Oh, really?
Yes. I suspect the main reason is a superior design – my Macbook Pro is now 3 years old, but it still runs fast due to less clutter over time than a Windows machine, and frankly it still looks damn nice. I paid ¥220,000 for it at the time, and a quick check on yahoo auctions shows the same model, used, selling for between ¥100,000 – ¥150,000. That’s after 3 years! For comparison, we recently tried to get rid of my fiance’s NEC laptop (built in TV, fantastic speakers, but just a little slow for my tastes and unneeded in our house) – ¥150,000 at the time, again about 3 years ago, but now selling for ¥20,000 on auctions! Shocking! It was probably an ugly computer at the time she bought it too, but can’t blame her for having a lack of style choice I guess. (I do blame her though)

The fact is that Macs depreciate slower than Windows PCs (regardless of the brand), so when the time comes to upgrade you’re going to have lost less of your investment if you purchased a Mac.

There’s also a product cycle guide for Apple products over at Mac Rumors – it gives you advice on whether to buy a Mac based on how into the product cycle it currently is, and how likely it is to be updated soon.

Disclaimer: I guess you could call me a Mac fanboy. I was a bona-fide Apple bashing Windows fan-boy until about 5 years ago, but then Apple released this little thing called OsX and it blew my mind away. Just saying. I’ve played with every OS out there from Irix to Windows Tablet Edition (bet you didn’t know either of those even existed), and Mac OsX is the best.

If you find yourself in a similar situation and you’re not planning on going home (because if you were, you’d be able to claim a lump sum refund of your unemployment insurance premiums), then I suggest you head straight down to your local branch of “Hello Work” and let them know your situation.

Requirements:

1. Be unemployed. If they find you working a part time job on the side, you’ll be made to pay back 3 times what you claimed.

2. Make sure you get a little slip of paper from your employer, as well as an official notice of severance. Mine was mailed to me a few days after I finished. Sorry I don’t have an example to show you now, but it’s an official document that states the reason you have lost your job and just confirms you’ve been paying your unemployment insurance. If you don’t receive yours after a week or so, the staff at Hello Work will be happy to hassle your employer as it’s their legal duty to produce one.

3. Don’t quit. If you quit your job of your own free will, you cannot claim benefits until 3 months after.

4. You must have been working and paying unemployment insurance for at least a year. If you’re employed unofficially and paid in cash, as I have been before, chances are your employer is avoiding the legal requirement to pay your insurance.

5. Make sure you understand Japanese. There are English speaking staff available in major cities, but everything else is in Japanese.

“Going on the dole”:

You need to go to the local hello work (ハローワーク) and tell them you’ve been made unemployed, as soon as possible. You’ll have a short interview when they’ll explain what unemployment insurance is, and you’ll need to fill out a form with some basic details about skills and previous employment. This is not a full resume, that comes later.

If you’re quick enough and you didn’t quit your last job, you will be able to receive your allowance by the end of the month. For my situation, I will be receiving about 180,000. It’s nowhere near what I was earning, but it is certainly enough to live off.

They will also tell you the next date to come to an explanation meeting. It’s quite a boring affair and all in Japanese, and it really doesn’t explain anything too important but you have to go. They will give you another form and the date of your next interview. On the form, you will write at least 2 things that you did to help your search for work before the next meeting. Today’s meeting, by the way, counts as one, so make sure you write it down. Another example might be signing up with an outsourcing company, or simply coming to “hello work” again to look for work and write your Japanese resume.

My next meeting is scheduled for October 1st, during which I present the paper which says I’ve done at least 2 things to look for work, and they will approve my next allowance and set another meeting.

I’ll keep you updated, and please feel free to ask questions if you’re unsure if you are able to claim benefits, as I’ve been researching this quite a bit now.

Firstly, you’ll want to download and fill in this R105 form which says you shouldn’t pay tax from now on – and mail that to your bank or building society. Note that not all banks will allow you to not pay tax.

