RetireJapan

I am sure I do not have to tell you that cash is king in Japan. Outside of the odd Insurance w/ an investment component and maybe company stock most people are holding cash.

The lack of money market options, term deposits with decent interest, or vehicles like ladder funds also adds to this issue. In addition, many of us have Japanese spouses that are not on board with the idea of investing too much.

So my question. What percentage of your holding is cash vs investment?

My wife is just 100% on board for iDeco and Nisa, but less so for investments in our taxable accounts. Though, I think she will be okay with just bonds...maybe

We still have a large junk of cash sitting there, earning .1% interest.

I could live with a 50/50% allocation.

Thoughts? Experiences?

*Checks spreadsheet*. About 10%. Higher than I expected.

But I don't actually allocate a percentage. Instead that amount is my emergency fund / FU money / buffer / whatever, plus any other budgeted for expenses. If all goes to plan, it will slowly decrease over time - because the investments are increasing - not because I am spending it!

I don't know how much money you're talking about - but one thing that could be worth thinking about is what to do with new money? What percent of your income do you invest? If your income increases, you can also put some of the increase into increasing your savings rate too. You could use your cash savings as a safety net, and then build a portfolio with income going forward - assuming everyone is on board, of course.

For me personally? Almost none. Maybe 1%. I pretty much invest as soon as I can get my clammy hands on cash. I have maybe a month's worth of expenses in cash.

However, my wife holds a lot of cash, both in her personal accounts and for her business (we aim to have at least 2-3 months of cash on hand, so we can pay rent and salaries). She's probably 30% cash overall.

Between us I think that works quite well

RetireJapan wrote: ↑Sat Jul 18, 2020 2:46 am For me personally? Almost none. Maybe 1%. I pretty much invest as soon as I can get my clammy hands on cash. I have maybe a month's worth of expenses in cash.

However, my wife holds a lot of cash, both in her personal accounts and for her business (we aim to have at least 2-3 months of cash on hand, so we can pay rent and salaries). She's probably 30% cash overall.

Between us I think that works quite well

That might be a good way of thinking about it. She is great at saving, and that is the most important thing. Moreso than investing.

I can focus on investing "my income" and she can save hers as she sees fit.

What do you think is a good number for cash reserves for a family of three? ５００万？

Kanto wrote: ↑Sat Jul 18, 2020 5:30 am What do you think is a good number for cash reserves for a family of three? ５００万？

Whatever you think you might need, for as long as makes you feel comfortable. 6 months rent/mortgage/food/bills is a good start. I would also have some cash at home for earthquakes (maybe 100,000 or so).

Whatever you think you might need, for as long as makes you feel comfortable.

I feel comfortable with 6 months. Her strategy, which she inherited from her mother, was just to keep saving as much as you can, and not stop. Which is fantastic. However, there is not part II to that strategy, it is just sitting there making the bank richer.

I suppose we need to settle on a number.

Kanto wrote: ↑Sat Jul 18, 2020 2:43 pm

Whatever you think you might need, for as long as makes you feel comfortable.
[/quote]

I feel comfortable with 6 months. Her strategy, which she inherited from her mother, was just to keep saving as much as you can, and not stop. Which is fantastic. However, there is not part II to that strategy, it is just sitting there making the bank richer.

I suppose we need to settle on a number.
[/quote]

Well it is making the bank richer but you are preserving its value to a large extent by keeping it there, given the low inflation here. And also preserving your wife’s peace of mind, with myriad knock on effects for the happiness of you and your family. You said you have Ideco and NISA set up. It might be prudent to see how these perform over the medium term. If it’s good, you may be pushing at an open door in persuading your wife to expand your investments.

... bank richer but you are preserving its value to a large extent by keeping it there, given the low inflation here. And also preserving your wife’s peace of mind, with myriad knock on effects for the happiness of you and your family. You said you have Ideco and NISA set up. It might be prudent to see how these perform over the medium term. If it’s good, you may be pushing at an open door in persuading your wife to expand your investments.

Definitely a good point. I should just be patient.

Beaglehound wrote: ↑Sat Jul 18, 2020 3:05 pm Well it is making the bank richer but you are preserving its value to a large extent by keeping it there, given the low inflation here.

Yeah, kanto's wife will come out a genius when the market drops 70% next year

RetireJapan wrote: ↑Sun Jul 19, 2020 2:53 am

Beaglehound wrote: ↑Sat Jul 18, 2020 3:05 pm Well it is making the bank richer but you are preserving its value to a large extent by keeping it there, given the low inflation here.

Yeah, kanto's wife will come out a genius when the market drops 70% next year

Considering I am mostly in VT/All Country I hope for the sake of everyone that is not the case.

It would take a Pandemic 2 - Electric Boogaloo... I will knock on some wood just to be sure.