Steady Saving a Key to Successful Investment.

From a take-home pay of 220,000 yen to a millionaire… The first axis was “saving money and investing in trusts.

It’s been a long time since the term “billionaire” was coined to describe investors who have amassed assets in the hundreds of millions through investment, but the path to success varies widely. Some people make a lot of money by day trading assets that move rapidly, such as forex and virtual currencies (crypto assets), while others steadily accumulate money by combining various investments.

Hajime Inoue, 36, author of “Why I Was Able to Save 100 Million Yen When I Was 33 and Had a Take-Home Pay of 220,000 Yen” (Shinchosha, Inc.), started out with a monthly take-home pay of about 190,000 yen in his first year as a working adult, and 10 years later, when he turned 33, his take-home pay was 220,000 yen. The first thing Mr. Inoue did was to start investing. The first thing Mr. Inoue did was to “accumulate and save.

In 2007, when I started working, I started my investment life by accumulating 100,000 yen a month in investment trusts. From the beginning, I was aiming for over 100 million yen, and I had a vague goal of retiring early, saying, ‘If I can save up 100 million yen, I can earn 4 million yen in profit at an annual rate of 4% and live without working.

However, with a take-home pay of less than 200,000 yen, I could barely afford to accumulate 100,000 yen in investment trusts every month. I was able to save and raise money by shopping at supermarkets and other ways to maintain the standard of living I had when I was a student, even after I entered the workforce. In the midst of such a life, the Lehman Shock occurred. The valuation was low compared to the amount I had accumulated, and I was not without anxiety. I continued to accumulate a total of 8 million yen over the next six years, trying not to let the stock price affect my feelings. The first six years were the most difficult, but I sold all of my investment trusts before the abolition of the special reduced tax rate for securities taxation in 2002. My assets grew to 26 million yen.

In his 20s, his assets reached more than 20 million yen, but the path he took was not smooth. At the end of 2012, Mr. Inoue was involved in an unexpected traffic accident and was injured so badly that it took him two and a half years to return to society.

At the age of 27, oddly enough, I was temporarily in early retirement. So I started day trading to become an investor who does not depend on salary income, but I made almost no profit after about five months. I also tried more than 10 other types of investments such as margin trading, overseas FX, and even affiliate marketing, but all of them failed and I made almost no profit except for the investment trusts I continued to invest in. After two years, all I knew was that I had no investment sense.

What got me out of the tunnel was real estate investment, which I started in 2003. Instead of just earning rental income or selling properties, I lived in a cheap property, renovated it, and sold it at a price higher than the purchase price when I moved out. I made a profit of 6 million yen on my first choice, a 37-year-old, one-bedroom apartment in Shinagawa. The essence of this investment is “saving money” in a sense. The key was how to find inexpensive properties and renovation companies, and it was fun unlike any other investment I had made. I think the secret to my success was that it suited my nature and kept me motivated.

After returning to the workforce, while his company’s take-home pay was still around 220,000 yen, Mr. Inoue’s assets reached 50 to 60 million yen in his early 30s. In 2006, interested in the advent of the cashless era and the blockchain system, he started to invest in a diversified reserve of virtual currencies.

I had no idea which virtual currencies would rise in value, but I knew that the virtual currency market itself would grow. So I bought the top eight virtual currencies by market capitalization in a monthly diversified fund of 200,000 yen, with 100,000 yen going to Bitcoin if it had a 50% share of the total market capitalization, and 50,000 yen if Ethereum had a 25% share. The main focus of my portfolio is investment. The main part of my portfolio was mutual funds, and at that time I was investing 600,000 yen a month in mutual funds. But as it turned out, the surge in virtual currencies in 2008 gave me a big boost, and I achieved 100 million yen in assets in the 14 years since I started investing.

If you are starting from scratch

Mr. Inoue has reached his initial goal of “100 million yen in assets” by combining the mainstay of asset management, investment trusts, with the upswing in real estate investment and virtual currencies. He says that making the first 20 million yen was the most difficult part, but it also gave him a great guideline for investment. If he were to aim for 100 million yen from scratch now, what strategy would he take?

If I were to go from zero to 100 million yen now, what would be my strategy? “As in the past, I would buy global index funds first. Even if the ‘efficiency’ of increasing money is not high, the ‘probability’ of increasing money is high. After I make the first 20 million yen by buying 100,000 yen or 120,000 yen more per month, I will probably start investing in real estate again.

I will keep my savings as small as possible and invest the rest. I don’t want to keep my money in a bank account because it is like letting it sleep. Since investment trusts are diversified investments, there is little risk of a large decline in value, and with the spread of online securities, they can be converted into cash quickly. Also, when we look ahead a decade or so from now, I think we will see new booms like the current virtual currency and US stocks. Keep an eye on them and challenge them from time to time. There is a big difference between having a few million yen and having tens of millions of yen at your disposal.

In fact, just like buying stocks or real estate, saving money is the first step to investing. Successful people say that this was the gateway to achieving 100 million yen, so you never know what the world has in store for you.

From “FRIDAY” February 18, 2022 issue