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L / RAIN

Ben Tanaka still vividly remembers the catalyst that drove him to launch his website, RetireJapan, in 2013.

“The specific incident that caused me to register a domain and write the first blog was a conversation with my friend,” he recalls. “He entrusted his retirement savings to a company in Tokyo, and after talking to him about the details, I was furious. I went home and set up the site that evening.”

RetireJapan – the English-language portal it runs offering personal Finance information to foreign residents – is an important but complex issue. Even before the conversation with his friend, the topic of Finance was already weighing on Tanaka’s mind. Originally from the United Kingdom, he has lived in Japan since 2000 and works as an English teacher in Sendai. Three incidents in particular made him think seriously about his own situation.

“I got a legacy and blew most of it without thinking about it very deeply,” he recalls as the first incident. “I lost my job in no time and had to fight to keep food on the table and pay rent and then our family ended up evacuating temporarily after the 3/11 earthquake, tsunami and crisis.”

The great East Japan earthquake of March 11, 2011 hit Sendai hard when It was near the epicenter of the coast of the Eastern Tohoku region.

In the six years since he started the site, Tanaka has been learning about retirement issues along with his readers, adding that the relationship he has with them is very much a two-way street.

“At first I just wrote about things, I learned about how they came, but lately most of my posts come from questions I get from readers or from coaching clients,” he says. “I usually do some quick research online or sometimes read books to find accurate information – which takes me about 10 times as long to do in Japanese as it does in English.

“Often our readers will correct me when I make a mistake or misunderstand something. We have an incredibly knowledgeable and supportive community on RetireJapan.”

Although most of us know deep down that we need to take action on our financial situation by knowing and doing two different things. So what does Tanaka think is holding us back?

Tanaka’s best advice? He says to “choose one thing to take action and just do it.”

“Allow yourself to succeed (on the one hand). Once you are comfortable with that, choose something else and do that. Take things slowly, ” he says. “If you are new to investing, start by investing a small amount. Personal Finance is really like fitness in this regard. Small, sustained changes in your daily habits are much more likely to lead to success than big ambitious plans that don’t get stick.”

Outsourcing personal Finance management to a professional is one option, and it can seem especially appealing when living in a foreign culture. Based on his reaction to the aforementioned incident with his friend in 2013, it’s probably no surprise that Tanaka advises caution before entrusting his money to the other side.

“In General, you need to know how the person you’re talking to is paid,” he says. “The best situation is when you pay them directly for advice, such as with an independent financial planner. There are several conflicts of interest in this situation, so you basically have to be concerned about whether the person is giving you effective advice.

“If you’re talking to someone who works for a Bank or insurance company, then they’re more likely to prioritize their employer over you, recommending products that are beneficial to the company but perhaps too expensive or not suitable for you.

“One of the riskiest situations is when you’re dealing with someone who promises you free advice that actually works on a Commission. Then, their incentive is to recommend products that pay the highest commissions, which tend to have the highest fees and therefore the poorest rates .”

According to Tanaka, the only viable solution is to educate yourself a bit before making any decisions, and he says anyone can come to the Retijapan forum for advice.

“We have a very friendly crowd out there who know what they’re talking about – and like random strangers on the Internet, There are no conflicts of interest,” he says.

Tanaka notes that the main audience of RetireJapan are probably those in their 30s, 40s and 50s.

“The key things for them to know about personal Finance is that they may need to learn and work, and start saving and investing at least 10 percent to 30 percent of their income,” he says. “In a way, being competent in personal Finance is like a superpower; one with the potential to improve all other aspects of your life.

“The funny thing is that personal Finance did right is deadly boring – it makes watching paint dry look interesting,” he jokes, adding that this aspect is exactly the point. “Once you’ve sorted out your finances, you should go and do more interesting things with your life rather than thinking about money all the time.”

Many people can benefit from implementing some or all of the steps below, preferably in order (visit RetireJapan.com for a more detailed version of this checklist):

Understand your financial situation: do you Know how much money you earn, spend, save, pay in taxes or spend on coffee? It seems simple, but many people do not have this information at hand – and you may be surprised after tracking your spending for months.

– Live within your means: spend less than you earn. It sounds simple, but many people do not do this. It’s non-negotiable if you’re hoping for financial security.

Debt repayment: If you have debt, especially high interest debt, pay it off. This is an emergency and should be treated as such.

Create an emergency Fund: you need cash set aside for emergencies. This should be enough to pay for unexpected expenses such as flights home for family emergencies, car problems, illness or unemployment.

Nekin payment (pension): Paying into a pension system is a legal obligation in Japan, and also a good idea as it comes with several perks.

To obtain the right insurance: don’t pay for insurance you don’t need. Make sure you have enough coverage that you need. Don’t buy products that combine insurance and investment.

Invest for the future: Start investing in investments that produce money, either through capital gains or through cash flow. Don’t keep all your savings in the post office.

Choose the right accounts: Japan has some great investment options like iDeCo, NISA, and tax withholding accounts. Learn about them and pay less taxes.

Stay the course: Once you establish good financial habits, continue to invest and increase your contributions over time.

Future plan: make Sure you take steps to ensure your family is OK if something happens to you. Make a will and make sure people have the information they need.

For more information about retirement in Japan, visit www.retirejapan.com.

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