This week, I celebrated my 6th year in the work force and 31st on this planet. Regular readers would know that reaching milestones tend to make me reflect on the journey so far and what I could have done better. Last year, I shared a personal story about saving $100k by 30 and I thought I’ll continue this tradition.
I decided to go educational this time with the story of a relative of mine (who henceforth will be known as Nick) and his relationship with money. He was one of the motivating factors for me to start this blog, so in a way, this is an origin story of sorts.
The following profile is based on real people and real events. Any semblance to other real people are coincidental / intended for comic relief / intended to hide my relative’s identity.
Status: Single with no children
Education Level: Bachelors
Occupation: Professional career
Nick has done relatively well in life, having graduated with a degree in a respectable area that pays relatively well. He earns enough to be taxed at the highest bracket in his chosen country of residence.
Given these fundamentals, one would expect him to be living very comfortably without a financial care in the world. That is however, not the case.
Nick's dark side
Unbeknownst to the world, Nick hates his job. It is highly stressful and challenging. It also involves long hours of work plus study to keep up with his professional development.
As such, the harder he worked, the more he needed an avenue to de-stress. This he found in his almost fanatical love of anime and video/mobile games. It is through this love that he pours his heart and soul (and significant money) into to de-stress and find meaning in life.
Chief among all the anime and video games, the [email protected] game was Nick’s favourite. Now, unless you are into this niche genre of anime / games (I believe most Singaporeans aren’t), you would be scratching your head right now. Even I don’t fully understand every aspect of it, but here’s my personal interpretation.
When I say game, what I really mean is an ecosystem. It started as a game in 2005, it has since spun off a whole host of other media (CDs, Concerts, Anime, other merchandise, etc). Collectively, they engage fans
and milk them dry of their cash.
About the game
I would fundamentally describe [email protected] the game as a traditional music/rhythm game like Guitar Hero with RPG and card collecting elements. The premise is you are a producer looking to assemble and train a team of singers (called idols) to compete against other players’ teams live.
This assembly and training aspect is where the RPG / card collecting element comes in, where you acquire better idols and train them up. The live battles are where the rhythm game element comes into play.
Nick would essentially play this game whenever he has free time.
How to waste your money
There are 3 main ways that Nick engages with this ecosystem that costs a serious amount of money:
- Acquiring, leveling and customising idols
- Attending live events
- Buying merchandise
Acquiring, leveling and customising idols
As is typical of many mobile games, especially Japanese ones, there are Pay to Win / Gambling elements to this game. You can play the game free, but you will not get good idols that will enable you to win against others or get high scores.
So how do you get those OP idols? You buy digital loot boxes with real currency for a chance to get what you want.
You read right. A freaking chance.
Super Super Rare stuff have 3% drop rates according to this site. Jesus.
As such, Nick would purchase loot boxes and prayed to RNGesus until he got what he wanted. The end result was credit card statements that looked like this:
Attending live events
To Nick, attending the live concerts held in Japan is like going to church to be cleansed. As such, he would organise weekend getaways where he flies out Friday evening, attends the concert and returns on Monday. He does this almost monthly.
Getting tickets to the event is also tricky. The concert organisers could have easily set up a website to do direct sales of the concerts. But no, they had to introduce a gambling aspect to it as well. I’ll let this reddit post describe the process.
Nick obviously had to attend and wasn’t going to let RNG get in the way of that. As such, Nick bought boxes and boxes of CDs just for the codes to get a chance to buy tickets.
Between flights, accommodation, CDs/concert tickets and other expenses while in Japan, that’s a crap ton of money.
There is an ensemble of merch associated with [email protected] From posters to dolls, from standees to (my personal favourite) light sticks pictured above, Nick wanted them all. This leads to many purchases on websites like Amazon JP and other niche hobby sites.
When things were coming to a head, Nick asked his family for a loan to clear his outstanding credit card debt. It was at this point I was invited to do an audit on his finances.
After going through about his 2017 bank and credit card statements, what I found was appalling.
While all this spending seem over the top to peasants like me, Nick was able to tread water for a long time due to his high salary. However, he was charging all his expenses in advance of his pay cheque and his credit card debt slowly built up due to a lack of control and awareness.
Unfortunately, to this day, as far as I can tell, Nick is still living this lifestyle, although maybe without building up debt to do it.
Some Key Lessons
There are some key lessons to this story:
- Savings is more important than earnings – You may have a high income but if you save nothing or worse, go into debt, you are better off having a low income and saving something. Just ask Nick or Nicolas Cage.
- Landing a good paying job may not be right for you – If you find yourself drained and having to spend excessive amounts of money to de-stress or make yourself happy in your free time, maybe you should reconsider taking the job.
- Treat your credit card like cash – People have a tendency to swipe the credit card and deal with the consequences later. You should instead consider whether you can afford the purchase in cash before charging it to your card.
- Beware of free to play games – Those pesky in-app purchases will get you in the end.
How this story has influenced me
In closing, Nick’s story has left a lasting impact on me. Other than hardening my resolve to live frugally, it was while auditing Nick’s finances I felt the urge to start this blog to share about personal finance and investing. In my mind, I saw it as a way for me to communicate and educate him. Unfortunately, I have utterly failed in my mission thus far.
Hope everyone found this case study useful. Do share with me if you know somebody like that and if you have any strategies to counsel them.
Happy birthday and work anniversary to me.