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Adam
https://president.jp/articles/-/82006
Consider the source. However, someone who cannot accept risk should not be investing.ap21 wrote: ↑Sat May 25, 2024 11:32 pm Read an article (at the bottom; Japanese) recently saying that with the current rise in mortgage interest rates, it's a big risk for most households with mortgages to invest in NISA; rather they should be using that money to repay the mortgage and do any saving in government bonds. Thoughts? I'm probably taking out a mortgage later this year, would be very grateful for any opinions![]()
Adam
https://president.jp/articles/-/82006
松岡 賢治
Financial planner/money writer
Born in 1963. Graduated from the Faculty of Law, Tokyo Metropolitan University in 1989. After working in the research department of a securities company, he went independent in 1996 and obtained a financial planner qualification in 1997. He writes articles on credit cards, asset management, investment, etc. His books include " Robo-advisor Investment Textbook for the First Year " (SB Creative) and " Easy to understand with plenty of illustrations! A book that will definitely benefit you with cashless payment " (Sotec Publishing). AllAbout Guide.
If you are worried about interest rates rising the absolute last thing you should be doing is investing in JGBs whose value falls as interest rates rise.ap21 wrote: ↑Sat May 25, 2024 11:32 pm Read an article (at the bottom; Japanese) recently saying that with the current rise in mortgage interest rates, it's a big risk for most households with mortgages to invest in NISA; rather they should be using that money to repay the mortgage and do any saving in government bonds. Thoughts? I'm probably taking out a mortgage later this year, would be very grateful for any opinions![]()
Adam
https://president.jp/articles/-/82006
Thanks! Quite agree about ensuring you have an affordable mortgage first; the writer thinks that any rise of variable rate mortage rates to 0.7% or higher makes prioritising repayment crucial, but as you say, I don't quite see the logic of that considering the likely returns on investments - unless you're stretching your finances to bursting and counting on NISA to help you make your repayments in an emergency? That does indeed sound like a bad idea! Other than that, unless you have a solid kosei nenkin coming (I don't), the idea of not putting anything in e.g. iDeCo puts me in far more of a cold sweat than anything the writer mentions. Again, thanks for the opinion and for resharing the video.RetireJapan wrote: ↑Sun May 26, 2024 12:17 am Really don't agree with this, at least for people who have a reasonable margin of safety with their mortgage payments. If any increase in your payments would put your finances in danger, you have an unaffordable mortgage![]()
How high are rates likely to go? From 0.29% (current lowest floating rate mortgage I have seen) to... 1%? 2%? more?
Long-term return from investing is likely to be more that that, and all the reasons from this video still apply: https://youtu.be/EedWDRcqBVI?si=yosdA0E3ejj2jHEb
Thanks! The plan (as such) is simply to stick to a mortgage that doesn't charge us more per month than we pay on rent now (we're (1) in Tokyo and (2) upsizing so unfortunately the chances of paying much less than now are slim to none). To be honest until I saw this article I hadn't given much thought to what to do with NISA after taking out the mortgage, I suppose I guessed I would see how much we had left over after making pension payments and maxing out iDeCo. If I'm not sure I could afford to keep doing that, then as Ben says, I'm looking at a mortgage I shouldn't be looking atsutebayashi wrote: ↑Sun May 26, 2024 12:58 am So what’s your plan? Could you afford to see the investment portfolio go down 50% and still be able to keep servicing a variable-rate mortgage?
Yep, can't argue with that! All you can do is minimize it.Tsumitate Wrestler wrote: ↑Sun May 26, 2024 3:10 am
Consider the source. However, someone who cannot accept risk should not be investing.
https://finvest.jp/
松岡 賢治
Financial planner/money writer
Born in 1963. Graduated from the Faculty of Law, Tokyo Metropolitan University in 1989. After working in the research department of a securities company, he went independent in 1996 and obtained a financial planner qualification in 1997. He writes articles on credit cards, asset management, investment, etc. His books include " Robo-advisor Investment Textbook for the First Year " (SB Creative) and " Easy to understand with plenty of illustrations! A book that will definitely benefit you with cashless payment " (Sotec Publishing). AllAbout Guide.