Probably about 30 too many…
Last year I taught a personal finance class in English at my university. It was an elective ‘high-level’ class, and I had five wonderful students join. We had an amazing time talking about money, happiness, and life, and how they interact.
This year I am trying to repeat the experience, but with ordinary undergraduates. We had the first session last week, and I gave them some questions to preview the course content and get them speaking to each other in English.
I posted the questions on Facebook and someone asked me to answer them, so I decided to kill two birds with one stone by answering them here and taking care of the Monday blog post π
1 Do you have a part-time job? Why? Why not?
Yes, I have had a second or even third job since my second year in Japan. Working in different contexts or on side hustles allowed me to increase my skills, expand my networks, and support my family. Right now I have a day job and three side projects.
2 Do you save money regularly?
Yes, I put money aside regularly, and encourage my wife to do the same. Between us we save more than half our income. It is surprisingly easy once you get started to increase the amount you save. Before getting into personal finance I saved nothing.
3 Do you have a financial role model?
Not really. No one in my family is into investing or talks about money much. My role models are online or in books (Mr Money Mustache, Warren Buffett, Jack Bogle, Dividend Mantra, and many others).
4 What did your family teach you about personal finance?
I don’t think they taught me anything, unfortunately.
5 Do you have any credit cards?
Yes, I have too many credit cards, many of them left over from my travel hacking phase. I have also cancelled a lot of credit cards.
6 Would you rather make a lot of money or enjoy your work?
I think once you have enough money you can choose what work you want to do, so it’s not a straight trade-off. The more money you have the more selective you can be.
7 Do you expect to be rich?
No, but I define rich as eight figures US. I expect to be very comfortable.
8 What would you do if you received 100,000 yen?
I would put it in my THEO account.
9 Do you think attending university is expensive in Japan?
Not particularly, especially if you live at home and go to a state university.
10 Did you learn about personal finance in school?
Not at all.
11 Have you ever lost a lot of money or been ripped off?
I invested in a hedge fund and lost out on the 2009-13 rally. I don’t know if that counts as losing money or being ripped off, but it hurt.
12 Do you plan to buy a house or apartment in the future?
I bought a ‘manshon’ last year, so I’m good for now.
13 Do you have any insurance at the moment?
Yes, I have car insurance, bicycle insurance, accident insurance, fire insurance, and health insurance.
14 Are you interested in starting a company?
Yes, but I don’t see many advantages over being a sole proprietor in Japan.
15 What do you think of the current job hunting system in Japan?
I think it is a dreadful waste of time and effort.
16 Are you planning to get married?
I got married 13 years ago, so I think I’m good.
17 Should students miss classes to look for a job?
Well, I don’t think so, but fortunately I only teach 1st and 2nd years so the issue doesn’t come up much.
18 Do you think taxes in Japan are high?
I think the consumption tax is low, income tax is reasonable, local inhabitant taxes are extortionate, taxes on capital gains and dividends are slightly high, and inheritance tax is quite high.
19 What skills do you have that will help you to get a job?
I enjoy writing and improving systems. I can communicate well in English and Japanese. Fortunately, I have no intention of ever applying for a job again π
20 What do you think is the most important thing in a job?
I think that doing something well and contributing to society in some way is very important.
21 What are you doing to achieve your dream?
I am saving and investing to gain control of my time, and developing my writing skills to allow me to do more interesting work later.
22 What do you think about career women?
I heartily approve of them.
23 Would you accept doing overtime work?
Not as a result of someone else’s mistake. If I choose to work on something or need to hit a self-imposed deadline I am happy to work as much as necessary, but if someone asked me to do something in an unreasonable amount of time I would refuse.
24 How often do you want to take a holiday?
I think three or four 2-4 week holidays a year would be enough.
25 How much do you want to earn?
I think 3-6 million yen a year will allow my wife and I to live well (and quite comfortably at the higher end of that). My ‘number’ is 200 million yen.
26 How do you want to contribute to society?
Mainly through my writing.
27 Do you want to be a public servant?
Noooo. Been there, done that. Found the paperwork and constraints soul-destroying.
28 Do you think about retirement?
I think I don’t want the traditional kind, but the kind where you no longer have to work for money calls to me.
29 Does your family talk about money?
I do. No-one else seems particularly interested, unfortunately.
30 Where do you think the best place to live and work is?
For me Sendai is pretty good. I would love to be able to spend half the year here and the other half abroad.
31 Is having a social security system important?
Yes, it is one aspect of a civilised and humane society.
32 Should the government pay for university education?
I don’t think so. People tend not to value things unless they pay for them, so I think students should pay for their own studies (through loans or a higher tax rate after graduation).
33 What do you think about inheritance tax?
I think it is important. Ideally it would prevent the accumulation of unearned wealth over a certain amount.
34 Have you ever invested in the stock market?
Yes, quite a bit over the last five years or so.
35 How does the value of the yen impact your life?
It makes me feel richer when it falls, as almost all our investments are in foreign currencies.
36 Do you have any debt?
I have a mortgage at 0.5% but could pay it off if I needed to. No other debts.
37 Can you explain inflation?
Yes, but I think government figures don’t adequately express it.
38 Do you think couples should have separate bank accounts?
Yes, I have always found the idea of spouses being a single financial entity strange.
