The website is http://www.toner.jp.

Recommended by SY on the Frugal Japan mailing list.

by David Bach
Recommended by Natalia Roschina (http://www.health-for-all.com)

I have just finished reading this, and it has changed my life. I have not bought “Smart Couples Finish Rich” yet by the same author, but I guess it is the one for couples to read.

No matter how frugal you are, go and buy it if you want to change your attitude towards money.

I got richer even before I finished reading it. How? I started paying myself (before I pay my staff) instead of constantly investing my salary into the business. Wow! Regardless of my company’s situation, I can now finally afford to redecorate my house without feeling guilty!

by Seth Godin
Recommended by FU

This is not a money book in the sense of being about money, but it is a money book in the “money quote” sense.

Basically, he says you should be doing what you want to be doing and the way to get to do it is to be a leader. This does not mean you have to be the CEO or anything. Just be a leader of a group of people who want to move in basically the same direction. How do you find them? By being a leader. And there are lots of tips on how to do this, but not THE ANSWER answer — since the answer varies depending upon the specific situation.

Have given my copy to my son and bought copies for a couple of friends whom (I think) need encouragement to exercise their leadership abilities — this in the hope these people will be happier, more productive, and hence better off as a result. If you know somebody like that — if you _are_ somebody like that — this would make a nice present.

Frugal Hive says:

Answer 1

If you have any assets abroad, you might consider using a lawyer who is familiar with international law. There is a list of lawyers who speak English on the American Embassy website. If you’re not American, you might ask your embassy for a referral.

You might consider hiring a lawyer close to your age, so as the years go by, you can continue to get advice from a perspective close to your own — this is true when selecting a financial advisor, too.

Answer 2

If you are talking about a home that you bought here in Japan, you could set up your will through the koushou yakuba. They will ask you about assets abroad, but only to determine how much to charge for their services for writing up the will. The more assets you have, the more they charge you for their services. You may want to think twice about how you handle that.

If you are talking about planning for assets abroad, and want to include both your Japan and US assets in one trust, you may want to go the international attorney route.

It may be easier and cheaper to have one trust for your US assets written by a US attorney (int’l or not) and one trust/will for your Japan assets written here by the local koushou yakuba.

If you have business going on abroad (at least in the US), for example, a rental property, and find you may need legal services from time to time, I would recommend joining PrePaid Legal Services. Their direct marketing agents sell the memberships, but just go through their corporate offices in Oklahoma.

Frugal Hive questions and answers are taken from the Frugal Japan mailing list. If you have a question about living frugally in Japan, subscribe to our list and ask the Frugal Hive!

I learned a lot over my last three months in Japan, and fully intended on making a very in-depth report on how to dispose of one’s items and move frugally. Unfortunately, my move ended up being not very frugal, despite my best efforts. I did find out two very important things, however. One is very specific: used air conditioner/heaters (aircon) are essentially worthless! You cannot sell them, you cannot give them away without causing the recipient great cost and trouble, and even recycling them is expensive (Y50,000 for me to uninstall and recycle three used air conditioners). Your best bet: leave them with the apartment, if the landlord will let you! OR take them with you to your new home.

The second thing is much more general, and rather clichéd: You can’t take it with you. Your stuff, I mean. Really. Not anywhere. With rising gas and commodity prices, shipping goods is more expensive than ever. For most things, buying it in your home destination would be cheaper. Unless it is of sentimental value, I suggest finding a good home for it. We brutally weeded out our possessions for three months and were still shocked at how much stuff was left in the end. Do yourself a favor: don’t collect the stuff to begin with. Buy sparingly and smart, and routinely inventory your possessions. If you haven’t used it in 18 months, chances are you probably won’t again. The night before we left Japan, I sat surrounded by five suitcases holding (literally) all my worldly possessions not in a small container crossing the ocean. And you know, it was very freeing. Watching the American economy slide into a recession and the inevitable layoffs beginning (I have great timing when I move!), I am struck by the fact the we really never do know *what* will happen to us in the future. Instead of surrounding yourself with stuff, collect experiences, friends, and love—it’s much more portable!

© 2008 Wendy J. Imura.

Practically speaking, it works like this: Sellers of securities like stocks, bonds, forex savings schemes, and other investments are now required to provide (at least once a year) clear explanations *on paper* of how their products work and the risks involved. Sellers must also ask clients what the purpose of their investments are (growth, savings for retirement etc), and are also obligated to be forthright in advertising these products as to the possible risks investors face (i.e. they might lose money!) in purchasing them.

