Frequent trading is folly. The strategy of “tax deferral” that you won’t sell until you die

This is an FP1級 expert who operates assets of 150 million yen.

Profit-taking is an act of throwing away the initial capital

Can you face the fact that when you sell stocks, about 20% of the profit is forcibly taxed as taxes? This is not merely a cost. It is the act of cutting and discarding the strongest initial capital that should have grown like a snowball in your wallet due to compound interest.

Think in concrete numbers. Suppose you have a 1,000,000 yen unrealized gain here. If you sell, about 200,000 yen will be seized, and the amount available for reinvestment will drop to 800,000 yen. On the other hand, if you do not sell, you can keep the full 1,000,000 yen in operation.

Have you ever calculated how much asset disparity will be created after 10 or 20 years due to that 200,000 yen difference when it compounds? A person who cannot punch that calculator has no right to build wealth.

Tax deferral is the strongest strategy

The strongest and legal tax strategy available to investors. It is not NISA or iDeCo. It is “not selling.” This is the scheme of “deferring taxation.”

Unrealized gains are not taxed. The state can only tax you the moment you lock in profits. Therefore, it makes sense to postpone that realization and keep even the money you would have paid as tax in operation. Postpone payments to the future and maximize liquidity on hand. This is a standard tactic used in corporate finance as well.

Conclusion

Those who trade frequently are not investors. They are merely “tax payment volunteers” who pay commissions to securities firms and taxes to the government.

If you truly want to build wealth, do not let your emotions drive profit-taking. Resolve to “never sell until death” and exhaust the power of compound interest to the bone.