Next, find your financial records for all the years past that you’ve been living here in Japan and still paying tax back home. You can claim for up to 5 years of past tax deductions. You’ll need to fill out a separate R43 Tax Repayment Claim for each year, and the forms vary slightly by year. You can find them all here though. Send this to the inland revenue.

Easy 2 or 3 man in your pocket, and gross (no tax) interest on your savings in the UK from now on! What are you waiting for?

Oh, and if you’re wondering about the cheapest way to send money to the UK to earn that interest (with an infiinitely better rate than the 0.2% or whatever chump-change you’re offered here in Japan), then I suggest you check out GoLloyds. They charge a maximum of 2000 yen fee no matter how much you send back! And if you wouldn’t mind when you’re signing up please write “JAMES ANDREW BRUCE” in the referrer box, which will give me 2000 yen credit towards my next money transfer! Thanks!

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After lots of requests for information on investing while in Japan, I’ve decided to write a very basic introduction. This time I’ll be looking at managed funds, which is probably the easiest way to get a good return on your spare income with minimum of effort over a long term. Of course, there are other investment options – stocks, foreign exchange trading – but they require far too much effort and you’re just as likely to lose money unless you really know what you’re doing.

THE ABSOLUTE BASICS:

A managed fund means you pay money into your fund every month, usually a minimum of around 40,000 yen. When you start your investment, you must choose when your investment will mature – for instance, 5 years, 10, 25 years. You can however make regular withdrawals from the fund before the maturity date (but not recommended). You must make minimum payments every month for at least 18 months from the start – after which you can adjust the payment amount, or take a short break, or start to withdraw money. So if you know you’re going to be teaching English for at least 2 years, now would be a fantastic time to start. That’s the basics.

START NOW:

The most important thing is start investing early.

If your 20-25 years old, this may seem a little ridiculous to think about finances and totally something you can leave until later, but if you want to be financial secure later in life then start now – you too can be a millionaire if you just start investing that money now and get a head start on the rest of us. Have you thought about totally awesome it would be to be able to say you’re a millionaire by the time you’re 40 – well that’s really not such a crazy preposition once you look at the numbers.

For my age group, 26-30, you probably already feel some impending sense of doom that you’ve managed to save up very little money over the last 5 years of life, and even if you have saved something up then keeping it in the bank here is less than worthless (in fact, your money is just slowly losing value on a global perspective), so it’s about time you think damned seriously about some lifestyle changes and definately start investing now.

If your over 30 and still not investing, then you’ve missed out on a lot of compound interest that you could have made if you’d started earlier, but luckily you should be earning more than these young’uns so your best bet is to start investing now with a higher amount each month.

Either way you look at it, you need to start now.

“The most powerful force in the universe is Compound Interest” – Einstein

The key point about starting early is the concept of compound interest. If we assume we’ll be making a certain profit on the money we invest, then each year that our investment is sitting there it will be earning interest on the money we put in (the principal) plus the interest we earnt last year. So let’s say you put 10,000 into your investment fund right now, and just left it at a rate of return of 5%, for 50 years~ that 10,000 would have transformed into 115,000 yen when you took it out 50 years later! The power of compound interest!

Let’s look at a more concrete example, using 8% – a fairly standard rate of return for a managed fund investment.

I invest 50,000 yen per month from age 21 for a total of 10 years. After those ten years, I just let the investment sit there until I’m ready to retire at age 41 (!).

My hippy friend who frivolously spent his 20′s touring the world, playing in a band and drinking various beers decides that finally, at age 31, that he should probably start thinking about his fincancial future and invest. With a good job he can afford 100,000 yen per month and is also hoping to retire at 41.

As we both reach age 41, my investment is worth 20,300,000 yen. His however is only worth 18,700,000 yen. Even though he paid twice as much as me into his investment for the same amount of time, I’m 2 million yen better off. Read that again if you need to.

Of course, if this were a real world example I wouldn’t have stopped after 10 years. More likely I’d have kept investing 50,000 yen a month for another 10 years, or even more if I could afford it. In that case, when I hit my 41st birthday my investment would be worth a cool 30 million yen, even though I invested the same total amount as my friend.

