Hello, this is Pooh.
Today, let’s consider the merits of pursuing FIRE in Japan.
There may be many advantages to aiming for FIRE in Japan.
The catalyst for this realization was when I came across the following tweet:
— KEN＠FIRE生活しています (@ochiken_FIRE) May 14, 2021
“Living in Japan, a safe country with low living costs, where I can speak my native language, and continuously grow while investing in the selected 500 companies, and living off the wealth that overflows from there. In simple terms, invest in the S&P 500 and live in Japan. I am convinced that it is one of the optimal solutions.”
KEN, living the FIRE lifestyle (@ochiken_FIRE) May 14, 2021
In our country, Japan, we often hear doubts and concerns about its future prospects. However, from a global perspective, there are few countries where one can live comfortably and securely like here.
Of course, there are also issues, but with the right mindset and ingenuity, it might be possible to enjoy many benefits while living in this country.
Today, let’s take a fresh look at our country and reflect on it.
Japan is a country with low cost of living
As mentioned in my recent blog post, the prices in Japan have remained relatively unchanged for the past few decades, maintaining a stable situation.
On the other hand, prices have been continuously rising in other advanced and developing countries around the world, making Japan a “relatively inexpensive country” in comparison.
In fact, one of the factors that contributed to the increase in tourists visiting Japan before the pandemic was its affordability.
By being mindful of how you spend your money, you can keep your living expenses under control.
Even though my take-home salary is not particularly high, I am still able to live a reasonably comfortable life.
I believe it would be challenging to maintain a similar standard of living with the same take-home salary in other advanced countries.
In that sense, Japan may be seen as a unique existence.
Japan is a country where you can lead a comfortable life
On the other hand, I believe that Japan is one of the countries where we, as Japanese people, can live a comfortable life.
As mentioned in the tweet by “KEN, living the FIRE lifestyle,” Japan has a good level of public safety, and everyone can live with peace of mind by simply exercising basic caution.
Moreover, even in a situation of continued low prices, the services in Japan are all top-notch. Whether it’s convenience store bento boxes or sweets, they offer high-quality products that can rival specialty stores. Even chain restaurants provide satisfying meals at affordable prices no matter where you go.
You can find high-quality clothing at places like Uniqlo and GU. Stores like Nitori and IKEA offer low-priced, high-quality furniture.
Medical expenses are covered by a 30% co-payment system, and if you have high medical expenses, you can significantly reduce your out-of-pocket costs by utilizing the high-cost medical expense system.
Furthermore, Japan is a country where you can live using your native language, Japanese.
In the past, it was common to think of “long stays in low-cost countries like Southeast Asia,” but now I believe that Japan itself has become such a low-cost country. The significant difference from other countries is that the quality of services is consistently high, providing an environment where you can live with peace of mind, which is rare in the world.
One major issue in Japan is the lack of wage growth
Typically, wages tend to rise in response to inflation.
However, in Japan, we have not seen significant price increases, which has led to stagnant corporate earnings and a lack of wage growth.
Factors such as aging population further compound the issue, leading to pessimistic views about future prospects and an increase in voices considering moving abroad.
I can understand the perspective behind such concerns.
However, when it comes to income, it’s important to consider not only labor income but also opportunities for additional income through side jobs and investments. We no longer need to rely solely on the country we live in.
Flexible work arrangements and increased opportunities for side income have become more prevalent. With the proliferation of the internet, as long as you have a computer and Wi-Fi, you can work from anywhere. My ability to write a blog is one example of this.
Even if your salary doesn’t increase, successfully pursuing a side job can alleviate income-related concerns. Additionally, people living in Japan now have easier access to investing in rapidly growing markets like the United States and China.
By investing in index funds like the S&P 500, you can expect a stable return of around 5%. This allows you to benefit from the growth of economies while living in Japan.
In other words, even in a situation where wage growth is stagnant in Japan, it is possible to overcome income and asset formation concerns by increasing income through side jobs or investments and investing in countries with growth potential.
My optimal solution for me
After considering everything, here is my optimal solution for myself at the moment:
- Live in Japan, enjoying its safe and comfortable environment.
- Earn income from both my salary and side jobs, diversifying my sources of income.
- Invest in advanced countries to benefit from their economic growth and build wealth.
By taking advantage of Japan’s benefits such as safety, low cost of living, and the ability to use my native language, I can live a comfortable life.
I will alleviate income-related concerns by earning income from both my primary job and side jobs.
Furthermore, by investing surplus funds in financial instruments that are expected to experience economic growth, I can increase my assets and prepare for the future.
I believe that by maximizing the advantages of living in Japan and aiming for success in both income and asset formation, I can achieve my goals.
Maximizing the advantages of living in Japan while seeking asset growth through investments in advanced countries.
It is important to remain flexible
Of course, this optimal solution is not absolute and there may be even better ideas out there. Personally, I am also considering the possibility of moving abroad again in the future.
The world is rapidly changing due to technological advancements. Previous norms can be overturned, and Japan itself may become a strong economic power or, conversely, a developing country.
Society may require people who can think flexibly and adapt to various ideas and actions in order to survive.
That is why it is important to embrace different perspectives and take proactive actions.
Even I may change my mind tomorrow! (laughs)
Therefore, let’s approach life with flexibility and be prepared to adapt to changes.
In Japan, there is a situation where both prices and wages are not rising, leading to a pessimistic outlook. However, there are very few countries in the world where you can enjoy such a comfortable life. While it used to be common to consider retiring in Southeast Asia due to lower costs of living, a similar lifestyle can be achieved in Japan. Furthermore, Japan provides the best environment in terms of services and public safety.
Although there is an issue of stagnant income for employees in Japan, there are opportunities to invest worldwide and steadily grow assets. In my case, I aim to lead a comfortable life in Japan, earn a stable income as an employee, engage in side businesses to increase my earnings, and continue investing in advanced countries like the United States to grow my assets.
The norms of the world and society are constantly changing, so it is important to be open to different perspectives and adapt accordingly. While many people have a pessimistic view of Japan’s future, I myself have considered living abroad in the past. However, by exploring various ideas, I realized that there are multiple choices available. I have shared these insights, and I will continue to document any new realizations that may arise.
Thank you for reading until the end.