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2 articles found

Wealth Awakening

91% of Taiwan Retail Investors Lose Money! The 5 Deadly Sins—The 3rd Is the Most Fatal

According to TWSE statistics, the proportion of Taiwan retail investors with consistent long-term profits is below 10%; over 90% lose money in the market. You open your Taiwan stock app, see the numbers dropping again, and your finger hovers over the screen unsure whether to cut losses—is this a scene you live through every day? This article breaks down 5 deadly sins for Taiwan retail investors: chasing rallies and selling on dips, over-concentration, no stop-loss (disposition effect), ignoring trading costs and taxes, and no investment plan. The 3rd sin is the most fatal: the disposition effect causes you to sell winners too early and stop losses on losers too late. Using NT$1M as a sample: even at half-price commissions, monthly turnover can eat 7–8% of return per year in trading costs alone, plus a 0.5% difference in ETF management fee can mean a six-figure gap over 20 years of compounding. Includes 4 iron rules, 4 action steps, and differentiated strategies for different groups.

17 min
Wealth Awakening

Monthly Distribution Isn't a Retirement Plan — The Tax Strategy Taiwan's Rich Use

Taiwan's high-dividend ETF AUM broke NT$1 trillion by end of 2023 — 00878 alone exceeded NT$500 billion — but the truly wealthy in Taiwan don't retire on monthly distributions. They use a fully legal but largely unknown tax-optimization and compounding architecture that doubles wealth growth. Using the post-2018 tax-reform dividend choice (combined reporting with the 8.5% credit capped at NT$80,000 vs 28% separate taxation) and Taiwan's current capital-gains-tax exemption for individuals, this article breaks down why distributions aren't a free lunch, why a 20-year gap of NT$1.5–2 million exists between high-dividend ETFs and total-market ETFs (such as 0050), four iron rules, and four action steps. You will see exactly how a 20%-bracket taxpayer with NT$200,000 in dividends pays about 11.5% effective tax under combined reporting — and how the same person choosing a 0050-style accumulation product can keep compounding uninterrupted. The article also shows how to dynamically switch between combined and separate reporting each May based on that year's income bracket, turning tax planning into a 5-minute annual optimization rather than a once-and-done decision. Closing with four contingency moves for 2008 or 2020-style systemic crashes, this is the tax and compounding playbook most Taiwanese retail investors were never taught — and most bank RMs won't bring up because their KPI is sales, not your after-tax return.

15 min