High-Income Earners in Japan Focused on Investments and Reducing Taxes

The asset management consultancy Famore conducted a recent survey, which asked 1,005 people with an annual income of ¥10 million and above about their investments and financial awareness. The results revealed that approximately 80% of respondents currently had investments. Stocks were the most common type of investment with 62.9% of respondents, followed by investment trusts (47.4%) and foreign currency deposits (17.4%).

When the 210 respondents not currently investing were asked why not, the most common reason they gave, at 44.3%, was because they “don’t know how to.” The next two most popular responses were 40.5% who were “scared about losing money” and 28.1% who were “worried about whether the investment will actually increase,” an indication that many of the people not investing were doing so out of caution.

Concerning their preferred methods of saving money and reducing taxes, at 45.2%, the most popular answer was “using a NISA.” This was followed by 29.1% for “reducing insurance costs” and 27.1% for “using an iDeCo pension plan.” With a NISA, profits from investment are exempt from tax, while the iDeCo private pension plan provides benefits in addition to a public pension, and has the added merits of contributions being fully tax-deductible as well as profits from investment being exempt from tax. This showed that respondents were aiming to gain sound asset management through making good use of the various plans available.

Respondents were also asked how much confidence they had in the representatives at securities companies and banks. The combined percentage of those who said they “have confidence” or have “some amount of confidence” came to 45.1%, equating to less than half.

(Translated from Japanese. Banner photo © Pixta.)