The main purpose of investing in stocks and NFTs is to earn capital gains from price increases. But to be honest, predicting prices is difficult, and no one can predict them.
In that case, it's a good idea to enjoy investing by focusing on "benefits"!
Nakagawa: With the start of the new NISA, the enthusiasm for stock investment has risen to new heights. I also want to take this opportunity to get serious about investing in stocks, but to be honest, I have no idea which ones to buy.
Kishi: This is a problem that beginners tend to fall into.
Nakagawa: To be honest, even after researching a lot, I still don't know which stocks will go up in price. Also, there is a lot of information on the Internet about dividends and perks, and the yield, but I don't really understand the difference between the two, and in the end, I can't decide which one is better.
Kishi: Beginners tend to get confused about dividends and yields. Dividends are cash dividends distributed to shareholders who own stocks. Dividends are a part of the profits distributed to shareholders in cash depending on the amount of stock they own and the company's performance.
Perks, on the other hand, are more accurately called shareholder perks. This is a system in which shareholders are given company products and services instead of cash. For example, if you work for a restaurant, you might receive a gift certificate that can be used at that company's stores or a discount coupon for cheaper services.
Nakagawa: Does it depend on the company which you get?
Kishi: That's right. There are companies that offer both dividends and benefits, companies that offer only dividends and no benefits, and companies that offer neither dividends nor benefits.
Nakagawa: No dividends or benefits...?
Kishi: People who buy stocks in such companies are looking to make capital gains from rising stock prices. If you buy stocks in a company that only offers dividends, you're hoping for not only capital gains but also dividends.
Dividends are very attractive because you get the money as it is, but there are cases where dividends can be zero depending on the company's performance, so you may need to be able to assess the company to some extent.
Nakagawa: So you do need to be able to assess the company to some extent.
Kishi: However, compared to that, the gifts you get under the preferential treatment system are very easy to understand, which is appealing. As long as you have a set number of shares, you know exactly what you'll get, so even beginners can feel at ease. Also, don't you feel happier receiving gift certificates or meal vouchers than receiving cash? That "sense of value" is also why shareholder benefits are so popular.
Nakagawa: Indeed, for a beginner like me, benefits are the easiest to understand. I often see celebrities enjoying shareholder benefits on TV and the Internet.
Kishi: That's right. Benefits have the advantage that you can actually experience the products and services made by the company, which gives you a high level of satisfaction and can also be used as a basis for future investment decisions. Also, the number of shares required to receive shareholder benefits, in other words the amount of investment required, is set low for individual investors.
Even beginners who start with hundreds of thousands of yen can receive gifts worth a few thousand yen, so it should be easy to feel like "I've made a profit from investing in stocks."
In addition, companies often offer more generous benefits than dividends because they believe that if they are going to return profits to shareholders, it would be better for them to use their own services, which would make them feel more attached to the company. Furthermore, if you use your own services, you can offer them at a price close to the cost price, which is an added benefit as it cuts costs.
Nakagawa: It all sounds like a good thing, but are there any drawbacks?
Kishi: This is a drawback, just like dividends, but the content of shareholder benefits can be suddenly changed or abolished depending on the company's performance. Also, no matter how attractive the shareholder benefits are, if the stock price itself falls, your investment balance can become negative.
It's the same with any stock that you will lose if the stock price falls, but if you are only interested in benefits, you will end up being insensitive to daily changes in stock prices.
However, one trap that beginners often fall into is the problem of becoming too sensitive to changes in stock prices and getting stressed out. This is especially true if you are investing with the sole aim of capital gains. That's why some people think that the advantage of buying stocks for the benefits is that they can continue investing in stocks without feeling stressed.
Nakagawa: I see. So what kinds of shareholder benefits are there?
Kishi: They can be categorized into gift certificates such as QUO cards, discount and preferential coupons for the company's products and services, daily necessities and food and beverages, catalog gifts, etc.
Nakagawa: I want them all. If you are buying stocks for the benefits, what criteria should you use to choose them?
