RetireJapan

Hello,

I gained a lot of knowledge from the users on this forum, and finally pulled the triggers on the family's NISA investments last year. Feels good!

So, to cut-to:

My father passed-away a few months ago and I am expecting an inheritance. I'd be grateful for suggestions on how to invest this. We are not in need of any of the inheritance funds, so I wish to invest most (if not all) of the lump-sum.

To give some details:

• Wife and I have NISAs, which we have already max'd-out. We are thinking of setting some of the inheritance aside to max-out yearly, for a few years (eMaxis All-Country)
• Kids also have Junior NISAs which are also already max'd-out (eMaxis All-Country)
• We haven't set up iDeco yet, but will soon. We can contribute to this without any of the inheritance
• I have an account at Monex

It would be great to have the inheritance grow, so that the kids could have a decent amount later, and the wife and I could have some extra for our retirement. Since our NISAs are all tapped-out with All-Country, I was thinking that maybe we could put most of the inheritance into a taxable account and invest in All-Country for the inheritance, as well. I really like that eMaxis Slim All-Country handles the tax stuff automagically, and I don't really have to do anything.

I was also thinking that I could have a portion of the amount in a safe All-Country investment, and part of it in a more volatile investment. I'm not married to eMSAC, although it might seem so with how we are investing our NISAs. In terms of investment, I have read that mutual funds are the way to go in Japan.

I'd appreciate any thoughts to further my research.

Thank you!

Are you aware of the New NISA starting next year? Annual allowance will go up to 3.6m per adult, with no limit on the tax-free duration. There is a total contribution limit of 18m yen, which will be reached in five years if you pay in the maximum each year.

I would focus on maxing that out, and perhaps investing remaining funds in a taxable account.

Condolences.

Where are you from?

How long have you been in Japan?

Is the Inheritance in Japan, or overseas?

Will you be the only heir in Japan, or will the kids also inherit?

If the inheritance is overseas, do you plan to bring it all to Japan?

I would consider real estate if I had money like this coming in which I didn't really need.
It would provide some additional diversification.
BUT, having someone trustworthy to manage the property, rent payments etc. would be required.

RetireJapan wrote: ↑Fri Feb 24, 2023 11:28 am Are you aware of the New NISA starting next year? Annual allowance will go up to 3.6m per adult, with no limit on the tax-free duration. There is a total contribution limit of 18m yen, which will be reached in five years if you pay in the maximum each year.

I would focus on maxing that out, and perhaps investing remaining funds in a taxable account.

Ah, that's a great idea to try to reach the 18m yen maximum. Would be good to max that out as early as possible. I will see how we can work that with the inheritance.

Speaking of 2024 NISA, I actually just had a meeting at MUFJ about my kids' NISA and they gave me a paper describing the changes coming next year. From what I gather (and my Japanese is pretty poor), the per-year maximum for adults is 2.4m, as it says on the paper... again, my Japanese is pretty bad, so I could be wrong, or maybe different banks offer different NISA maximums?

The red, square boxes have the juicy info (I think). Check the photos below!

Tkydon wrote: ↑Fri Feb 24, 2023 11:30 am Condolences.

Where are you from?

How long have you been in Japan?

Is the Inheritance in Japan, or overseas?

Will you be the only heir in Japan, or will the kids also inherit?

If the inheritance is overseas, do you plan to bring it all to Japan?

Thanks for the condolences.

I am from Canada, been in Japan for about 15 years. The inheritance is in Canada -- I have to pay Japanese inheritance tax on it . The kids are not in the inheritance. I am planning on bringing most of the inheritance, if not all, to Japan.

beanhead wrote: ↑Fri Feb 24, 2023 11:52 am I would consider real estate if I had money like this coming in which I didn't really need.
It would provide some additional diversification.
BUT, having someone trustworthy to manage the property, rent payments etc. would be required.

I was considering real estate investment, as well. But I'm a bit iff-y about it... maybe I am looking at real estate investment incorrectly. I am considering the initial down-payment, the depreciating value of the unit/home (I don't think values will appreciate much, most likely will stay steady), the number of years needed to pay-off the mortgage before seeing any of the rental income come into my pocket, etc.

Should I look at it differently? Maybe I am missing several things about real estate investment... it just seems like a lot of initial capital to put down before realizing any gains, especially with the real estate valuations being as they are in Japan. Back in Canada, you could pretty much bank on the fact that your property will gain in value considerably over the years. But that may be a bubble that will burst soon... I am just cautious about putting a lot of money down on real estate, when I could put the same money down on a mutual fund, and realize gains from that pretty much right away.

All that said, I am still open to be convinced of real estate investment!

cocacola wrote: ↑Fri Feb 24, 2023 12:06 pm the per-year maximum for adults is 2.4m

With the New NISA, you get both the tsumitate portion (1.2m) and the 'growth' portion (2.4m) each year

RetireJapan wrote: ↑Fri Feb 24, 2023 12:36 pm

cocacola wrote: ↑Fri Feb 24, 2023 12:06 pm the per-year maximum for adults is 2.4m

With the New NISA, you get both the tsumitate portion (1.2m) and the 'growth' portion (2.4m) each year

Ah, okay! Makes sense! That actually sounds very good, if one could afford such allotments.

Oh, also, the lady at MUFJ said that the eMaxis Slim All-World fund will not be available for Tsumitate NISA in 2024. She was disappointed in that, too, but she showed another similar all-country fund that is available for t-Nisa. I believe that the fees for this fund are slightly higher than the eMSAC, and not sure of the history or performance.

I think she gave me a paper for this, too... will see if I can dig it up.

Edit: just found it. See photo below. Also did a double-check with the whaff and she said that there is actually no global fund available for t-Nisa. The purple funds (eMaxisににてる) are similar to the eMaxis line, but the fees are higher, and again, no complete global exposure.

beanhead wrote: ↑Fri Feb 24, 2023 11:52 am I would consider real estate if I had money like this coming in which I didn't really need.
It would provide some additional diversification.
BUT, having someone trustworthy to manage the property, rent payments etc. would be required.

To me, buying some kind of property seems like rather a concentration of a lot of money in a single asset class.

I did think about property investment in the past too, but those management hassles were one reason I thought otherwise.

Now I have REIT mutual funds (eMAXIS) as about 5-6% of my portfolio, and so feel like I have that base covered.

To cocacola, I would suggest you consider opening an account with other than MUFJ.

For the kids, investing in global equities seems like a good idea. Over a span of 10 years or more, such an investment is highly likely to be profitable.

For yourself, mutual funds are fine and I use them myself for accumulating. But if you are wanting to supplement your income, then you could consider some dividend / distribution paying investments too. A book about ETFs I am reading now has a suggestion of a 60/40 equites / bonds portfolio, made up of the VYM etf + BND etf.

This is just an idea, to throw something else out there