Simple Q&A - NISA

[RetireJapan]

Is it best to space out the 400,000 or do people do big lump buys?

For tsumitate NISA you must make a regular monthly payment. You can game the system by setting the monthly payment to 100 yen, then lump suming the rest via bonus payment or top up, but I'm not sure it is worth the hassle.

I will be changing to tsumitate NISA for my wife and I next year (we did ordinary NISA up till now) and I'm just going to set it to 33,333 a month and forget about it

[John_conner]

Hi

Many thanks

I’m a complete newbie so forgive me if this is a stupid question

Let’s say the s&p 500 maxi is 18000 and I buy 400,000 does it go to the nearest 18,000?

[RetireJapan]

In a tsumitate NISA account you can only buy mutual funds. You can buy those to the nearest yen, you don't need to buy them in full lots. So if you want to invest 500 yen a month in the fund, you can, regardless of its unit price.

[zeroshiki]

Hi

Many thanks

I’m a complete newbie so forgive me if this is a stupid question

Let’s say the s&p 500 maxi is 18000 and I buy 400,000 does it go to the nearest 18,000?

No, its very confusing and tripped me up the first time too. They sell funds based on yen amounts and not by lots (the price displayed is in terms of 10,000 units a lot but this is useless info). Think of the price as just a barometer for *WHEN* you bought in versus what the price is *NOW*

If you buy 100 yen of a fund valued at 18,000 yen, lets say after 10 years its now valued at 36,000 yen, your share of the fund is now worth 200 yen.

[John_conner]

It's not a lump payment. Just adds to your monthly payment. So if you're regular payment was 1,000 x 12 months, your 増額 maximum would be 388,000 / remaining number of months.

It's only really useful if you weren't able to max some monthly payments during the year - then you can use it to catch up.

Ah, I see. I guess I misunderstood how it works. Makes sense you can't game the whole tsumitate part of it. Thanks for clearing that up!

But you can go with a bonus payment. Set up the minimum payment of 100 yen per month for each security you want to invest in, then setup a bonus payment for the next month that equals 400k - (100 * #securities * #remaining months).

Hi I was going to buy 400,000 this month as I just signed up. So I can’t do taht? Could you explain? Sorry I do t understand about the bonus lump? Many thanks

[zeroshiki]

Hi I was going to buy 400,000 this month as I just signed up. So I can’t do taht? Could you explain? Sorry I do t understand about the bonus lump? Many thanks

So with Tsumitate NISA, the key is in the word "tsumitate" which means piling on, adding. So it requires you to put in a set amount each month. What they're recommending is the "bonus" feature of tsumitate where you're allowed to add any amount (upto 400k) in a one time "bonus" to your tsumitate. The idea is you have a monthly salary and you contribute to this tsumitate account for, say, 30k a month. However, there are bonus months when you have more money so you'd want to put a little more into your account.

So the recommendation is, set your tsumitate to 100 yen a month (minimum allowed monthly amount). That's from September to December so total 4 months so 400 yen, then set your "bonus" to be paid out in September as well to be 399,600 yen. This satisfies the tsumitate requirement while also allowing you to put your money in immediately.

The same strategy could be done next year as well except you put in 400k - number of months left * 100

[John_conner]

Hi,

Is ity best to put the full 400,00 into eMAXIS Slim 米国株式(S&P500)? And then anything else I have to spend over which will change month to month buy other funds?
thanks

[zeroshiki]

Hi,

Is ity best to put the full 400,00 into eMAXIS Slim 米国株式(S&P500)? And then anything else I have to spend over which will change month to month buy other funds?
thanks

The choice of the fund is up to you. S&P500 is only for the US market so if you want your investment to be the US market then its a good choice.
As for whether to dump everything at once, the answer is almost always yes because none of us can see the future so the earlier you get your money into the market, the better.

Alot of investing is psychological so its up to you to determine your own risk tolerance.

[John_conner]

Hi

I can definitely afford the 400,000 a year for the tsumite. But some months I will
Have more, should I get a regular NISA even if I can’t max out the 1.2 mill?

Also I opened tsumite but haven’t invested yet is it possible to change to regular if that is better?

Thanks

[RetireJapan]

Hi

I can definitely afford the 400,000 a year for the tsumite. But some months I will
Have more, should I get a regular NISA even if I can’t max out the 1.2 mill?

Also I opened tsumite but haven’t invested yet is it possible to change to regular if that is better?

Thanks

I think for most people tsumitate + invest any extra money in a taxable account is going to be the easiest/best option for the long term.

You cannot change your NISA for this year, but in a month or so will have the option to change your 2022 NISA (if you don't do anything they will automatically open another tsumitate for you with the same provider).