Kishi: This isn't just about benefits, but many people first buy from companies that they are interested in, companies they already like, or fields they are familiar with. This is because, when buying stocks, you need to think about what the company does and how successful it is likely to be in the future.
In that respect, you will be more motivated to research companies that you already know a certain amount about. Also, in the case of shareholder benefits, you often receive preferential coupons for the company's products and services, so it would be nice to get something related to the stores and products you use regularly.
Nakagawa: Yes. However, if you are going to invest in stocks, it is better to have a large profit.
Kishi: Of course, it is not wrong to choose an investment by focusing on the yield. There are many websites that show the actual yield, including dividends and benefits. It is also a good idea to choose one with a high yield.
However, there are some points to be careful of when choosing in this way. Yield is a very important indicator, so there are many companies that try to attract attention by paying excessive dividends and benefits. It is not uncommon for such companies to have a lower-than-average yield the following year.
If you are looking at yield, make sure that the dividends and benefits have been continuing for several years or decades before buying.
Nakagawa: What level of yield is considered a good deal?
Kishi: As a rough guide, a yield of 3% or more would be considered quite "good." If you own 100,000 yen worth of stocks, you will receive 3,000 yen worth of products and coupons, which is more than enough. You should expect it to usually be around 1-2%.
If you search various websites, you will find some that claim to have a "yield of over 100%," but be careful because these are either temporary or only available for a limited period of time.
Also, to receive the benefits, you basically need to own more than 100 shares. You also need to choose what you can afford based on your budget.
Nakagawa: How much of a budget do you need specifically?
Kishi: That depends on the company's stock price, but if you want to freely choose from companies that are fairly well-known, you'll want about 200,000 to 300,000 yen. That said, you shouldn't overspend and buy, so be sure to stick to your budget when investing.
By the way, if you want to receive benefits with less money, it's recommended that you buy shares that offer benefits even if they are less than the unit. Less than the unit basically means less than 100 shares.
Normally, listed stocks in Japan are traded in units of 100 shares, but many securities companies offer "fractional shares" that allow you to trade smaller numbers of shares, and in some cases you can receive benefits with just one share. Of course, the benefits are less than if you held 100 shares, but you can purchase cheap ones for just a few thousand yen.
Nakagawa: By the way, what kind of companies are popular among people who like shareholder benefits? Please tell us if there are any that you can recommend to beginners.
Kishi: Popular stocks are those that have a stable yield of around 1-2% for many years, have a high level of satisfaction with the benefits they receive, and are stable companies. Recently, with the launch of the new NISA, more people are choosing stocks with the assumption that they will hold them for the long term.
In fact, some benefits have a higher rank the longer you hold the stock. Most people invest in stocks with the aim of building long-term assets, so they prefer things that you can hold for a long time and that have elements that will benefit you by holding them for a long time.
For example, if you hold more than 100 shares of Bic Camera, you will receive shopping coupons that can be used at Sofmap, Kojima, and other companies in the same group. Shopping coupons for home appliances are very popular because anyone can use them. The yield of the benefits is about 2.1%, and as of January, you can buy 100 shares for about 130,000 yen, so it's easy to get your hands on.
By the way, Bic Camera has record dates in February and August. In February, the amount is fixed for each number of shares, but in August, the amount varies depending on the holding period. If you hold 100 shares or more for less than a year, you will receive 1,000 yen, if you hold more than a year, you will receive 2,000 yen, and if you hold more than two years, you will receive 3,000 yen.
KDDI is also popular because it gives out catalog gifts. If you hold 100 shares or more for less than five years, you can choose from a catalog gift worth 3,000 yen, and if you hold more than five years, you can choose from a catalog gift worth 5,000 yen. Even if you don't know what you want when you buy the shares, the catalog gift is helpful because you can choose what you want when you receive it.
Nakagawa: So you need to consider the yield, benefits, and your budget when choosing your investment. There are so many attractive benefits available that I'm sure I'll have a hard time choosing, but I'll use today's advice to look for investment opportunities myself!
