New NISA《Monthly Investment Limit》 《Growth Investment Limit》 for “30s and 40s” and “50s”…How to use each of them

In your fifties, your salary income is at its highest. We want to save money at all costs.”

The “New NISA” was launched in ’24 with a major upgrade.

First of all, the system itself has been made permanent, so there is no longer an investment deadline and new investments can be made at any time. The tax exemption period is now indefinite, and tax on investment income is exempted for the lifetime of the investment.

The annual investment limit was changed from “nasate” to “tsumitate” and tripled from ¥400,000 to ¥1,200,000 per year. The General NISA was renamed the “Growth Investment Limit,” and the annual investment limit was doubled from 1.2 million yen to 2.4 million yen.

In addition, the new NISA will allow both investment limits to be used together, so that a total of 3.6 million yen can be invested per year. However, the new NISA does not allow a lifetime investment of 3.6 million yen per year, but a lifetime investment limit of 18 million yen per person is set.

The “reserve investment limit” alone can be used for 18 million yen, while the “growth investment limit” alone can be used up to 12 million yen.

In addition, under the new NISA, if you sell a product and have room in your lifetime investment limit, you can reuse that limit for investment.

As for investment products, the “reserve investment limit” can be used for investment trusts and ETFs (Exchange Traded Funds) that meet the requirements set by the Japanese government, just as in the case of the “Temporary Investment Limit”. At the time of this writing, there are approximately 270 products in the lineup.

The “Growth Investment Limit” is basically the same as the General NISA, but excludes “stocks under liquidation or supervision,” “investment trusts with trust periods of less than 20 years,” “highly leveraged investment trusts,” and “investment trusts that pay out monthly distributions.

All of these products are deemed unsuitable for long-term asset building and are excluded. At the time of this writing, there are approximately 1,800 mutual funds in the “growth investment lineup.

Let us now consider how to use the New NISA’s “Advance Investment Limit” and “Growth Investment Limit” for people in their 30s, 40s, and 50s, respectively.

Four Principles of the New NISA for All Generations

First, we would like to share with you the 4 principles of the New NISA that are common to all generations.

◇1_Practice “long-term, accumulation, diversified” investment and “low cost

You cannot get returns without risk. However, as long as there is risk, there is a possibility of losing money. To deal with this risk and increase your money steadily, it is important to engage in long-term, accumulated, and diversified investments.

The Financial Services Agency’s “Let’s Start! NISA Quick Reference Guidebook” by the Financial Services Agency shows the annual rate of return on savings investments made since 1989 with the same amount of money in domestic and foreign stocks and bonds each month.

The distribution of investment rates of return shows that they vary over a holding period of 5 years. It is also clear that there are periods when the principal amount is underperforming. On the other hand, for a 20-year holding period, there have been no cases of loss of principal since 1989, and the rate of return has ranged between 2% and 8% per year.

We can see that in order to reduce the risk of loss of principal as much as possible, it seems necessary to continue accumulation and diversification for 20 years or more. In other words, 20 years is one standard for “long-term.

It is also important to keep the cost of investment low. In particular, choose products with low “trust fees,” which are charged while holding mutual funds.