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Can ¥30 Million Stock Assets Make Your Life Easy?
Dr. CamelI heard that you are investing in stocks. Are you on an emotional roller coaster?
UgandhinNo, I don’t. I don’t care about the stock prices after the failure of the Employee Stock Ownership Plan.
¥30 million (approx. $260,000) assets are one of the goals for investing in stocks.
If you build a portfolio of ¥30 million with an average dividend yield of 4%, you’ll get ¥1.2 million per year. This means that you’ll get ¥100,000 per month as a passive income (it doesn’t contain any taxes.)
If you live alone, you can afford almost all living expenses by the passive income. If you have a family, you can use it for paying monthly fixed costs such as mortgage and utility charges.
Even though building a portfolio of ¥30 million is so hard, it’s worth the time and effort.
Verification of the Certainty by Actual Results
However, we have a concern about whether 4% of dividend yield is practical value or not.
To prove the hypothesis, I would like to verify it based on my portfolio.
These are my performance.
| Items | SPYD | HDV |
|---|---|---|
| ETF Name | SPDR Portfolio S&P 500 High Dividend ETF | iShares Core High Dividend ETF |
| Fund Distribution Yield | 3.93% | 3.38% |
| Investment Amount (Except unrealized gain) | ¥3,990,000 | ¥3,690,000 |
| Latest Dividend (After-tax) | ¥120,099 | ¥103,689 |
| Net Yield (After-tax) | 3.01% | 2.81% |
Based on the actual net yield, the results of the investment is as follows if ¥15 million is invested in each ETF:
| Items | SPYD | HDV |
|---|---|---|
| Investment Amount | ¥15,000,000 | ¥15,000,000 |
| Expected Annual Dividend | ¥451,500 | ¥421,500 |
| Expected Monthly Dividend | ¥37,000 | ¥35,000 |
Even though it is a rough calculation, the total monthly dividend is ¥72,000 after paying tax.
For the result of ¥72,000 monthly dividend from ¥30 million investment, everyone has their own opinion for it as a lot or a little.
I think it’s a lot at least.
Because it is so hard to increase monthly salary by ¥72,000. Taking into consideration income tax, you need to work overtime for more than 24 hours if your wage is ¥3,000 per hour.
However, the dividend income will be paid permanently if you build the assets.
By the way, dividends by international ETFs like HDV & SPYD be taxed by both federal tax and Japanese income tax which are around 30% in total if you live in Japan.
As a result, the dividend of ¥1.2 million by ¥30 million assets is achievable. The dividend is before paying taxes though.
This calculation excludes the growth and increase of dividends of the ETFs. The basic dividend is referred to as the yield when I bought them.
If you guess that the world economy would grow little by little, the ETFs are expected to grow and increase their dividend. Thus, ¥100,000 dividend will be paid after paying the tax in the future.
It depends on you to be able to keep buying and holding the ETFs until then.
A Journey of a Thousand Miles Begins with a Single Step
It’s a long journey to increase stock assets to ¥30 million except for the emergency fund which is living expenses for 6-12 months.
Even so, it is worth it when you can achieve it.
It’s up to you whether you give up now or you believe you can make it.
Nobody knows you can achieve it.
I believe I can make it, so I will keep doing it for the goal.
If you can dream it, you can do it.
Walt Disney
Thank you very much for reading.
Have a lovely evening!!
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