What are you going to do with the next 364 days?
Every year ends with an annual review, and starts with a plan.
I usually spend a couple of days doing a personal review and plan, but I’m also going to do one for RetireJapan this year.
So as we tentatively move into 2017 (a milestone year for me chronologically), here are my plans for the year.
RetireJapan
Blog posts will continue, although I may play with the frequency and timing. Let me know in the comments if you have strong opinions about this 🙂
I think the site as a whole needs work, so that first-time visitors can get up to speed quickly by looking at the info pages.
Having failed completely to write any guides last year, I’m going to try and do better this year. I’m getting a lot of emails asking for information about iDeCo, so that seems like a good place to start.
My personal finance
1. NISA account
I will max this out (1.2 million yen) and buy a mix of shares and ETFs that produce dividends. Eventually I would like this to provide my living expenses. It’s nowhere near that at the moment (just under 260,000 yen last year), but I hope to see it produce around 1.5 million yen a year eventually. My wife is doing something similar, so between us we should produce enough to live on.
2. THEO
I will send 20,000 yen to THEO twice a month. I get free bank transfers with Shinsei Bank, and THEO just has an annual charge of 1% so it doesn’t cost me anything to invest in small amounts. I really like their product and service so plan to continue doing this in 2017.
3. iDeCo (J401k)
I just did the paperwork to open an iDeCo account. Public servants become eligible to open an account from this month (along with pretty much all residents of Japan) so I am looking forward to finally getting access to this excellent tax-reducing product. Unfortunately at the moment the maximum I can put in each month is 12,000 yen but hopefully that limit will be raised in the future.
4. Home improvements
I hope to complete phase two of our home improvement plan: installing mechanical heat recovery ventilation (I’m probably going to go for this model) in our main living space.
Basically this plan worked out quite well for me in 2016, so why fix it if it ain’t broken, eh? My wife will also continue investing in cheap index funds and ETFs in her iDeCo and NISA accounts.
I also managed to persuade various family members to help us fund our granddaughter’s Junior NISA account starting from this year.
I’ll be cutting spending by cycling to work more, finally ditching Softbank, and cancelling Apple Music (I discovered Amazon Prime includes a ‘good enough’ alternative).
What’s your plan for 2017?
Sounds almost like my plan too, hahaha!
Planning to max out contributions to NISA and iDeCo, whilst last year’s bonuses and remaining contributions get rolled into the taxable account.
On a personal note, I am hopeful that Abe keeps his promise to reform the immigration system such that highly skilled foreigners are granted permanent residence after 1 year – then and only then can I start shopping around for ultralow interest rate mortgages.
PS: Ditching SoftBank might be the best decision ever!
I might struggle a bit to get the money together to max out everything, but it’s worth trying 🙂
Hope PR works out for you: that’s another no-brainer if you can get it.
Ditching Softbank an excellent step for me too.
In 2017 I’m changing from 1 full-time (JHS/SHS) to 3 part-time (university) jobs, and moving, and with a bit of luck becoming a father, so all that will take some adjusting to. I now have enough of an emergency fund in place so am definite that I will continue to try to invest at least 20% of my gross salary, though.
Speaking of investing – ¥260,000 in dividends from ¥1.2m in investments?! Or is that not what you meant? I’ll be lucky if I get ¥20,000 this year… Anyway, great job with the site in 2016 and here’s looking forward (with some trepidation) to 2017.
Ha ha, no, I’m not making 25% in dividends (I’d have a bright future as a hedge fund founder if that were the case) 😉
That was probably badly written. I made 260,000 yen in dividends from my entire Rakuten portfolio (NISA and non-NISA) which is currently worth just over 10 million.
Going the uni route is a big change but it can work out very well -the work tends to be better paid and opens up more options. Good luck!
1. Check out iDeCo and NISA
2. Sell one car
3. Reduce spending in general (reduction in restaurant visits and lunch boxes)
4. Change to cheap mobile plan (YMobile Lequios etc.)
5. Pay off some of the principal of my mortgage
Is there any benefit to using the THEO Robo Advisor over buying stocks through a stockbroking account with say, Rakuten or Monex?
