The Young Tech Worker
Today’s post is something special. One of the aims of this site is to encourage people to learn more about personal finance and investing so that they can take control of their money and future. I’ve been wanting to showcase readers for a while now, and finally found my first contributor.
Desmond P. has very kindly agreed to answer our questions so let’s meet him below.
Tell us a little bit about yourself.
I was born, raised and educated in Singapore. Having had an intense interest in Japan through its anime subculture initially, I eventually taught myself the language over a period of 5 years.
Got lucky twice during final year in college. The first was when Japanese megacorporations started going to Singapore to recruit new graduates. The second was when I got recruited by one of the largest IT systems integrators in Japan just before graduation – with countless failures along the way.
Although very much a lifelong city dweller, I personally think that Tokyo has a buzz and quality of life that is unmatched elsewhere.
How did you get started with personal finance?
Like Japan, Singapore is facing numerous problems regarding the sustainability of its pension system given its rapidly ageing population. To that end, premium payments were increased whereas payouts were reduced, and the trend looks set to continue for the next few decades.
Coupled with research showing that there is not a single pension system globally that provides adequate payouts to retirees, I eventually came to the very grim realisation that we are ultimately responsible for our own retirement. Any government handed payouts ought to be considered a bonus.
Research Source: http://www.globalpensionindex.com/
What are you doing at the moment?
Working as a FinTech consultant during daytime. During night time, I am usually reading voraciously so as to gain more knowledge on real estate investing, or planning my monthly stocks investment, or sometimes both!
What books/websites/companies do you recommend?
There are a few investing books which have earned a permanent space on my bookshelf. No doubt more will be added as time goes on.
The Bogleheads’ Guide to Investing
A Random Walk Down Wall Street: Including a Life-Cycle Guide to Personal Investing
The Millionaire Next Door: The Surprising Secrets of America’s Wealthy
The Millionaire Real Estate Investor
What’s your plan going forward?
Stay the course. I started investing 20% of gross income every month since July 2015 which in hindsight is not exactly the best timing. Markets have since tanked so badly that had I invested a lump sum, it would currently be an unrealized paper loss of between 30~40%. Dollar cost averaging has helped to greatly mitigate that risk, or in the worst case another recurrence of Japan’s 1990 stock market crash in which it is still struggling to recover from.
Although it will be 30 years before tapping on the portfolio to fund retirement, I am currently doing intensive research before expanding into real estate investment to replace bonds due to projected long term macroeconomic trends.
Any other thoughts?
The fundamentals of investing remain consistent no matter the country or culture. Live below one’s means, invest early and consistently in the lowest cost index funds or ETFs available, minimize taxes and stay the course. It could very well mean the difference between having a comfortable retirement, or living hand-to-mouth decades down the road.
I am a bit jealous of Desmond, as he seems to have gotten started much earlier than I did. This means his 20% saving rate will probably end up with better results than my 40-50% rate.
Love the book recommendations too. The only one I haven’t read is the real estate one, so I will be checking that out. I’m still not convinced that real estate is for me, but try to keep an open mind.
As for starting in 2015, investing regularly just means good buying opportunities. Personally I am hoping for a ten-year crash so I can get some cheap shares!
And I completely agree with the need to take responsibility for your own retirement. That’s one of the reasons I got started too.
A huge thanks to Desmond for taking the time to share his story. If you would like to be featured on Reader Profiles, either anonymously or with your real name, please get in touch. It’s fairly easy, all you have to do is answer the six questions above.
Hope to hear from you soon.
Hello! I would like to ask you about the national health system or ‘kokumin hoken’ system here in Japan. Is there a way to get out of it?
I am a single Mum to a 9 year old. My yearly income is just about 70,000 yen above the minimum (2,043,000) earned and which exempts you from paying city tax, which in turn (now I know) affects your national health insurance monthly fee. Because of this 70,000 yen above this minimum, my NH payment jumped to 23,000 yen X 10 payments for the year (from 11,000/month). Doubled!
City Hall did explain to me that it is because I now have to pay city tax (5,300 yen x 1 payment/year) which takes me to the next level.
But it is so expensive, and I find it unfair. Is it right? Is there anything I could do?
Hi Liza
Very sorry to hear about your experience. These kinds of huge jumps when crossing an arbitrary threshhold are a real problem in my opinion.
Kokumin kenko hoken and kokumin nenkin (pension) are compulsory for all residents. In my experience it is possible to get the pension payment reduced (by a quarter, a half, three quarters, or completely because of low income or difficulties) but the health insurance was non-negotiable.
This is probably horrible advice, as I’m guessing you don’t have any time as a working single mother, but if you can find a sympathetic person in city hall to help, you could explain your situation, tell them you’re having trouble paying, and ask them for advice. If nothing else, get them to tell you how the system works and the income levels for next year.
You could also talk to the tax office and see if there is anything you could do to get your income under the limit (certain insurance, the ‘hometown’ tax gifts, and other deductions). There is some basic info at this site: http://gaijintax.com/step-by-step-guide/
You could also (if this seems likely) talk to your employer and see if there is anything you can do to restructure your income (receive travel and housing allowance in exchange for a lower salary or go onto shakai hoken, for instance).
You are basically in the worst possible situation in terms of income. If your income was slightly lower you would get to keep more money as your health payments would be higher, and if it was higher you could afford the health payments!
There may also be support groups for single parents in your area who would be able to give you better advice.
I’m sorry I can’t be of more help and hope you find a good solution. If you do it would be great if you could post back here and let us know how things worked out.
Sorry, that tax site seems to be down now. Shame, as it was a nice resource.
I’ll get in touch with the owner and see if we can get the content for this site 🙂