Church Asset Management　(Japanese)

Overview

Up until now, the church has kept its savings in cash. However, considering the recent inflation trend in Japanese society, we are considering using a securities account for investment to prevent depreciation of value.
Amount and Investment Period
We plan to invest 50,000 yen per month for 10 years, accumulating a total principal of 6,000,000 yen.
If there is no specific use after 10 years, we may continue investing or stop deposits while keeping the investment running.

Investment Target

The plan is to invest in index funds linked to stock market indices, primarily focusing on U.S. stocks.

Candidates:

S&P 500 (Index tracking the top 500 U.S. companies)
FANG+ (Investment in 10 major big-tech companies)
All-Country Index (Investment in global stocks, primarily U.S. stocks)
Nikkei 225 (Index tracking Japan's top 225 companies)
Nifty 50 Index (Investment in India's top 50 companies)

The Stock Market Is on an Upward Trend

Historically, stock prices have been consistently rising in the long run. Unless the world comes to an end, investing in the stock market is considered a reliable option.
However, there are two major risks:

Stock price declines or company bankruptcies due to poor business performance.
The challenge of determining the right timing for investment. Poor timing can lead to lower returns or losses.

The solution to these risks lies in combining index investing and dollar-cost averaging (DCA), as introduced below.

Index Investment (Investing in Stock Market Indices)

This involves investing evenly across all stocks within a specific index. If some stocks decline, others will rise, averaging out the overall performance. Since stock markets generally trend upwards, this strategy ensures long-term growth.

Dollar-Cost Averaging (DCA)

This strategy involves investing a fixed amount every month without trying to time the market. By spreading investments over 120 installments (once per month for 10 years), we can reduce the risk associated with market fluctuations.
With this method, market conditions do not affect decision-making. Whether the stock market crashes or surges, we continue investing consistently. This means there is no need to watch the news or check stock prices.
Although the monthly investment amount remains constant, the quantity of financial products purchased will vary depending on exchange rates and stock prices at the time of purchase.

Welcoming Market Declines in Index Investing

Since we invest a fixed amount monthly, a stock market decline means buying at lower prices, which benefits long-term investors.
Many people associate falling stock prices with losses, but in reality, it presents a great opportunity.
Note: The only concern is if the market crashes right when we plan to withdraw in 10 years. However, since we are not obligated to withdraw at a fixed date, statistics suggest the probability of losses is minimal.

How to Invest

We will purchase investment trusts that bundle multiple indices together.
Purchases can start from as little as 100 yen per unit.
By setting up automated investments, we can leave the system to operate unattended for 10 years, as long as there is money in the designated withdrawal account.

Expected Returns

Considering exchange rate fluctuations and other factors, we expect an average annual return of 5%.

If we invest a total of 6,000,000 yen over 10 years, the expected profit is approximately 1,750,000 yen.
After a tax deduction of approximately 21%, the net profit will be around 1,380,000 yen.

However, given the recent strong stock market performance:
For example, if we invest in an S&P 500 index fund:

The average annual return over the past 10 years has been 16.3%.
Investing 6,000,000 yen would yield a profit of approximately 8,120,000 yen.
After a 21% tax deduction, the net profit would be around 6,410,000 yen.

Profit Calculation Tool

We used the following website to calculate investment returns:
https://keisan.casio.jp/exec/system/1254841870

Investment Account Management

Since SCG does not have legal corporate status, the church cannot directly manage these assets. Instead, management will be distributed among church members, primarily staff.
Since NISA accounts offer tax-free benefits only for individuals, we will use regular taxable accounts instead.

Securities Company

To separate church assets from personal investments, members who already invest should open a separate securities account.
The most popular securities firms are Rakuten Securities and SBI Securities. However, to keep these accounts available for personal investments, we will use the less popular Monex Securities instead.
Note: If someone prefers Rakuten or SBI Securities to earn points, that is their personal choice. However, they must maintain a clear separation between personal and church investments.

Member Selection

Eligible members will be core staff and key church members.

Must be 65 years old or younger to ensure continuity over 10 years.
Preferably married couples, so that account management can be handled jointly if necessary.
Both spouses should open accounts.

Investment Distribution Per Person

This depends on the number of participants.

To minimize individual burden, we aim for broad distribution with at least 10 members, ideally 20.

Number of Participants

Monthly Contribution Per Person

Principal Amount in 10 Years
10

5,000 yen

600,000 yen
20

2,500 yen

300,000 yen

Tracking Investment Allocation

All participants will invest in the same assets at the same time, allowing everyone to track how the investments are managed.

Tax Payments

Capital gains from stock sales are taxed separately from regular income, so they will not increase individual resident taxes or social insurance costs.
By selecting a "tax-withholding special account" (源泉徴収あり特定口座), all tax calculations and payments will be handled automatically, eliminating tax-related concerns.

How to Open a Securities Account

Visit the following page: Monex Securities
https://open.monex.co.jp/open/servlet/ITS/account/AcOpenInfo2

Required Documents

.1) Driver’s license
.2）My Number card or notification letter

Steps

.1) Follow the instructions on the securities company's website.
.2) The fastest way is via smartphone (mail applications take about two weeks).
.3) Choose "tax-withholding special account" (源泉徴収あり特定口座).
.4) Do not apply for a NISA account.
.5) Specify a bank account for deposits and withdrawals (Japan Post Bank or major banks like Mizuho are convenient).
.6) Ensure the registered bank account has the same name as the securities account.

Additional Recommendations

Using online banking for the registered account allows free deposits and easier fund management.
Adjust the online banking transfer limit if necessary.

This document outlines the strategy for managing the church's financial assets effectively while mitigating risks and maximizing returns.

（インデックス投資について）Study site: about index investment

Index Funds For Beginners — The Best Stock Market Investment

積み立て投資（ドルコスト平均法）について　Study site: about Accumulation investment

Dollar Cost Averaging in The Stock Market To Maximize Profits