Hi John
The main benefit is simplicity: THEO will design a diversified portfolio, manage and rebalance it for you, do tax-loss harvesting, and do your tax reporting.
For someone who doesn’t understand investing, or who doesn’t want to spend any time on it, it’s a pretty good option.
The downside is the 1% fee (although this means there are no trading or transfer fees).
More experienced people may prefer to do their own investing, as they can save on fees (but will spend a lot more time).
Got it. I think I’m happier just buying ETF’s through Monex. I eventually want to be a more experienced investor and I prefer to learn by doing. My plan this year is iDeCo, max out the NISA and put anything else into ETF’s. Also, try to save more and try to earn a bit more on the side.
The other thing to keep in mind is that unlike NISA and iDeCo, THEO is not tax-advantaged (although so far for me the tax-loss harvesting means that I haven’t made any taxable profit despite the 18% return last year).
2017 will be busy:
– 3rd kid on the way
– move back to Japan mid year (and, in the process, change jobs, find a new place, buy a car, furniture… ugh…)
Double congratulations! Do you know which area you’ll be moving to?
Happy New Year everyone.
My plan for 2017:
1. Live more frugally and money-conscious than I have been doing up to now. (Becoming a father has really changed my perspective on things.)
2. Open up my first Japanese investment accounts within the next few months.
3. Invest as much as I can into NISA accounts for me, my wife, and my daughter. (I’ve already saved nearly enough to max out one NISA account!)
4. Invest anything left over elsewhere–maybe one of those robo-advisors eould be good, since I’m pretty clueless about investing.
4. Keep trying to learn as I go along.
5. Enjoy life in the meantime!
Hi Ben, thanks for a really useful site.
Last February you did a piece on Interactive Brokers as potentially the best solution for non Japanese speaking residents.
Any alternatives or updates on this ?
I’m saving into an account with zero interest and need to find a good solution.
In Andrew Hallams book I think he mentions some Singapore Banks that allow non residents to open accounts, that was a few years ago any idea if that option still exists anywhere ?
Hi LC
Andrew Hallam now recommends Interactive Brokers as his main go-to place for expats. That’s where I got the idea from: https://assetbuilder.com/knowledge-center/articles/interactive-brokers-allows-us-expats-to-invest-with-index-funds
He also recommends DBS Vickers in Singapore, TD, and Saxo. OCBC is another Singapore option.
Here’s another take on it: http://freedomthroughpassiveincome.com/brokerage-options-for-expats/
I never followed through with opening an account with IB, but I may do in the future to diversify my holdings so they are not all in Japan. This would happen if I had more money to invest than I could put into iDeCo and NISA.
Hope that helps!
That helps a lot, many thanks Ben.
Best Wishes for the New Year
Hoping for a workshop in Tokyo in 2017…!
Hi,
Since you mentioned NISA/Theo…
Do you know or have a list which japanese investment thingies have access to US index funds/ETF’s, Japanese index hasn’t been performing really ever I’ve been here so I rather put my monies to somewhere where it could actually grow 5% or so, dividends going instantly back to the same ETF’s etc… and is compatible with MoneyForward 😉
Moneyforward was really an eye-opener for me. Few years back I thought I was saving money, nope, I was bleeding 50k/mo. Now I’m saving…
Opening my J401k this month or next. It’s crazy good but even then would be nice to find one that has something like vanguard ETF’s…
Hi TL
I hadn’t seen MoneyForward before, I’ll have to check it out. All the iDeCo providers I have seen only have Japanese mutual funds.
THEO builds their portfolios with US ETFs. All the major online stockbrokers have access to the US markets, so you can get Vanguard ETFs.
Hope that helps!
Hey man, I just wanted to say thanks for making this site. I am from the UK and we have fantastic advice from this website: http://www.moneysavingexpert.com/
Which is great if you’re living in the UK, but I live here in Japan and your blog – although much much smaller – is really helping me make some money decisions. Thanks again and please keep it up.
Use that site as a guide for how to organize this site!
Thanks, Ian! I’m a big fan of MSE 🙂
Good advice about the organisation.