39 How much do you think people should save?
I think 20% is the absolute minimum if they intend to have a comfortable life. I personally aim for more than 50%.
40 Do you think giving to charity is important?
Yes, for selfish reasons as well as altruistic ones. Giving to others (money, time, attention) makes you feel good.
Phew, that was way longer than I thought it would be. How about you? Care to answer any of the questions?
Your 0.5% mortgage interest rate caught me by surprise. We pay 0.96 variable and we thought that was a pretty good deal. How did you manage to get such a good deal?
We got it last year by shopping around. It’s with a local bank. The advertised rate was 0.6 but we got a discount (probably because I’m a public servant)
Interesting thought on couples having separate bank accounts. And good read for a Monday post I’d say π
I know you mean well, but teeny wee bit of eh? on your word choice for question 22 (‘approve’).
Argh, you’re right Mary!
Was meant to be something like εΏζ΄γγΎγ.
Guess I’ve been here a bit too long π
Meh, I think that’s being a bit harsh; that is riffing off reasonably well-known wording. It’s something along the lines of when Ghandi was asked what he thought about Western Civilization. His response was ‘I think it would be a good idea’.
14 Are you interested in starting a company?
Yes, but I don’t see many advantages over being a sole proprietor in Japan.
This is really interesting. This is the first I’ve heard of sole proprietorship. I think it would be a good idea for a blog post about sole proprietorship in Japan and how it has more advantages than having your own business and what kinds of things you could sell/do with sole proprietorship.
Sole proprietorship is just the default if you are self-employed or have a business that is not incorporated (into a company).
As far as I can tell, it has all the benefits (tax write-offs, etc.) and none of the disadvantages (red tape, restrictions on taking money out) of a company.
However, lots of people own companies in Japan, so I presume I am missing something π
I haven’t looked into it very much but I think what you are missing is the limited liability which might be the main purpose for incorporation. I too an a sole trader. My main business is affiliate marketing (The Shirt List) but I work in an Eikaiwa part-time.
Hi Alan
My wife runs an English school, and we have liability insurance. Don’t see a need to further shelter us, especially as this is Japan and not the US π
I don’t feel the need for it either but that is the advantage of being incorporated. I’m thinking of dabbling in real estate, specifically rental properties and depending on the scale I think it may be wise to do it as a company because I wouldn’t want to lose my house if my business went belly up.
Regarding Q38 and separate bank accounts, I think this is a bit of a tricky issue. Based on what I’ve been reading recently about domestic abuse, particularly in Japan, separate bank accounts are actually one way that abusers can control their non-working spouses and severely limit their access to money. If the couple have a nice egalitarian relationship and share their money for the good of each other and the family then yes separate accounts are great. But if not, they can become a means of abuse.
That’s an interesting point, but I’m not so sure the accounts are going to change the relationship. I know a couple of people (a woman whose husband insists she accounts for every yen she spends by showing receipts and a man whose wife restricts his spending to a few hundred yen a day) who are in seemingly abusive relationships despite having a shared current account.
To be honest, I wasn’t thinking about current account so much as savings/investment accounts. I think it’s very important for everyone to have their own money and have that security regardless of what happens in their life.
My wife and I once enquired about a joint account and were told that joint accounts were not possible. We didn’t mind much because we have our own accounts and pretty much just share all our money anyway, but I did think it was odd. So I wonder if anybody here has a joint Japanese bank account and can confirm that my bank was, in fact, just talking nonsense!
As far as I know joint accounts are not a thing here in Japan. I was referring to the practice of one person controlling all the household finances for both partners π
Ah,that practice would indeed seem to be quite common. I know more than a few Japanese men who seem to surrender all financial control to their wives and who complain about the pittance of an allowance they get!
That joint accounts were ‘not possible’ seems odd; I’ve had joint accounts in Japan going back 20 years, although these were major banks. Perhaps it was a smaller bank?
Hi DragonAsh (ζγγγ!)
Interesting! So these are current accounts with two names on them and both account holders can access the money? Which banks?
> Interesting! So these are current accounts with two names on them and both account holders can access the money? Which banks?
Yes. Either one of us, as long as we had the correct hanko and ID, could go in to a branch and make deposits, withdrawals, do anything right up to closing the account if we wished. Obviously we both had cash cards.
That said: Now that I think about it….neither of the banks I used at the time exist LOL – Sumitomo Bank (SMBC) and Dai-ichi Kangyo Bank (now Mizuho). Maybe something changed during all the interim mergers?
A really interesting article and a site many of us follow.I am amazed that you can survive on 3-6 Million Yen a year and take 3 trips a year.I presume you have no children, in laws to take care of,eating out with friends or take international trips together every year as well as saving for 200 million yen.
Hi Mike
Sorry, that probably wasn’t clear. The 3-6 million is how much money I think we’ll need in retirement π
As you mention, our current income is a bit more than that as we save 60%+.
I have stepkids, but they are all grown up now and independent (there was one point where two of them were at private university and the other was at private high school that was a bit challenging money-wise).
My wife and I have fairly simple tastes (especially in terms of cars, luxury products, etc.).
I probably spend more money on books than anything else… and our housing costs are low.
My in-laws live locally and are still coping by themselves fortunately.
Finally the trips is aspirational -what I’d like to do- not my current reality. With 3-4 jobs, it’s quite hard to take much time off π