masao Ikeuchi to read a bunch of books on cryptocurrency and understand the basics, before he purchased 100,000 yen ($900) worth of bitcoin for the first time, just for a try. He did very well at first, the 100,000 yen ($900) worth of bitcoin that he bought by the end of November 2017 rising to 260,000 yen ($2,350) in just one month. Mister Ikeuchi got so excited he purchased bitcoins for another 1 million yen ($9,000). However, the price fell to a third during the crash this year. The family man panicked and repeatedly failed to recover the losses. He even picked up on FX or individual stocks and by the time he understood what was going on he realized that the 1.1 million yen ($9,900) he had invested into bitcoin had decreased to 300,000 yen ($2,700).
He FOMO-ed
Mister Ikeuchi was caught by fear of missing out (FOMO) and the desire to get rich quickly. Due to prolonged low interest rates, deposits did not increase his savings. Moreover, the media constantly reports on success stories of investors who earned big money with bitcoin or FX. It was understandable that people like Mister Ikeuchi wished to try it for themselves.
“Investments rarely work if you jump into a nice story. If it worked for the first time, it’s often just the beginner’s luck. As far as I know, most things do not last for long,” Mitsuaki Yokoyama, the financial planner told President Online. Mr. Ikeuchi jumped to investment and failed to accumulate more than he had invested. The first thing to do in order to increase your savings is to review all living expenses, the experts says. “Regarding investments, people shouldn’t avoid making any. After reducing household expenditures, people should consider a long-term investment with small risks,” he finished.
Mr. Ikeuchi seems to have misunderstood how to make good use of his money. However, due to this failure, he should be primely positioned to improve his investment strategies, enabling him to invest more intelligently next time.
What do you think of investors who FOMO into cryptocurrency with the desire to get rich quick? Let us know in the comments section below.
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The post How a Tokyo FOMO Family Invested in Bitcoin and Lost appeared first on Bitcoin News.
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