Rakuten Point Investing

[TokyoWart]

I have found that even the temporary rakuten points can be used to pay for ふるさと納税. Essentially you can pay taxes with points instead of with "real" money.

[hirami]

It is not a real mutual fund or ETF. It is not a security product.

It seems to be a "fund" of Rakuten points that is tacked to some other index.

My guess: Once you contribute your points, Rakuten says 1 point = 1 yen. Then they invest in another index themselves with real yen. They then adjust their "fake" index to match the real index.

That is why you do not need a stock trading account to participate.

So the Unyo 運用 is a "fake" index.

But in order to do the Toshi 投資 you have to have an account with 楽天証券 which is Rakuten Trust.
Is the Rakuten Trust a mutual fund? Are US citizens allowed to have a 楽天証券 account?

Thank you so much everyone for your replies and advice. The buying points is also really cool!

[Kanto]

It is not a real mutual fund or ETF. It is not a security product.

It seems to be a "fund" of Rakuten points that is tacked to some other index.

My guess: Once you contribute your points, Rakuten says 1 point = 1 yen. Then they invest in another index themselves with real yen. They then adjust their "fake" index to match the real index.

That is why you do not need a stock trading account to participate.

So the Unyo 運用 is a "fake" index.

But in order to do the Toshi 投資 you have to have an account with 楽天証券 which is Rakuten Trust.
Is the Rakuten Trust a mutual fund? Are US citizens allowed to have a 楽天証券 account?

Thank you so much everyone for your replies and advice. The buying points is also really cool!

Yes, the Rakuten trusts are mutual funds. Are you allowed to have them? Yes. But it would not be tax-advantageous at all for an American.

運用 seems like a fun idea, and a way to attract Japanese Point savers who do not want to go through the hassle of setting up a Rakuten account.

Why not try it with a few hundred points and let us know? I am super curious, but I am pretty set with my current point allocations.

[RetireJapan]

But in order to do the Toshi 投資 you have to have an account with 楽天証券 which is Rakuten Trust.
Is the Rakuten Trust a mutual fund? Are US citizens allowed to have a 楽天証券 account?

Rakuten Securities is a broker. As a US citizen you can open an account. Rakuten will not allow you to buy US-listed shares or ETFs (they don't want to deal with the IRS either it seems).

You can buy Japanese mutual funds and ETFs, but you should not for your own sake (IRS again).

You can buy Japanese individual shares.


Most Americans choose to invest in the US instead. It's just less of a headache.

[hirami]

Yes, the Rakuten trusts are mutual funds. Are you allowed to have them? Yes. But it would not be tax-advantageous at all for an American.

運用 seems like a fun idea, and a way to attract Japanese Point savers who do not want to go through the hassle of setting up a Rakuten account.

Why not try it with a few hundred points and let us know? I am super curious, but I am pretty set with my current point allocations.

I invested 100 Points a couple of days ago. No movement yet. There's a big points sale coming up this weekend, starting July 4th. Where if you sign up in advance you can get something like 10-times points.
https://event.rakuten.co.jp/campaign/point-up/marathon/

So after I do a little shopping, I'll put a few hundred more in the account. I'll check back with you guys in a couple of months to let you know how it is going.

As a final question, some people on the forum have been discussing the FEIE and how it won't let you contribute to a Roth IRA in the US. Do you have any articles or sources that might give more information on investing as a lower income US-expat. There is no way I have $10,000 to open a trading account or something.

[TokyoWart]

As a final question, some people on the forum have been discussing the FEIE and how it won't let you contribute to a Roth IRA in the US. Do you have any articles or sources that might give more information on investing as a lower income US-expat. There is no way I have $10,000 to open a trading account or something.

The benefit of a Roth IRA is greater for those in high tax brackets so these work-arounds might not actually be worth pursuing for someone at a lower income but here are several ways an Expat can be eligible to contribute to a Roth IRA:

1. Don't take the FEIE. Instead take the Foreign Tax Credit (FTC). That allows your income to remain counted as "earned" so you are eligible for Roth contributions. However, if you give up the FEIE you cannot easily switch back to it and both Japan and the US have highly progressive tax systems so low income earners are in low tax brackets. That means you have relatively little Japanese taxes to count for the FTC so it could mean you wind up having a greater US tax liability. You can check by trying to calculate your US taxes twice, once using FEIE and once using FTC and seeing which liability is greater. The most common reason lower income US Expats use FTC instead of FEIE is to qualify for the Child Tax Credit but it also enables IRA contributions.

2. Earn more than the FEIE limit. Amounts above the FEIE do count as "earned" and there is no upper income limit on direct Roth contributions if you are not covered by a workplace retirement plan. This depends on what you mean by being a "lower income US expat" so it is perhaps unlikely that this is an option.

3. Spousal IRA. If both you and your spouse are in the US tax system as long as you file jointly and have income above the FEIE limit it can allow direct IRA contributions for either the higher or lower income spouse with a combined total of the amount above the FEIE limit. For instance the 2021 FEIE limit is $108,700. If one spouse earns the equivalent of $20,000 and the other earns the equivalent of $120,700 there is a total of $12,000 ($6,000 each) of IRA eligibility between the two spouses which can be used even though that lower income spouse won't have any "earned income" after taking the FEIE. These income levels might be above what one means by "low income".

4. Develop an earned income source which does not count under FEIE. For instance, if you live 11 months in Japan and 1 month in the US and earned income in the US during that 1 month it is not foreign-sourced and isn't cancelled by FEIE. If you travel to the US on business those days working in the US are backed out of the "foreign income" calculation which you are allowed to claim under FEIE so this could even happen by adding up US business trip time (that income is also taxed as earned in the US but everyone has a $12,550 personal deduction which could cover that amount of income while still allowing it to count as "earned" for purposes of an IRA).

[Yokohama]

I invested 100 Points a couple of days ago. No movement yet. There's a big points sale coming up this weekend, starting July 4th. Where if you sign up in advance you can get something like 10-times points.
https://event.rakuten.co.jp/campaign/point-up/marathon/

So after I do a little shopping, I'll put a few hundred more in the account. I'll check back with you guys in a couple of months to let you know how it is going.

The points you will receive from Rakuten Marathons are mostly limited time points (期間限定ポイント), which I think you cannot use for 楽天ポイント運用 Rakuten Point Unyo (I would love to be corrected though).