The consumption tax increase to 10% may be only the prologue
Hello, this is Shimo-yama.
Starting from October the 10% consumption tax
may still be just the prologue.
Tax is only just raised
Last month, the IMF (International Monetary Fund)
made a recommendation to gradually raise the consumption tax to 15% by 2030 and to 20% by 2032
.
Naturally, there were voices of criticism in response to that.
“ IMF, leave us alone”
they said.
However, according to Chief Economist Toshiaki Nagahama of Dai-ichi Life Institute,
“ IMF, in fact, staff members are also seconded from Japan’s Ministry of Finance.
Policy recommendations are largely influenced by the wishes of each country’s finance ministries.”
(quoted from TV Asahi News
https://news.tv-asahi.co.jp/news_economy/articles/000170137.html）
So,
there is a possibility that the government's intentions are reflected in that opinion to some extent.
What this means is that the government may be
“planning to raise consumption tax to 20% in the future,”
and they might be gradually laying the groundwork starting now,
as a possibility.
For the government, the goal of tax increases is likely still far ahead.
Even if the consumption tax goes up to 20%,
if the social security system is properly reorganized,
and there is a return to the people, that would be good, but…
it is hard to expect much.
“Pensions won’t be paid as promised”
“Taxes will rise”,
which would only increase the financial burden.
Many people may feel anxious about the future from these talks, but there is only one way to dispel that anxiety.
Increase income and assets.
And, I believe “there is nothing more suitable than investing”
as a method.
Investing = risk, danger
and many people are hesitant.
“In the end, I’d rather not touch investing,
and just be a salaried employee who reliably earns a monthly salary.”
There are still many who think this way.
Indeed, receiving a fixed amount every month provides a strong sense of security.
But, is that enough to provide real peace of mind?
No matter how great a company is, if it stops keeping up with the times,
it can deteriorate in no time.
Especially in this era of rapid change,
the lifespan of businesses is getting shorter and shorter.
For reference, I’ll introduce a ranking.
In Heisei 1 (1989),
about 30 years ago,
the world’s market capitalization ranking.
Actually 30 years ago,
a country’s companies
dominated the world’s market capitalization ranking at the top.
Of the top 10, 8 were companies from that country.
Do you know which country?
Japan.
The current situation is hard to believe, but…
Please look at the ranking.
↓
【Heisei 1 (1989) – World Market Capitalization Ranking】
1: NTT
2: The Nippon Kangyo Bank
3: Sumitomo Bank
4: Fuji Bank
5: Dai-Ichi Kangyo Bank
6: IBM
7: Mitsubishi Bank
8: Exxon
9: Tokyo Electric Power
10: Royal Dutch Shell
(Reference: Diamond Online
https://diamond.jp/articles/-/177641?page=2）
This is not a domestic ranking in Japan.
It is a world ranking by market capitalization.
Japanese companies had 8 in the top 10,
and NTT was by far the top.
Where did that momentum go…
Now, only TOYOTA among Japanese companies ranks near the top in the world.
This ranking shows how cruel the flow of the times can be.
To reiterate, every business has an expiration date.
No matter how delicious a business is,
once its shelf life ends, it declines.
In the past, there was talk that “Amazon will someday go bankrupt.”
That remark from Amazon's CEO Jeff Bezos was
a topic of discussion, but…
even if you work for a company that now seems stable,
this stability may eventually crumble,
and you should always have that resolve.
The security of being an employee is valuable, but
that might be only temporary security and is always looming.
Therefore, to prepare for when that security collapses,
I strongly recommend you start preparing early.
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Investment risks can be controlled.
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“Even if you work for a company you are not necessarily guaranteed peace of mind,
you feel that, but even so investing is dangerous.”
Many people feel this way.
Of course, I won’t say there is no risk in investing.
There is no such thing as earning without taking any risk.
However, you can control the risks in investing.
It is not the investment itself that is risky,
but taking high-risk trades creates risk.
Everything is up to you.
There are ways to accumulate profits steadily while keeping risks low.
Also, in ordinary business, when the economy goes into recession,
it takes a big hit, but
in investing, even in a downturn where stock prices fall in one direction
you can still make profits by selling.
Regardless of the economy, you can keep earning.
Moreover, in investing, once you acquire a skill,
as long as there is a market, you can continue to generate profits.
I do not intend to force my views on you, but
as the year-end approaches is a good time to take a look at one option— investing again.
If you are worried about money or struggling with it,
please reconsider one option: investing.
Thank you for watching until the end today as well.
Keizo Shimo-yama
