More of the same
You can see last year’s NISA progress report here, and the Junior NISA one here. From this year I will combine both into one post.
This is my fourth year using NISA, which means that the investments I bought in year one will come out of the NISA wrapper at the end of 2018. Right now I am planning to just have them moved into my regular broker account.
In today’s post, I will talk about the following points:
- NISA progress 2017
- Junior NISA progress 2017
- Future plans
1. NISA 2017
In last year’s post I talked about lots of mistakes I made with my NISA account. Happily none of them were too damaging, and the account looks like this today:
As you can see, 2015 was my major screw-up year, where I was messing around trying to buy Japanese ‘net-net’ stocks. That didn’t end well and I ended up selling out. 2016 looks great mainly because I bought Apple when it was a lot cheaper than it is now 😉
Let’s take a closer look at 2017:
Basically this year I just bought world stock funds, which is my default option. If I don’t have any better ideas I will buy the market. I figure they will probably do okay going forward.
2. Junior NISA 2017
This was the first year running a Junior NISA account for my granddaughter -we tried to get it running last year, but it took a lot more time than I thought it would due to the requirements to have a parent open the account (my daughter is not particularly great at paperwork etc.).
We finally got it running earlier this year and got various family members to contribute so we could fully fund it (you can put up to 800,000 yen a year into a Junior NISA).
The account currently looks like this:
So the account currently holds 920,294 yen’s worth of mutual funds (junior NISA accounts can only buy Japanese equities and mutual funds) and 10,000 yen’s worth of cash.
I wanted to keep this account extremely simple, as my granddaughter will get control of it when she is twenty, and my daughter might end up managing it if anything happens to me.
It currently only holds one mutual fund, a world equities one. This means the only options are buy more of this or sell some of it 😉
I figure world stocks over the next 15-20 years should do okay. We’re planning to continue funding this as long as we can (the current Junior NISA legislation expires in 2023 but I’m hoping it will be renewed or replaced with something similar).
3. Future Plans
I’m planning to buy some dividend stocks in my NISA account next year. Will start looking for them over the winter break with a view to buying one or two stocks in January. I split my NISA investing in two as I use my bonuses to pay for it, so end up buying half my allowance in January and half in July each year.
If you need some help getting started with NISA you can still get The RetireJapan Guide to NISA for the launch price of 1,000 yen. The latest edition (a couple of updates and a well-needed redesign) will be sent to everyone who bought the guide soon.
How about you? Do you have a NISA account? How are you using it? Anyone planning to go with the Tsumitate NISA next year?
Ben, My J-wife has money in a bank in Japan. Can she open a NISA in Japan if she lives abroad?
Sadly, no. Pretty much the only requirement to open a NISA account is that you be a resident of Japan.
Thanks for sharing. Compared to my Rakuten NISA, you’re doing quite a bit better than I am on overall capital gains but my dividend income is almost double yours this year on only 3 years of investments (I was too late to open my account in 2014. Sigh). My NISA strategy is dividend stocks only (that I will hopefully hold forever), so that I can get the full benefit of the tax savings on income.
That’s great. I suffer from indecision, so I keep changing my strategy. It means nothing works particularly well (I haven’t had the growth I could have, or the dividends, and as for that net-net fiasco… well)
Hopefully I’ll figure things out going forward!
It’s encouraging that you have such a high dividend income though 🙂
TokyoSophia,
Congratulations on your success
Would you care to share some of the dividend stocks you have had good results with so far?
At the moment I have NGG, BP, GSK, DEO and Mizuho (8411). My husband has NGG and Tokyu REIT (8957) and his dividend yield is actually better than mine. From my whole portfolio (including NISA) I am currently making 40,000 yen per month in dividend income. My modest goal is 200,000 per month by retirement in around 20 years time. I think it’s totally doable.
That is impressive! 200,000 a month from dividends, combined with a pension, should make for a relaxed retirement!
One thing that jumps out is those stocks look very UK-centric. Another thing possibly to consider is dividend growth investing (looking for companies that don’t necessarily pay large dividends at the moment, but who are growing their dividend and are likely to continue doing so).
My calculations have my NISA accounts hitting 40,000 a month from dividends in 2024 or so, and 200,000 a month never (or maybe when I am 70 or so) 😉
Across the portfolio as a whole we should get to 2.4m in annual income within the next ten years.
One thing I struggle with is what to do with investments with no yield (like the funds in our iDeCo accounts). I guess we’ll sell them at some point for something that does have a yield, or just convert to cash as we need it. Something to think about in the future!
Ben, you’re right to point out the UK-centric focus of my NISA at the moment and I would never recommend anyone just starting out to copy that allocation. However, in my case, these stocks make up just one part of my overall stock portfolio, which I am trying to keep balanced out between different markets and sectors (I must admit I still have quite a way to go though).
As for dividend growth investing, that is actually my central strategy but I will pick up steady high yielders when they are going cheap. NGG fits the latter criteria for me at the moment but unfortunately I already have too much of that one.
From what I’ve heard from sempai investors, once you seriously start dividend growth investing (and of course reinvesting the dividends) you can often increase your dividend income much more quickly than you first anticipated.
Sounds good to me!
Hi Guys,
I’m looking to open up a NISA account early 2018.
Any one know of any stocks or funds that offer a interest rate that can be compounded annually?
Thanks in advance.
Hi Tomthumb
I’m afraid I don’t really understand the question. Are you talking about reinvesting dividends?
Sorry for my unclear question.
I’m getting ahead of myself!
Please ignore.
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Hi Ben! Thank you for sharing! I learn a lot from your blog.
I’m new to investments and I just opened a NISA account with Rakuten last month. So far I’ve only been investing a small amount to Nikkei 225 and VOO.
I’m sorry about my beginner questions, but I still don’t understand how the dividend actually works. Will I get dividends for each stocks that I have? And when will I get it? I see that the US stocks (including indexes) have the dividend amount information but not the dividend payment date, but the Japanese indexes say that the dividend is 0.00. Does that mean that I can’t get dividends from Japanese indexes?
And how can I find out about a stock’s investing fee?
Thank you!
Hi Andy
Thanks! The best place to ask questions like those is in the RetireJapan forum. If you make an account and copy and past that over the I and the other forum members would be happy to answer them to the best of our collective ability 🙂
https://www.retirejapan.com/forum/
So i have just got a confirmation on my NISA account but I am a little lost as in how to start, how to buy etc. Is there anyone with decent Japanese knowledge to help me get started or to understand the basics?
I opened my account through Rakuten.
Thanks in advacne!