Japan is the *perfect* place for FIRE (Financial Independence Retire Early)!
Japan is well suited to be a place to save money in order to retire early. Let me give some reasons:
- The best public transportation system in the world (at a cost) – I don’t say this lightly, but Japan has the world’s best system of public transportation. It is a smaller country, densely packed, and therefore perfect for trains, buses, subways, etc. because it is economical to move a lot of people without cars. It is slightly expensive, costing on average about 300-700 yen for my journeys to places I need to go. However, many jobs pay for the transportation to work. I live in Kyoto now, and Kyoto is *excellent* for walking (see more about that on my Kyoto posts). Therefore, you don’t need to buy a car at all in Japan (unless you live in the countryside or have kids). Think about the car insurance, maintenance costs, fees, upkeep, storage (parking) costs, etc. saved.
- Japan has a cheaper and advanced health care system compared to other countries. I’ve lived in Japan for about 8 years now, and I’ve been to the hospital a few times, mostly for yearly checkups, etc. I had an MRI scan, as well as others and my bill never exceeds $100, with the most costing about 12,000 yen. The service has usually been good, but sometimes language barriers can be difficult. You can bring a friend though to help with this if you don’t speak Japanese.
- Japan is NOT an expensive country (at least it doesn’t have to be) – I know many people say that Japan is so expensive. This doesn’t have to be true. There are many 100 yen stores where you can buy the necessities in life, like towels, silverware, cups, etc. a ton of stuff to choose from.
- Rent *can* be cheap – I live in a shared house in downtown Kyoto. Admittedly it is small, but my total rent with utilities is 50,000 yen, which is about $450. Yes, that includes utilities like water, electricity, gas, etc. Furthermore, I live in the heart of beautiful Kyoto and I walk everywhere I need to go in this city. I can walk to places like the famous Kiyomizu Temple, Heian Shrine, Silver Pavilion, etc.
- Jobs here pay well – especially in the EFL industry, many paying about $35-70,000 after taxes. I currently make at the higher end of that range, so if I save 75% of that, I can really put a lot away. Let’s say you make $50,000 a year, which is typical, then you can save probably $35,000 of that if you are careful (maybe more). Do that for 20 years while investing in Vanguard investment funds, and you are on the path to early retirement.
- Safety and Security – Japan is a very safe country, the safest in the world. That means you won’t have to worry so much about security costs like paying for break-ins, etc.
- The food is not expensive – Japan is often talked about as a pricey country, but it’s much cheaper than the USA in a lot of ways. First, there are no tips. That means that if you do decide to eat out, you can spend $5-10 for a good meal, total. The portions are smaller, which means you will consume less, and that’s good for your health. What’s more, the food here usually doesn’t have as much fat, grease and salt as the food does in the USA. In fact, many people often complain about going to the USA and the food being too greasy, salty and sweet. We have salt and sugar *everywhere* in our diets. We don’t need it.
In sum, it’s very easy to live, save and work here. Moreover, if you have a university teaching job like me, you can get 4-5 months of paid vacation, so you can use that time to make more income or enjoy it in your own way. The students are very nice, and I discuss that in my other postings.
Other good sites on FIRE that have a lot of information about it can be found here and for a listing of other good links go here.
Rian K Davis 