This all emerged out of both the 2006 Livedoor scandal and a string of fraud cases involving elderly and/or other unsuitable investors being sold questionable products that clearly didn’t meet their needs, resulting in many billions of yen in losses. I personally heard the sad story of an older ‘friend of a friend’ who lost close to 10 million yen in foreign exchange options trading, which someone told her was ‘guaranteed’ to make money. Options trading, a rather complicated investment vehicle, is certainly not where a beginner should start.

So, where should a beginner investor look to put their money? What is safe? What has the best long-term performance? One of my favorite websites, Get Rich Slowly offered some excellent advice on the subject which can be boiled down to one word: indexing.

What is indexing? Essentially, this means placing your money in funds (or a portfolio) that track a particular target index, which is called a benchmark. The fund simply aims to achieve the same performance as the benchmark it tracks. Suppose, for example, that you want to invest in US stocks. You have a few choices:

(1) you can research one of the thousands of companies listed on the New York Stock Exchange and other markets,

(2) you can choose one of the tens of thousands of actively -managed mutual funds (i.e . you pay a fund manager to actively invest the money for you),

or

(3) you can buy an index fund which tracks a typical US stock index (such as the Standard & Poor’s 500). If you chose the latter, you would not only save money in fees (on average, you pay 3.1% *more* for actively managed funds), but may also enjoy better returns over the long-term.

For some extended reading on why, take a trip to this 53-page PDF file.

(Yes, I’m asking you to read [or at least skim] a 50+ page document on investing. Why? If you are serious about making money investing in a simple manner, you’ll have to do a little research. Most people, interestingly, spend far much more time investigating their next PC or car purchase than their investments.)

After reading up on indexing, doing some financial planning, and determining your desired asset allocation, it’s time to start shopping for funds. If you have a US address or bank account, you can most likely set up an online brokerage account and purchase one of the funds recommended in Transparent Investing file. I recommend this approach, from a tax perspective, for US citizens. If you do not have this access, then you can ask your local broker to find you an index fund that tracks either a Japanese index (there are many Nikkei 225 or TOPIX ‘rendogata’ funds) or one for an overseas market. The term ‘index fund’ is known in Japanese in its katakana version (indekkusu faando), or is sometimes mistranslated as ‘toshi shintaku’ (which is the general name for an investment trust). Be sure and specify what you want!

If you are interested in the Vangaurd Funds listed in the PDF, check out Monex Securities. It is, apparently, the sole distributor of Vanguard Funds outside of the US, and offers a small cap index and total stock market index fund. It is a Japanese low-cost online stock brokerage that also offers a full range of other investments. Regrettably, there appears to be no English language support.

Those using this information for investment purposes do so at their own risk.

© 2007 Wendy J. Imura.

First of all, did you know that aircon alone account for over one-forth of all household electricity costs in Japan? Yep. It’s startling but true, according to Japanese frugal guru Yuki Wada.

The simplest way to cut aircon costs is to adjust your temperature settings. Most typical aircon units in Japan have a small remote control that can be used to change the settings. Typically, the temperature settings resemble little “up or down” arrows. Wada says that simply upping the temperature setting on your unit by one degree can cut electric costs by 10%! The ideal summer temperature setting for aircon is 28 C. Apparently, any difference in indoor vs. outdoor temperatures of greater than seven degrees Celsius can cause discomfort, chills, and even headaches – in addition to costing more money! So, first things first – set your AC to 28C!

The second variable to look at is the direction and strength of airflow. If you can’t find these settings (labeled with the characters for “wind direction” [風向] and “wind amount” [風量])　on your remote, check the inside panel. Wada recommends pointing the air upward, as air flowing downward tends not to circulate. Pressing the direction button, you’ll notice the little vents on the aircon unit change direction – put them at the top angle. For airflow strength, she recommends the automatic setting (jido unten) which automatically adjusts airflow based on temperature. Using a fan in addition to the AC (fans are very low-cost items – only Y100-Y150 in electricity usage for one month’s use at 5-6 hours/day) is also a good way to keep the air flowing.

