４５歳でアーリーリタイアして資産生活

[RetireJapan]

Thanks a lot for sharing this, Ben. I am now wondering why it seems that you have invested in more US stocks... Don't you have to pay a 30% withholding on dividends from US companies?

I found it easier to find information about US stocks, and the yields were sometimes better. A lot of it was laziness.

Many of these are in NISA accounts, so the tax is 10% (just the US taxes). In an ordinary account it would be 30% (US 10% + Japan 20%) but you can claim the US taxes back taking the rate down to 20% (hasn't been worth my while yet).

[Leafs_Raps]

Thanks a lot for sharing this, Ben. I am now wondering why it seems that you have invested in more US stocks... Don't you have to pay a 30% withholding on dividends from US companies?

I found it easier to find information about US stocks, and the yields were sometimes better. A lot of it was laziness.

Many of these are in NISA accounts, so the tax is 10% (just the US taxes). In an ordinary account it would be 30% (US 10% + Japan 20%) but you can claim the US taxes back taking the rate down to 20% (hasn't been worth my while yet).

Thank you again, Ben. Your last post has made me feel better about my investment choices. Everyone on this board seems to be touting the xMaxis funds... At the end of 2018/beginning of 2019, I invested 2,400,000 yen into VOO (the Vanguard S&P 500 ETF) through my regular NISA account at an average of $229 plus change. I was just following Buffet's advice even though I am not American... I have received some dividends and thought I had lost 30% of them because of the withholding tax. I take it that I did not actually lose the Japan 20% (a good DOH!) and now I am wondering how I should go about claiming the other 10% like you mentioned. Would I just claim it as a tax exemption in the year I receive the dividends? I am sorry for all the questions.

[Leafs_Raps]

If you look for diversification and high yield I would consider S-Reits with lots of information in English online to chose names.

Just if the trade war intensifies then Singapore could be hit so to bear in mind. Yield around 7%.

Finally also to diversify some Asia HY funds actually available in a few currencies. Yield also around 7%.

Interesting, I will look more into this.

[RetireJapan]

Thank you again, Ben. Your last post has made me feel better about my investment choices. Everyone on this board seems to be touting the xMaxis funds... At the end of 2018/beginning of 2019, I invested 2,400,000 yen into VOO (the Vanguard S&P 500 ETF) through my regular NISA account at an average of $229 plus change. I was just following Buffet's advice even though I am not American... I have received some dividends and thought I had lost 30% of them because of the withholding tax. I take it that I did not actually lose the Japan 20% (a good DOH!) and now I am wondering how I should go about claiming the other 10% like you mentioned. Would I just claim it as a tax exemption in the year I receive the dividends? I am sorry for all the questions.

You can only claim the US 10% back against Japanese taxes that you paid (ie outside NISA). This is due to the tax treaty that aims to prevent double taxation.

If you are not paying Japanese taxes you can't claim the 10% US withholding tax back.

[Leafs_Raps]

Thank you again, Ben. Your last post has made me feel better about my investment choices. Everyone on this board seems to be touting the xMaxis funds... At the end of 2018/beginning of 2019, I invested 2,400,000 yen into VOO (the Vanguard S&P 500 ETF) through my regular NISA account at an average of $229 plus change. I was just following Buffet's advice even though I am not American... I have received some dividends and thought I had lost 30% of them because of the withholding tax. I take it that I did not actually lose the Japan 20% (a good DOH!) and now I am wondering how I should go about claiming the other 10% like you mentioned. Would I just claim it as a tax exemption in the year I receive the dividends? I am sorry for all the questions.

You can only claim the US 10% back against Japanese taxes that you paid (ie outside NISA). This is due to the tax treaty that aims to prevent double taxation.

If you are not paying Japanese taxes you can't claim the 10% US withholding tax back.

Perfect. I am paying taxes in Japan so I guess there is a way to claim it when I do my 確定申告 next year then?

[Leafs_Raps]

I am very intrigued by high-yield investments such as in the ４５歳でアーリーリタイアして資産生活 blog and also the way you seem to be investing (to a lesser extent). I would love to eventually live off passive income if possible but absolutely no confidence whatsoever on how to do it.

[TokyoWart]

I am very intrigued by high-yield investments such as in the ４５歳でアーリーリタイアして資産生活 blog and also the way you seem to be investing (to a lesser extent). I would love to eventually live off passive income if possible but absolutely no confidence whatsoever on how to do it.

In most cases yields (the interest or dividends paid by an investment) are a red herring and you should consider the total return from the money paid out plus/minus the capital appreciation or loss. It's actually much better for you to own an investment which pays no dividends but regularly increases in price (capital gains) because you can choose when the best time is to sell, take the capital gains and pay the taxes while for dividends or interest you are forced to pay the taxes each year you receive them whether or not you reinvest or use them for living expenses. That is one reason Warren Buffett has Berkshire Hathaway pay no dividends at all; the elimination of that tax friction helped him create more deca-millionaires among his early investors than would be possible for a dividend paying stock. Chasing yield for an investment which is falling in value each year (which can easily happen for a REIT or high dividend stock like AT&T) is an amateur mistake which seems to characterize what the アーリーリタイア has done.

[TokyoWart]

RetireJapan

I'm almost embarrassed to, as I know that I don't really have good reasons for buying these particular stocks

I might say the same thing if I had the courage or energy to post all my individual stock holdings. I think this is one more reason we benefit from holding broad market index funds which, while they may have years of losses or stagnation, over the longer term bounce back from each downturn and never require an apology.

I recently had to review my wife's portfolio because she is in a position to take some capital gains while in a zero tax bracket for US tax purposes. She's done well in her individual stock positions (all her retirement funds are in S&P 500 index funds) but the gains are concentrated in a tiny number of her stocks. We sold about $35,000 of VISA which she'd bought for $5,000. She has a couple of other outperformers and a numerically larger number of names which have done roughly as well as the indexes as well as some laggards (IBM). I listened to an old Paul Merriman podcast (September 6, 2017) today where he mentioned (or claimed, since I can't find a link that substantiates the claim with data) that 96% of stock underperform the index. My experience is that the longer one holds a portfolio of individual stocks, the more you see outperformance in a tiny minority of the names drive total return.

[RetireJapan]

Perfect. I am paying taxes in Japan so I guess there is a way to claim it when I do my 確定申告 next year then?

No, you can only offset the US tax on dividends against the Japanese tax on dividends. So you can claim it back within a taxable account (reducing your taxes from 30% to 20%) but not in a NISA account.

[RetireJapan]

I think this is one more reason we benefit from holding broad market index funds which, while they may have years of losses or stagnation, over the longer term bounce back from each downturn and never require an apology.

Absolutely. Which is why I tend to recommend cheap, diversified index funds and indeed have the bulk of our investments going into them.

But I haven't quite outgrown the urge to dabble and mess things up