"I'll save it someday" won't work! Money won't grow without knowledge [Part 3] (note money featured article)

I have dedicated much of my life to studying medicine. However, I am ashamed to admit that I never once thought about learning about "money." Especially when I was young, I think part of me was relieving work stress by earning a lot and spending it without thinking about the future. Looking back now, I don't feel it was that much stress, but at the time, I thought it was cool.

Such habits are not easily broken, and I lived a life where I would go out drinking whenever invited and take a taxi home in the middle of the night as if it were normal. When large expenses like children's cram school fees were likely to overlap, I would get through it by increasing the number of night shifts. Although I never ran out of money, my savings never increased either. I was living a life that felt like walking a tightrope, yet I had no sense of crisis.

The reality of household finances revealed by the "blank time"

The turning point was the COVID-19 pandemic. During the "blank time" when I couldn't go out drinking and even my work was restricted, I was forced to face my future whether I liked it or not. And so, I finally decided to start "reviewing my household finances," something I had been avoiding for a long time.

At the time, shamefully, I didn't even know there was a way to grow money other than "saving what was left after spending what I earned."

Learning from "Rich Dad" and YouTube

Not knowing where to start studying, I first picked up a book. It was the bestseller "Rich Dad Poor Dad." That was where I first learned the concept of "investing" and was shocked to learn that there is a mechanism to make money work for you.

It was around that time that I discovered "President of Liberal Arts University" on YouTube. What was taught there was a clear step-by-step process: first review fixed costs, then put the saved money into "index investing." In the medical world, we value evidence, and the "long-term, diversified, low-cost" approach of index investing was logical and made a lot of sense to me.

Turning 60,000 yen in drinking money into an investment for the future

From there, I made steady improvements. I consolidated my mobile phone and credit cards with Rakuten, and since the "New NISA" hadn't started yet, I began by utilizing the "Tsumitate NISA" quota.

I decided to split my investments 50/50 between "eMAXIS Slim Worldwide Equity (All Country)" and "S&P 500." At first, I thought, "It's money that would have disappeared on drinks anyway," and started with 60,000 yen per month. After that, I gradually increased it to 80,000 and then 100,000 yen.

I realized that the true benefit of dollar-cost averaging is that as the investment amount grows, you are "educated" to endure the "volatility" of the market. At first, I was anxious even if it dropped by 5,000 yen, but by the time three years had passed, a major change had occurred in my assets.

The thrill of a 1 million yen investment gain and evidence that translates to clinical practice

Three years after I started the monthly contributions, my investment gains exceeded 1 million yen. I still cannot forget the thrill of seeing my assets grow through something other than my own labor. By this time, my mobile phone bill was covered by points, and my monthly investment profit averaged about 40,000 yen. The realization that "my daily lunch money is effectively free" gave me more confidence than anything else.

I also incorporated a portfolio strategy I learned from the YouTube channel "Nasubi's Money Course," and developed the discipline to keep the ratio of cash, stocks, and bonds constant.

Furthermore, knowing the fact from historical data that "there is a 95% probability of a positive return if you hold the S&P 500 for 15 years or more" was a great support.

As doctors, we convey the success rates and survival rates of treatments to patients based on the results of clinical trials every day, and we proceed with treatment only after they are convinced. However, for a single patient, the chance to try that treatment is only "once."

On the other hand, dollar-cost averaging investment is proven to have a 95% probability of not falling below the principal over 15 years, diversifying risk across 180 opportunities, even if there is a market crash during that time.

Isn't it unnatural for me to not believe in this "data of 95% diversified over 180 times" myself, while explaining to patients that they should bet on the possibility of a treatment that only happens "once"?

When I reached this conclusion, "medicine" and "investing" were connected in my mind by a single thread of evidence. Even starting at 50, I could logically believe that with 240 opportunities for diversification over the 20 years until I am 70, my assets would almost certainly not end up in the negative. In this way, by accumulating knowledge about money and gaining experience over time, my assets began to grow steadily. Furthermore, what I learned in the process of asset formation was that many of the ways of thinking about investment and accepting risk can be applied directly to life. I learned that in order to get a large return in life, you have to take risks and allocate your time to valuable things, but that appropriate risk control is important. Also, by reducing my anxiety about future life, I have become able to make more proactive choices. I see many articles saying that people who started monthly investment changed their lives, and I truly believe that is the case.

The looming giant wall of "private medical school"

In today's world, healthy life expectancy is increasing, and it is becoming common for doctors, who hold the special qualification of a medical license, to work until they are over 70. In fact, among the senior doctors who have retired from university hospitals, there are some tough individuals who continue to work even after turning 80.

"If I keep working until I'm 70 and continue to save little by little, won't I be able to secure enough funds for my retirement?"

It was just when that hope began to appear. However, at the same time, it was decided that one of my two sons would spend a year as a ronin to aim for medical school.

What if he ends up attending a private medical school after the entrance exam a year from now...?

At that time, I still hadn't imagined it. I had not yet realized the true height of the "giant wall" that is private medical school tuition, which cannot be overcome by the steady progress of index investing alone.