NFTs, which have been in the news because digital art has been traded at high prices, actually often come with "benefits"? What are NFT "benefits" that are a little different from shareholder benefits?
Kishi: I heard that NFTs, which have been a hot topic lately, also have something like shareholder benefits. This genre is Nakagawa's specialty, isn't it?
Nakagawa: That's right. There are some benefits that you can get by owning an NFT, so depending on how you look at it, it could be said to be similar to benefits. Oh, for those who don't know much about NFTs, think of NFTs as digital data with a "Certificate of Authenticity and Ownership".
Digital data can usually be copied and pasted infinitely, but digital data that has become NFTs can be distinguished as "originals" and not copied, and can be traded.
Kishi: Speaking of NFTs, I've heard stories of digital art being sold for hundreds of millions of yen. Do those things also have benefits?
Nakagawa: In the case of expensive digital art, the art itself is more valuable, so in many cases there are no benefits. The company that created the NFT is free to decide whether to provide benefits for NFT holders, so there are some NFTs that do not have any benefits.
However, recently, there is a trend among people investing in NFTs to pay attention to the utility of the NFT. In particular, there are many generative NFTs, which are NFTs that are a series of digital images.
Kishi: What kind of benefits are there?
Nakagawa: There are no legal restrictions like with stocks, and no common sense like "it should be like this," so please listen with the understanding that there are many different types.
For example, there is a generative NFT called "CryptoNinja Partners (CNP)" from Japan. This project is developing a series of characters called CNP one after another, and NFT holders are given the right to purchase them first.
This project was also born from a social networking site called Discord, and NFT holders are given various rights in the project community, such as a chat room that only NFT holders can participate in.
Kishi: I see. But to be honest, I don't think I'd be very happy if I invested in NFTs and received a new NFT.
Nakagawa: That's what you would normally think (laughs). In fact, there are almost no benefits with NFTs that everyone would be happy with, like shareholder benefits. Even so, if a newly created NFT becomes a big hit, the price will rise sharply, and there are cases where you can make a considerable profit just by selling it.
Also, there are many NFTs like CNP that serve as a ticket to a certain community.
Another trial was the Bored Ape Yacht Club (BAYC), where holders of a generative NFT were given the privilege of using VIP lounges at certain airports. BAYC is a high-end NFT that can cost tens of millions of yen, so its holders were treated as the so-called wealthy. In this way, NFTs can play a role like a membership to a VIP community.
Other examples include events for NFT holders, and NFT holders voting on the future of the project. People who like NFTs have a culture of "valuing the community," so I think that in many cases, there are benefits "within the community" for holding them.
Kishi: It's a little appealing to think that the NFT you received could go up in value and make a lot of money, but it seems that it's different in nature from shareholder benefits.
Nakagawa: That's right. In the case of NFTs, it may be better to think about deciding whether to buy an NFT based on what kind of benefits are available, rather than buying in the hope of receiving preferential treatment or benefits.
As I mentioned earlier, there is an atmosphere these days that it is natural to offer some kind of benefit to NFT holders, so all NFT issuing companies announce or hint at the various benefits that will be available. On the other hand, if there are no such benefits, you cannot expect the value to increase, so it would be better not to buy an NFT.
Makoto Kishi
Influenced by Mr. Kiritani, a shogi player and investor famous in the world of stock investment, I am an office worker working at an IT company who enjoys investing mainly through preferential treatment. Every year, I get excited when I receive preferential meal coupons from the Skylark Group, Ootoya, and Yoshinoya.
Ken Nakagawa
A freelance writer in his 30s living in Tokyo. He is knowledgeable about Web 3.0 and NFTs, and works as an IT journalist focusing on the latest technology. His hobby is earning points, and he enjoys using the points he has steadily saved up to eat out all at once.
A thorough explanation of stocks and NFTs that offer incentives: 16 attractive shareholder benefits
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