RetireJapan

HI Folks

I'm looking to help my retired mother in-law invest 30mil yen so that she'll have income. I'm looking for high yielding dividends at the same time something that can at least hold it's value and of course best if it increases in value. Instead of picking my own basket of stocks as I really don't know much on jp companies, I figured an ETF would be the way to go. Anyone have any recommendations on any of the below high yielding ETFs? Just looking at the numbers, 2564 seems to have the highest net return at 3.35%. I'm taking the yield and subtracting the management fee to get this. BTW, I not really sure if this is the proper way to get the approximate return.

seijaibow wrote: ↑Sun Jun 12, 2022 4:50 am HI Folks

I'm looking to help my retired mother in-law invest 30mil yen so that she'll have income. I'm looking for high yielding dividends at the same time something that can at least hold it's value and of course best if it increases in value. Instead of picking my own basket of stocks as I really don't know much on jp companies, I figured an ETF would be the way to go. Anyone have any recommendations on any of the below high yielding ETFs? Just looking at the numbers, 2564 seems to have the highest net return at 3.35%. I'm taking the yield and subtracting the management fee to get this. BTW, I not really sure if this is the proper way to get the approximate return.

As you are taking charge of someone else`s finances, I really recommend more caution. Choosing an ETF based solely on dividend yield is not a recommended strategy. Concentrating all that risk only with Japanese firms is again, not recommended.

Where is her account? With Rakuten you can set your account to sell a % of a fund each month/year to create an income stream. https://www.rakuten-sec.co.jp/web/rfund ... kyaku.html

I would recommend The Emaxis Series
All Country (Exposure to the entire world)
Developed Country (Exposure to the Developed world)
S&P500 (Exposure to US large Cap stocks)

Retired people will rightly have less appetite for risk than those still earning.
In Japan, where many people do not have experience with investing and regard it as gambling, that is even more the case.
So as Haystack says, tread carefully.

You are looking for a risk-free investment that returns 3% or more. Sadly, I don't think it exists.

A sensible think to do would be to keep several years' worth of necessary spending money in cash, and then invest the rest in a broad equity fund.
However, I would not fancy convincing an older Japanese person with no experience of investing to start this strategy now.

Of course, her age is a consideration too. If she is 65, taking a risk and investing some of the money is advised. If 85, perhaps not...?

Thanks for the advice @haystack and @beanhead.

I would like to give some more context.

My mother in-law is 65, recently widowed and quite healthy. She inherited stock of a company her father used to work at worth about 50 mil, and it's getting an annual dividend of 3+%. She has an additional 20 mil that is a combination of (60%) shintaku global index funds and (40%)cash. She is also getting pension payments from the government. I'm not sure how much this is, I will need to find out. A guesstimate would be around 100K a month as she's a getting the part from her late husband as well who paid into the system all his working life. The 30 mil in cash I was looking to invest will be coming from the apartment she is currently living in. We will plan to sell that as she wants to move to Tokyo closer to us so she can see her grandkids more often. So, my plan is to purchase a 2LDK apartment in Tokyo within walking distance to where we live.. I will try to get a jutaku loan out in my name which she will be living in and responsible for paying the mortgage payments for the time she lives there. I figure that mortgage payments are cheaper than renting. And if I can take out a loan then she wouldn't need to move around a big lump sum of money to buy a place out right. She'd have more money in the bank in case she needs to move to a nursing home in the future.

The place we are looking to purchase is around 55Mil. if I put 10% down and get a loan for the rest, the mortgage payments will be around 140K per month. And I'm guessing her monthly expenditures on food, necessities, splurges will be around 150k per month. So, I was originally looking for a way for her to get 300K in income per month. And I thought the way to get that would be the combination of 3+% dividends from current company stock, gov pension payments, and dividend from the new 30 mil investment I was planning to make.

Having more thoughts into it, it seems like she is already well invested and the 30 mil may better be left as cash or at least the majority as cash. And that would give her around 10 years of spending before she needs to touch the existing investments. And maybe for her existing investments, rebalance some to have more global exposure (ie..exmaxis all country).

You may want to consider consulting a registered financial planner. Lots of moving parts.

50 million in a single company represents some serious concentration risk.

.

Haystack wrote: ↑Mon Jun 13, 2022 3:00 am You may want to consider consulting a registered financial planner. Lots of moving parts.

50 million in a single company represents some serious concentration risk.

True about the concentration risk. But, that individual stock has increased 3 fold in the past 10 years and has provided healthy dividend income. I tend think that if it's not broken then don't fix it.

seijaibow wrote: ↑Tue Jun 14, 2022 12:55 am

Haystack wrote: ↑Mon Jun 13, 2022 3:00 am You may want to consider consulting a registered financial planner. Lots of moving parts.

50 million in a single company represents some serious concentration risk.

True about the concentration risk. But, that individual stock has increased 3 fold in the past 10 years and has provided healthy dividend income. I tend think that if it's not broken then don't fix it.

Maybe something to think about and just posting for comparison. MSCI All Country World Index is up 3.2 fold over the past 10 years, and the S&P500 up 4.6 fold, yen-based figures not including dividends.

The 10 year average dividend yields for MSCI ACWI and S&P500 are slightly lower than 3+% though, they're around the 1.5-2% mark.

Again, I am just posting for comparison, not recommending anything.

I will double down on my suggestion for a financial planner.

Once the accumulation phase has ended, one should start to diversify away from risk.

That is far too much risk for a 65 year old. Recent currency fluctuations have show the danger of too much Japanese concentration as well.

#1 place to start is a clear accounting of all assets including insurance.
#2 All debts and obligations, from tax to mortgage, to gists. #3 Her plans and goals
#4 Her appetite for risk.

Only then can you make a plan for someone else.

“…The place we are looking to purchase is around 55Mil...” You could buy a cheaper place, like a ‘used house’, or an Akiya and renovate it.

Invest in REITs. These companies are required by law to disburse substantial dividends.