I was once invited to invest in a group called KZ1. It sounded interesting but in the end, I declined.
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From what I was told, it was about investing in a company that would be bringing health and IT products to market. I could choose a product to invest in which required putting down a lump sum of a bit less than 200,000 yen, and then paying a monthly deposit of about 17,000 yen from March of 2019 to October of 2020. Then, from October 2020, I would start to receive a percentage of the profits that ‘my’ product was earning. If I recall correctly, I would have to continue making payments in order to continue receiving payments.
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An initially attractive part about this ‘system’ was that a number of experts in modern media marketing would be taking the products to market. The numbers I was shown about potential growth and profits were amazing, to the point of being tantalizing.
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So tantalizing that I started doing calculations in my head about all the money I’d be making.
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There was no way it couldn’t make money – cutting edge products, super cool designs, sophisticated descriptions.
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You name it. It was there glittering in the sun. Investing in this was going to make me rich.
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Catching myself mentally drooling was the red flag.
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If it sounds too good to be true…
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There were no promises, but it all came across as if it were going to happen. And so I put the brakes on and decided I would not make any decisions at that moment. I needed a little perspective and a little unbiased information so I said I would make my decision later.
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Why? Because I was starting to think it was a sure thing.
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In life and investing, there are no guarantees.
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There are no guarantees that you will make a profit on your initial investment so in the end, I decided not to sign up.
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Why I Didn’t Invest in that System
- I didn’t feel there was enough information readily available about the company, other than that put out by promoters. Everything I could find on them, including the informational meeting materials was too slick. It was all image. There wasn’t a sense of reality to it, just dream making.
- I couldn’t control either my profits or my losses. The former is a concern, but the latter is a major concern. I was looking at an initial investment of close to 200,000 yen and then 17,000 yen of monthly investments for 19 months, roughly 500,000 yen. It was an all or nothing type of deal. Make nothing or something. That’s not the kind of investing I want to do. I want to be able to cut my losses quick, not let them run.
- Paying out from March 2018 to October 2019 meant I would not begin receiving profits until 19 months after my initial payment. That’s a huge time lag. One I wasn’t interested in experiencing.
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Why I Invest in Stocks
It turns out, the reverse of my reasons for not signing up explain exactly what I like about investing in stocks.
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I like investing in stocks because I can get a ton of information about companies and investing strategies online to help me make a well thought out decision.
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I like investing in stocks because I can determine how much I want to invest in a company by choosing stocks that are in my budget or by choosing how many shares of a stock to buy. When it comes to losses, I can generally determine quite accurately the price at which I want to sell a stock if I am losing money on it.
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I like investing in stocks because I can take profits on a stock investment pretty much any time I want. That is, if price goes in my direction. That means I can be earning money the same day I purchase a stock. There is no need to wait.
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In reflection, knowing who I am as a trader and what I look for in trading will help me limit my risk. Sure, I don’t know what the offer to invest in KZ1 would have returned, perhaps a lot. However, being selective will keep me out of bad trades. In this case, though others may differ, I judged KZ1 to be a bad investment.