In addition to fraud, high-risk investments are also one of the reasons why many middle-aged and elderly people lose their wealth overnight. Japanese media reported that a retired banker originally had a generous pension, but in just six months, due to investment failures, almost all of his pension that he had worked hard for a lifetime was lost.
According to the Japanese media “THE GOLD ONLINE”, a retired banker Tanaka (pseudonym) who had served in a local bank for 38 years originally had a pension of 25 million yen (about NT$5.2 million). He was a cautious banker who understood that money is not easy to come by and the trap of high-risk investments. He cherished this pension very much. Unexpectedly, fate changed his life trajectory at a class reunion.
At a class reunion one month after Tanaka retired, Suzuki (pseudonym), a classmate who ran a construction company, boasted that he had made a lot of money from investments because of the depreciation of the yen, and could even buy a new car. Tanaka had worked in a bank for many years, and should have been wary of such “getting rich overnight” stories, but seeing Suzuki’s high-spirited look, Tanaka jealously thought “as long as I am willing to do it, I can do it too”, so he transferred 10 million yen (about NT$2 million) of his retirement fund into a securities account and began to try high-risk investment credit trading. In Tanaka’s first week of trading, he unexpectedly made 200,000 yen. This “newbie gift” strengthened his confidence, and he even started to play foreign exchange trading with extremely high leverage multiples.
Tanaka soon ushered in a nightmare. An overseas economic indicator was released, which caused a violent fluctuation in the foreign exchange market, and his book losses expanded rapidly. Although his 38 years of professional habits immediately reminded him of the importance of “stop loss”, the self-deceiving idea of ”wait and see, it should go up again” paralyzed his judgment.
Tanaka’s losses continued to grow, and he also received a “margin call” notice from the securities company. If he had calmly stopped losses at this time, he might have been able to keep most of his assets; but he was already in panic at this time, and he kept adding funds. In the end, the “flattening strategy” made the investment gap bigger and bigger; after the forced liquidation, his original 25 million yen retirement fund was reduced to only 3.5 million yen (about NT$700,000) in just half a year, and his life savings were almost burned.
According to a report by the “Financial Council of Japan”, currently one in every four people will invest their retirement funds, and half of them will use 10%-30% of their retirement funds for this purpose. Tanaka invested most of his retirement funds in high-risk investment transactions, which was obviously “excessive”.
Tanaka’s case highlights the potential risks of using retirement funds. The Financial Council of Japan also warned that if retirement funds are huge, if they are to be used for investment, it is best to have sufficient financial knowledge and establish a clear use policy. In the current inflationary environment, simple savings are indeed risky, and appropriate investment is a necessary need. However, Tanaka’s tragedy once again reminds all retirees that no matter what investment method they choose, having sufficient knowledge and discipline is absolutely the first condition for investing, so as to avoid losing a lifetime of savings due to momentary impulse and wrong judgment.
