Rakuten Securities has started taking applications for Junior Investment Accounts (they are running a cashback campaign for the next couple of months) with a view to getting ready for the Junior NISA Accounts starting next year.

I presume all the banks and online providers will have something similar.

This is a good chance to start putting money away for children and grandchildren. I opened an account for my granddaughter yesterday, and will be hitting family members up for contributions over the next 17 years :)

I just read a great blog post about stages of employment. Please check it out.

Which stage are you at?

I'm flexible at the moment, and hopefully will be free in 5-10 years time.

How about you? Please post your status in the comments.

The Automatic Millionaire, by David Bach, is a simple approach to personal finance based on a few key concepts.

I believe it should work well if implemented, and I'd recommend this book for people new to thinking about personal finance.

If you already have a handle on things, however, there is not much here for you apart from affirmation: Bach's simple rules will probably mirror what you do already.

Bach's system revolves around the following five concepts:

1. Make sure you pay yourself first by putting money aside as soon as you get paid. Automatize the process to make sure it happens without you having to think about it or take action.

2. Save on taxes by using tax-advantaged accounts. This is perhaps less useful to readers in Japan, although the J401k and NISA can fulfill this role to some extent.

3. Buy a house and pay it off early. I am not sure this works as well in Japan as Bach claims it does in the US, but it's not the worst thing you could do.

4. Put aside money for an emergency. He recommends 3-12 months.

5. Give to charity to contribute to society and feel good.

Nothing we haven't covered here on the blog, but it can be good to reinforce things from time to time and Bach writes well.

The strengths of this book include simplicity, effective advice, and readability. The book is full of memorable anecdotes that reinforce the lessons.

I was unhappy with a few things. 

1. The focus on the US is inevitable, but it means that perhaps 10-20% of the book does not apply to an international audience. 

2. The author uses a 10% annual growth rate in his examples, which is a bit too generous in my opinion. The numbers get quite a bit smaller if you change the growth to 8% or even 5%.

3. The reasoning behind buying a house is simplistic and lacks nuance. It's not always the best option.

Having said all that though, this is a perfectly pleasant book that could completely turn someone's finances around. I recommend it for beginners and more experienced readers who enjoy brushing up on the basics.

Thank you to everyone who answered the J401k survey over the last couple of days.

The results so far are slightly worrying, but not unexpected. After all, the book I read about the J401k said that only around 0.2% of the people who are eligible for the account actually have one!

The RetireJapan readership is doing a bit better than that, but not much.

7% of you have a J401k account, and 20% are not eligible (but this will probably change later in the year and I hope you will open an account). 60% of you do not have an account, and a further 13% do not know what the J401k is (please click here to read about it).

If you are planning to live in Japan until retirement, you pay taxes here, and you pay into the pension scheme, you should probably open a J401k. 

I'll be posting in detail about the application process in October when I finally get to open my own account after the upcoming pension changes.

Please post any questions in the comments below.

Investing in Japan, by Steven Towns, is the best book I have read on investing in Japan. Unfortunately, that isn't saying very much because it is also the only book I have read on investing in Japan.


The book was written in 2012 and is aiming to be an introduction to the Japanese investing environment, as well as an argument to invest in undervalued Japanese companies (a la Graham/Buffett).

I found the book after reading some of this site, which claims to have a good system for finding undervalued (Net Net) stocks, including many in Japan. The site requires a subscription membership (from $125 a month to $500 a year). Seems a bit expensive, but some of the free articles are interesting.

Back to Investing in Japan, though. The good thing about this book is that it provides a fair amount of information about the various stock exchanges, types of Japanese stocks, broad trends in Japan, and investing stories.

The bad thing is that the book is a complete mess, with little structure or narrative. I don't really know what the author wanted to say, which is a shame as he seems very knowledgeable and the stuff he writes is interesting. It's also really dry at times, with lists of financial information taking up whole sections of the book.

A good editor could have transformed this book. As it is I would probably only give it two or three stars.

If you are interested in investing and buying individual stocks in Japan, Investing in Japan might be worth reading. If not, don't bother.

Any good book recommendations? Please leave them in the comments below.

Something for the weekend: a quick poll on the J401k (確定拠出年金).

My university reminded me yesterday about the coming changes to  public sector pensions in Japan.

From October this year, Kyosai Nenkin (共済年金) will disappear, and all public servants will be moved into the Kosei Nenkin (厚生年金) system. Kosei Nenkin is also known as 'salariman nenkin' and is the system that regular company workers tend to join.

There is no paperwork to complete and you don't have to do anything. The process is supposed to be automatic and seamless. Hee hee hee.

This is a fait accompli. It was decided by the Diet a couple of years ago (I coincidentally heard a bit of one of the debates at the time in the car) and to all extents and purposes has already happened, so this is not actionable information.

My impression is that Kyosai Nenkin was better than Kosei Nenkin, as it included a supplementary payment (so contributions were higher) and was ring-fenced, so could be treated differently to the general pension fund. No longer.

However, there are two good points to come out of this. They don't outweigh the bad, but I'll take the silver lining wherever I can find it :)

1. Once you are moved into Kosei Nenkin you should be able to log into the Nenkin website and see all your contributions, generate simulations of how much pension you might expect to receive, etc. If I do that now I can see my previous Kosei Nenkin and Kokumin Nenkin contributions, but the months I have been in the Kyosai system are blank. Being able to check everything is correct and get accurate information about projected pension payments will be very useful.

2. Perhaps more excitingly, once you are paying into the Kosei Nenkin system, and provided your employer does not provide a supplementary pension (mine isn't planning to), you will be able to open a J401k (see link on the site menu for more info). This is very good news, and I will be applying as soon as possible after the changeover.

It took me four phone calls to find out if I would be eligible for a J401k (I called my HR department, the Kyosai office in Tokyo, the Nenkin hotline, and finally the J401k hotline). As far as anyone could tell me, it looks good.

I'll post again once I manage to get an account open. Stay tuned!