Savings, retirement, investments

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Zasso Nouka
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Re: Savings, retirement, investments

Post by Zasso Nouka » Fri Nov 17, 2017 12:46 pm

Well it's time to start planning for the future and retirement and we've been thinking to start a stock portfolio off that we can add to from time to time so that when we do come to retire we're not going to be brassic and I have a few newbie questions for the more experienced investors amongst us. I should perhaps clarify that we'll be using a Japanese broker, most likely Ian's recommendation, Monex as they have low charges, smartphone apps and a good interface. We don't have an issue paying tax on whatever earnings we get from the stock so aren't trying to hide money from the tax office.

1) If I buy stocks through a broker do I own them outright or does the broker own them on my behalf ? Say plans change and we move abroad can I sell those stocks using another broker outside of Japan our would I have to sell them first, transfer the money abroad and re-buy through another broker in whatever country we end up in ?

2) In the UK we had an ISA and that paid a dividend every six months which could either be reinvested in more units or taken as a payout, do ordinary stocks do this or do you only get a payout when you sell them ?

3) At what point do you pay tax on stocks ? Is it yearly or do you only pay tax when you sell them ?

Having read through Paradoxbox's excellent advice previously in the thread we've decided to mainly go with US companies and are thinking of mostly choosing things like Google, Coca-cola, Johnson & Johnson, Tesla, Berkshire Hathaway, Apple with maybe a sprinkling of more adventurous companies once we get the hang of stock trading, does anyone see any major flaws with that plan or would it likely provide a safe but slow growing form of retirement plan ?

No doubt further questions will arise as we look into this in great depth.

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Re: Savings, retirement, investments

Post by paradoxbox » Fri Jan 12, 2018 12:09 pm

Just a little bump for this thread.

A year ago I said the dow would be at 22k by summer.

We're now in Jan 2018 and the dow is at 25k. If you'd invested in the dow you'd have made serious bucks this past year.

Even the nikkei was up which is a real change from the last 30 years.

Get into stocks this year if you haven't already.

Stocks are going to crash but probably not for a little while. We are into bubble territory these days but it still has steam. If you've read up on Peter Lynch's books, sell at the appropriate time when you think the bubble is primed to burst or is already deflating. I think we still have a year or two of growth left before the slowdown starts. Looking forward to that time as I'm going to buy everything that moves.

Otherwise if you want to be like Buffet, just HOLD and keep buying regularly, perhaps at lower quantities than if the stocks were cheap.

@ZN RE: Taxes on stocks, in the US you only pay capital gains taxes when you sell the stocks (And a few other scenarios which are more complicated). I am not sure about the UK or Japan but I imagine that it is similar.

Your idea of just reinvesting dividends back into stocks is perfect and is what Lynch & Buffett and all the other rich guys do.

I am still fairly young (Early 30's) so I do not own a lot of stocks which pay out major dividends, big dividend stocks are unlikely to increase their value in a reasonable timeframe unless they're major cyclical stocks which have giant swings following economy dips and rises. But if you're over 40-50 they may be an OK thing. They just probably won't increase very much while you own them.

@ZN Again, your idea of investing in many stable companies is a good idea, but I think you're young enough that you should also consider putting a larger portion of your money into slightly more risky companies. Coca Cola is a great company but its days of explosive growth are probably done, it's not likely you're going to get 10x growth on that in a few years. On the other hand, if you take the same money and spread it around into 10 other good looking but more risky stocks, the chance is quite high that one of them will grow rapidly. Even if the other 9 don't do very well, the one shooting star will make up for it. This is Peter Lynch's advice to younger investors.

Cheers

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Re: Savings, retirement, investments

Post by Zasso Nouka » Sun Jan 14, 2018 9:06 pm

Thanks Paradoxbox but I'm not as young as I'd like to think, approaching mid fifties here. I try not to think about it too much but what can you do.

I'm still trying to get my head around choosing your own stocks (previously with owning an ISA in the UK you had a fund manager taking care of that for you and obviously that being their full time job they were good at it) so my thought with choosing some stocks that pay a dividend is that it might provide some income that could be reinvested to buy further stocks that were more growth orientated. Does that sound like a reasonable plan to you or would you advise buying growth stocks at this stage and then shifting over to dividend paying stocks in later life ?

Obviously still got a lot to learn and have started following RetireJapan.info, Mr Money Mustache and various investment blogs and sites but it's a lot to take in. It's not uninteresting and always enjoy learning about new things but there is so much to learn.

I've changed my mind about buying Tesla stock, still really like what Elon Musk is doing and do think he wants to make a difference but it seems like the well established car companies aren't going to ignore electric cars forever and once they do switch their production over to EV's that could hit Tesla hard.

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