The point is that aren’t many things in life that make you money just with the flow of time. An investment is one of them, and the most important thing is to start early!

WHAT ABOUT THE RISK?

There are so many risks involved with investing, that’s why you have to sign things that say your investment may decline in value as well as increase! It’s a fools game – you’re better off putting the money in a box under your bed!

Whatever. I’ll be totally honest here and tell you that right now, in this horrible economic climate – my investment is actually worth less than the amount I have paid in. But do I care, am I worried? No – not one bit, because in the long term all these minor economic “crisises” fizzle out. When the economy recovers again, my investment will recover with it. A lot of people will pull all their money out at this point – cover their losses and run – but that’s about the stupidest thing they could do. That’s why you invest over a long term. The cycles of economic ups and downs always correct themselves as history as shown time and time again.

Unfortunately – despite what critics think – the same is not true for the current environmental crisis. Global warming is happening and it is not simply a natural cycle – which is exactly why I choose to invest my money in clean energy developments!

THE POWER OF INVESTING IN A FOREIGN CURRENCY:

In fact, my investment is doing even worse now because of the fact that it’s in American dollars! “What a stupid decision that was!”, you might think – but not so. In fact, any clever frugalista will realise that right now the dollar is cheap, and my yen can purchase more dollars to put into that investment than it could last year – so if anything, now is the time to pay MORE into my investment account! Do you really think the dollar won’t recover in the next 20 years? At which point, I will have made even more profit by leveraging the power of investing in a foreign currency while it was cheap! On the other hand, if the yen ever devalued to something ridiculous, I could just reduce or even stop payments until it recovered again.

YOU MENTIONED CHOOSING FUNDS?

Yes – the type of investment I’m referring to here is called a managed fund. This is where you allocate your money to a particular fund. That fund, or pool of money, is managed by someone who chooses where to invest it – given the objectives of that fund, the level of accpetable risk and the likely return. Each fund will perform independently, so the more funds you distribute money to then the safer your investment will be. Each fund has a certain level of risk – high risk funds could make as much as 15-20%; medium risk around 10-15%; and low risk about 5%.

Personally, I want to make sure my money is invested morally – so the majority of my fund goes to high risk emerging energy technologies and biotech industries. Despite being high rish, I believe that it was a morally good choice to support renewable energy and I believe that in the coming years those industires will boom. Land or gold based funds or usually fairly safe though.

You don’t really have to do a lot of research when you start investing – just check the current list of funds on the website and pick out some that sound appealing to you for whatever reasons you have. You can redistribute your funds at any point at no extra charge if you change your mind.

Oh, and one more thing. If you make your investment payments through your credit card, you’ll be getting an additional 0.5-1% back in cash or points! For me, this works out to about 10,000 yen free every year, which I can then re-invest!

And that’s pretty much it. Bear in mind, I’m no financial manager. But, I do know that getting your finances in order and beginning your investment right now are the keys to being financial secure later in life. I would like to recommend my personal investment manager Matthew Murray, who writes the financial column for the Hiragana Times, so if you’d like to get in touch with him directly please drop me an email or use the form below and I will forward your details onto him. If you have any questions you think would benefit everyone, please write in the comments section too! Thanks~

Yes, the truth is out – the frugalista does not budget, because the frugalista does not need to. Being frugal is state of mind, man~ Being frugal is not about budgeting, being cheap with your money, or holding back on the things you enjoy. It’s not about cutting up your credit cards either – I have 2 Japanese Visa cards and some from my account in the UK too. No – it’s about setting up your finances so that everything is automatic and all that’s left is for you to enjoy life and make the most of your time here in Japan.

A few days after payday, my rent is automatically transferred. My credit card balances are automatically paid in full every month. My investment is automatically deducted and placed in my offshore fund. Another deduction is automatically placed into my savings account. Anything left is for me to spend that month, guilt free on whatever the hell I want. And I can check my balance online, anytime I want, with an itemized bill at the end of each month for what I spent on my credit card.

