It’s easier than you might think
Happy New Year! I hope 2025 brings you happiness, growth, joy, and excitement.
You probably have some resolutions or goals for this year. I do too.
One of my biggest goals since I started RetireJapan in 2013 is to help as many people as possible to learn more about personal finance and encourage them to take action to improve their financial situation.
Just learning a couple of basic concepts and setting up a few simple habits could transform your life.
In 2008 I lost my job at short notice and was facing a bleak future with no savings, a large family to support (wife, three kids, two cats), and no control at all over the situation.
Now in 2025 I am pretty sure we will never have to worry about money again.
And pretty much anyone can transform their life in this way.
Can you imagine life without money worries?
We still have problems, of course, but problems are so much easier to deal with when you can focus on them without having to worry about how you are going to pay for things.
So how can you sort your finances out this year?
Much like health, or learning, it is simple but not easy. You need to focus on a few simple effective habits, and then keep doing them for a long time.
I divide this into five areas: earning, spending, saving and investing, security, planning.
You don’t have to be an expert at any of these, but you can’t afford to be bad at any of them.
Earning
This is fairly simple. The more you can earn the better. The more you enjoy your work the better. Constantly working on this is one of the highest value activities there is, but many people are not really consciously thinking about their career.
Spending
Spending is also simple. You need to understand what you are spending money on. Once you know that, you can then focus on making your spending more efficient. Efficient spending makes your life better. Inefficient spending does not. By reducing the latter you free up money to save and invest, or to spend on things that are more important to you. It’s kind of like Marie Kondo but for money.
Saving and Investing
Also simple (a trend is emerging) but it can seem difficult or complicated. Save as much as possible without making yourself unhappy. Start investing regularly. Use NISA to invest tax-free and iDeCo to invest for retirement and lower your income taxes. Automate this as much as possible, and do it for decades. You’ll be amazed at the results.
Security
This is often overlooked, but is so important. Basically save up an emergency fund (some cash you can use to help you when unexpected things happen) and get any necessary insurance. Not doing this exposes you to the risk of having to use your savings and investments to deal with problems, cancelling out your hard work.
Planning
Once you have everything else in place, it is important to make a simple plan for the future. Figure out what retirement is going to look like for you. How much money will you need? How are you going to make sure you have enough? If you fail to plan, you plan to fail. I talk to too many people who are approaching retirement with no plan, no savings, and no idea of what they are going to do. Don’t do that to yourself.
Your First Ten Million Yen
If you would like some help with this, you might be interested in our flagship online course for beginners, Your First Ten Million Yen. We are launching the fifth cohort on Friday January 10th, and the course will run in February and early March.
There is no need to take the course (all this information is available on our YouTube channel and the RetireJapan site, and you can ask questions on the forum for free. But the course is designed to save you time and help you to take action. Most people make back the cost of the course within the first few months, and the lifetime value of getting started with saving and investing is likely to be tens or hundreds of millions of yen.
Sign up on this page to get more information and priority access.
How to start
Most people are going to be overwhelmed, even with this simple list.
Don’t try and do everything at once. You will likely get bogged down and stressed, and give up.
Instead, choose one thing. Learn about it. Start doing it.
Once that is done (and the nice thing about this stuff is that you can generally set it up and then forget about it), choose another thing, learn about it, get started.
If you single task this and take it step by step, by this time next year you could well have all five areas set up, at which point you can stop worrying about your finances and get on with the more important things in life.
How are you doing? Are your finances in order or are you just getting started? If you’re not fully set up, choose one thing to work on and leave a comment below to motivate yourself.
Good luck, we’re here to help if you need us.