A few days ago, I sent a LINE message to my two daughters.
Here is the original message as below,
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Hi girls,
This is kind of sudden, but why don’t you start asset management?
Asset management is a long-term process that will produce results in 10 to 20 years with compounding effects. If you run your own company like me, you would use the money to run it and try to make as much profit as possible so don’t choose the style of investing a certain amount of money each month. However, as an employee of a firm like you, accumulating a certain amount of money every month is the safest way to invest and you can expect high amount in the future.
As it happens, the world’s stocks plummeted recently. There may be more declines tomorrow. By investing each month, which is to buy when the market rises or falls, you’ll get profits. To put it simply, you can buy more shares when the market falls and make a bigger profit when it rises again. Why don’t you start investing? Dad will be half-supportive. For example, if Y(elder daughter) invests 50,000 yen every month, dad will also invest 50,000 yen. You can invest using 100,000 yen. Since A(younger daughter) is still a student, dad will support with the half amount of Y, in this case, 25,000 yen. In the future, when A gets a job and start earning your own salary, you can decide how much you want to invest. Same as Y, Dad will support you with half of that amount.
But there is one rule.
You have to place the order by yourself on a certain day every month. If you forget or fail to do so, I will stop supporting you with the money.
In the beginning, dad will decide on the stocks and teach you how to place orders, but once you get used to and learn it, and want to decide on your own, I’ll hand over to you.
What do you think?
Dad
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In Japan, the gift tax exempted up to 1.1 million yen/person per year is tax-free.
If you continue this for years, it may be effective as an inheritance measure.
The following is a reference comment from my accountant which is just a case of mine.
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Hi Mac,
It is from that perspective that it is better to sign the document.
The law does not require a written document.
Legally, it is possible to make a gift without a written document (oral gift contract) (Article 550 of the Civil Code). However, it is difficult to prove that the gift was made(The fact itself, amount and the date of given). Well, the amount and date of the gift can be objectively recorded by bank transfer.
There are people who use an elaborate method to pay a small amount of gift tax and give a tax return by donating an amount slightly more than 1.1 million yen. This is done with the intention of using the tax return as evidence that the gift was made. However, this may have the negative effect of attracting tax officer’s attention.
In the case of gifts of up to 1.1 million yen, it may not be necessary to prepare a contract, although this is a personal judgment. (For gifts of up to 1.1 million yen, you may not need to draw up a contract.)
Best regards,
Your Accountant
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Please consult with your own tax accountant before making a decision.
By sharing my method, I hope you will also come up with a great investment idea!
Masahiko Kumada
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