Opening An Investing Account

An investing account is just like a bank account except you can choose what to invest your money in.

You can invest your money in stocks, mutual funds, bonds, reits, currency and many other types of investments.

While there may many different types of investments, I believe the best investment for long term return of 12% p are mutual funds.

Individual stocks may be tempting but remember as fast as they go up they may come down.

Bonds barely return above inflation rates and REITS have not been proven to return consistently long return as they are tied to the housing market.

In Japan any interested earned on your investments will be taxed at 20% when you sell the investment.
The money you put in is not taxed, but he growth on the account is.

In example 1 in “What Is Investing?” the invested money was $48,000 and the interest earned was about $1 million.
This would be taxable when it is withdrawn at 20%.
Your account either does this for you, or you can do it yourself on your end of year tax return.

Remember you don’t have to pay tax unless you sell the investment and it has increased.
So don’t be afraid of the tax, but of course we will try to avoid it if possible.

You can start by opening an investing account.
I recommend SBI Investing as they are the largest online broker and offer the largest range of mutual funds domestic and foreign.
This is what I use.
https://www.sbisec.co.jp/

Rakuten is also another major player and there are also more traditional investment firms such as Nomura where you can open an account in person.
Banks also offer investment accounts but I do not recommend them as they usually have limited options for funds to choose from.

If you like to have personal advice it might be better to choose someone like Nomura who you can sit down and talk with although this would be in Japanese.

Opening An Account
You can start by hitting the big red button “Open Account” and go through the process.
You may need some help if you cannot understand Japanese but it is basically asking for your Name, Address and other details and uploading your Residence Card and My Number.
Once they have confirmed your details you are ready to use you account.

You can also select to open a NISA account and regular SBI Bank Account at the same time if you wish.
The NISA account requires extra paperwork to be sent to your house and takes a few weeks to be finalized.
The bank account is not needed unless you would like to use it

Depositing Money
Once you have logged into you account you can see the current balance 0.
You can deposit money by clicking the 入金 button.
If your bank is listed you can click the logo and log in online and transfer money to your investment account instantly.
Another option is to transfer money to the account using standard bank transfer (this takes an hour or so to show).

Buying Mutual Funds
Click the 投信 button to see a list of all available mutual funds.
This can be a little overwhelming at first but stick with it.
If you click the power search button it will show you the current popular funds.
On the left you can sort the funds by fund type, location etc.
For example I can choose Japanese stock mutual funds and it shows me the popular funds.
Clicking each fund gives you more information about that fund.
-Small / Medium / Large companies.
-Any commission to buy
-The goal of the fund.
Once you have decided what fund you would like to buy you can click the red “buy” button.
There you can enter the amount and choose the “normal account” or “nisa account” option.
You can also choose whether to receive any dividends to reinvest them into the account.
Then enter your password and click “order”.
Your money will be invested into that fund at that days price.
Each day usually closes at 3PM so if you invest after that it will be the next days price.
Mutual funds prices are only updated once a day so it is less tempting to buy and sell in the middle of a day like stocks.

Managing Your Portfolio
You can click the portfolio button to see your how your funds are going.
It will show you the fund name, the current price, the return from the previous day and the total return so far.
If you would like to buy from this page you can click the 買付 button.

Selling Mutual Funds
If you would like to sell a mutual fund, go to the portfolio and click the 売却 button.
You can choose which account to sell from (if you own the same fund in both general and NISA accounts).
You can also choose how much to sell, or to sell it all.
Enter you password and in 2 working days the money will appear in your account on the home page.
You can then click the 出金 button to transfer the money to your bank account.