There are a couple of key ingredients that you need in order for this to work though.

1. You need a bank in Japan with online banking. I’ve recently joined Shinsei bank, and with it’s online ENGLISH banking it’s by far the best in Japan, especially compared to the likes of Kyoto bank which is possibly the most backward Japanese banking institution I have ever had the displeasure of dealing with. They give you a free transfer each month in the basic account and free withdrawals from 7-11 ATMs – what a unique concept, eh? Free withdrawals at ATMs, crazy I tell you! If you come here on the JET program as I did, do not allow yourself to be goaded into the nearest Japanese bank for the sake of convenience for the Japanese guy who got the lame job of guiding the new gaijin around town. As soon as you can, get a decent bank account set up and start automating your life.

2. You need a credit card – a Japanese credit card. I wrote about this before, and I still think it’s hard for foreigners to be approved for a credit card when they first come to Japan, but some readers were adamant that it was easy. Ask your bank after you’ve had a few months with them, and always apply for the lowest amount of credit with the “don’t need cashing” option. Never, ever, use your credit card to get cash out at an ATM – you will start paying interest on that money immediately and it will harm your credit score.

3. Start investing and do it automatically, every month that you are here. If you’ve come to Japan right after college then chances are you really aren’t thinking about mutual funds and investment portfolios and such, but the truth is that the next 3 years of your life you’re likely to have a cushy, well paid stable job and you may as well take advantage of it to start investing. Most new millionaires are not rich by starting their own business or winning the lottery, but simply by starting their long-term investment when they were young and keeping it automatic. Here’s some figures taken from the most wonderful book I Will Teach You To Be Rich, which I highly recommend:

Smart Sally invests $100 a month, starting at age 25, for just 10 years. With an 8% rate of return, by age 65, her investment is worth a whopping $350,000. Dumb Dan invests the same amount ($100 a month), but starts when he is 35 – and he continues to pay that much every month for 30 years! At the same rate of return, at age 65, his investment is worth just $270,000. Even though he invested for 20 more years than Smart Sally, he’s still $80,000 behind!

If you take nothing else out of the matsuri this month, which would be frankly impossible, please at least start investing. I have a wonderful investment manager who answers all my questions, and if you’d like me to put you in touch with him personally please just drop me an email and I will forward your details on. He would be more than willing to chat to your on the phone or answer your questions via email about investing – and I know you’ll thank me when you retire early and can enjoy yourself without financial worries later in life. Getting rich is not a quick thing – it takes real planning and the most important thing is to start investing today!

4. You need to be aware of your fixed expenses each month. Fortunately as long as you don’t go crazy with the aircon on all-night or talk incessantly on your keitai, your utilities are going to be fairly similar every month. Work out roughly how much of your fixed income will be deducted each month and then you’ll be able to work out how much you should be automatically investing, saving – and what’s left after all of that. Here’s a general plan of conscious spending, and how much that breaks down as for the typical post-tax ALT income of ¥250,000 a month:

50-60% Fixed expenses – this includes rent, student loan payments, utilities etc. (¥125,000-¥150,000).

10-20% Saving – for big events, vacations, emergency fund, moving house fees. (¥25,000-¥50,000)

10% Investment (¥25,000)

30% Guilt-free spending and charitable donations (¥75,000)

If you can’t survive on only ¥75,000 spending money each month, you really ought to readjust your lifestyle and reevaluate what you consider to be worthwhile of your time and money.

5. Never spend more than you can afford. You don’t have to track your expenditure daily or limit yourself to 500 yen for lunch, you just have to keep a track of the major things you spend and bear in mind all the little things are going to add “a bit more” on at the end. The fact that you’re going to use your credit card to do this, and that you’re regularly saving some money, means that if you get the bill and you’re going to be short this month then no worries because you’ll still have time to shift money from your savings to your normal account, all of which can be done easily online!

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