Although the yen has just appreciated, it is still weak, so I am going to write some financial advice for rich people who are planning to move to Japan. Here are the basics of living.
Let us assume that you are an American with $1 million. (Even if you don’t, use it as a benchmark to multiply or divide by.)
If you are permanently moving to Japan, you should not take much currency risk because your future spending money is in yen. You should invest in Japanese domestic industries, real estate, and J-REITs. In the case of stocks, there are many stocks related to domestic demand, such as banks, food, real estate, transportation, insurance, etc., that are sold on the TSE with stable profits and high distributions.
For example, if you invest $1 million in a J-REIT, at 140 yen to the dollar, you will receive 1 400,000,000 yen. The current dividend yield is about 3.7% per year on average for the index, and the distribution amount is 5.18 million yen. Assuming you paid the 20% dividend tax to the Japanese government, you would have 4.14 million yen left over. Taxes are really limited to what else you pay anymore. Don’t be surprised.
4.14 million yen per year is 345,000 yen per month. You can rent a beautiful 200 square meter detached house in the countryside that is about 20 years old for 100,000 yen per month. The electricity bill is also about 20,000 yen even if you use 600kwh. The water bill will be a few thousand yen, and the gas bill will be a few thousand yen. You can buy all kinds of groceries at budget supermarkets. Even if you eat a lot of delicious food, your monthly food expenses will not exceed 100,000 yen.
The cost of optical fiber for the Internet is 5,000 yen per month, and the installation cost is usually around 20,000 yen. It does not cost anything in places where wiring has already been done. Some companies are offering free of charge campaigns. (NTT provides optical fiber to consumers by wholesaling it to various businesses.)
If you get furniture and appliances at Second Street or Hard Off, it will not cost 200,000 yen even if you fill up a large detached house.
About cars. Gasoline is a little over 150 yen per liter. If you use the Internet, you can get voluntary car insurance for about 30,000 yen a year, and a good used car can be bought for less than 10,00,000 yen. If you have a parking space at home, you can drive a luxury car for about 300,000 to 400,000 yen a year(10,000 km per a year), including taxes. If you drive a light car, it would be about 150,000 yen per year; if you drive 20,000 km, add the cost of gasoline more.
Japan provides a universal health insurance system, and medical services are available at 30% to 10% of the cost. There is a high-cost medical care reimbursement system, and the maximum co-payment is limited to about 50,000 yen per month. It is also possible to be recognized as an inhabitant tax-exempt household if only you paid the earlier 20% dividend tax, and the maximum co-payment is 15,000 yen per month.
Even if you manage $1 million conservatively, you can do well in Japan. Hypothetically, I used J-REITs in the calculation, but if you diversify into high-dividend domestic demand stocks, the risk will be reduced and your take-home pay will increase by another 2 million yen. Why don’t you come to Japan and enjoy your life?
(There are various ways out of inheritance tax, so please consult an expert.)
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