There are some other, simple measures you can take as well. One is using curtains or blinds to limit the heat that can enter a room. Another is making sure the aircon’s external unit (that big hulking machine located on your balcony or in your yard) is not exposed to direct sunlight. An exposed unit can make it difficult for the aircon to exchange heat effectively, wasting electricity. While directly putting a cover on the unit is inadvisable, Wada does recommend ensuring that the external unit gets proper shade.

An additional point is making sure the innards of your aircon are clean. Wada recommends cleaning the aircon filter at least once very two weeks. You can typically remove the filter by popping open the vented front of the aircon. After removing it, softly brushing the eyes of the filter with a disposable toothbrush while using the vacuum (hose) to suck up the dirt is one effective method (click here for a picture).

Finally, you can have the inside of your aircon professionally cleaned. Typically, these services are rather costly (from Y10,000 per unit). Duskin is one reliable provider. Recommendations vary, but cleaning every two to three years is a good bet. After several years of use, the aircon traps dirt, allergens, dust, and mold, both reducing its cooling capacity and creating “dirty air” forced out through the vents. If you’ve never had your aircon cleaned and find yourself complaining of allergies or a sore throat, you might need to look into this. Note that appointments are typically necessary for this service. (Duskin Aircon Cleaning)

If none of these measures help cut your aircon bill, then you might need to rethink the aircon itself. New models are twice as energy efficient as those from a decade ago, and the extra Y30,000-Y40,000 required to purchase a low-price model might actually save you money over the long run. Of course, the simplest way to cut aircon usage is… not use it at all. “When in doubt, turn it off.”

(This article borrowed heavily from the ever-frugal Yuki Wada’s AllAbout.co.jp Setsuyaku & Yarikuri site’s Aircon Setsuden No Kotsu! (Tips on Cutting Aircon Electricity Costs) article from July 14, 2003.)

© 2007 Wendy J. Imura.

While turned off by typically overboard, American application of an otherwise worthy ideal, I was set to thinking by a quote from Bob Torress, a US sociology professor, who thinks that environmentalism “is becoming this issue of, consume the right set of green goods and you’re green, regardless of how many resources are used to distribute and manufacture the goods.” He also added that “If you ask the average person what can you do to reduce global warming, they’d say buy a Prius.”

With the recent spike in oil prices driving American retailers like Home Depot to offer environmentally-friendly products like a so-called “green chainsaw,” one has to wonder if Japan will not be far behind. I do think Japan is seeing a more determined shift to greener policies. A new law enacted in April mandates reduced packaging on consumer goods and offers retailers incentives for cutting the use of plastic bags. But at the same time, we also see greater media attention devoted to the logical backlash of somewhat misguided environmental policies.

Take Kunihiko Takeda, a professor at Nagoya University who made a big splash with his recent best-seller “The Lie of An Environmental Problem” (Kankyo Mondai wa Naze Uso Ga Makari Tooru no Ka, Senyosha). Takeda makes some startling claims – for example, that recycling certain products (such as PET bottles) actually generates more energy waste than it saves due to high costs and limited uses for the recycled plastic. He also states that reducing the use of plastic bags for packaging will actually hurt the environment, as purchases of new “reusable” cloth, plastic, and other bags will consume more resources than would have been spared. While controversial, Takeda agrees with the freegans in one aspect — that the most responsible thing for a consumer to do is to use what s/he already has for as long as possible, without buying new.

After much consideration, I think I agree. Forgoing the purchase of a canned drink from a vending machine and having a cup of barley tea at home is certainly cheaper, and more environmentally friendly, than buying that drink and recycling the can. Finding ways to reuse or redistribute items already in the “consumer food chain” is better than buying something new, even if it is cheap. In fact, one could contend that while the advent of a global manufacturing and distribution networks has cut prices and brought material prosperity, it has also cheapened goods to a dangerous level.

I remember being so happy when Uniqlo and Daiso brought cheap, quality items to consumers in Japan, but now I wonder if we haven’t gone too far. Maybe we should pay a little more for a little less, and use it longer. I’ll focus on more specific ways we can do this in a future issue, but for now, I challenge you to give this philosophy a try. While you certainly don’t have to go around foraging like a fanatical Freegan, try and think of ways you can simply ‘buy’ or ‘consume’ less. Any great suggestions? Contact us!

© 2007 Wendy J. Imura.

Did you know that:

1) Large-scale supermarkets discount their produce and other fresh food items sharply on weekday evenings?

While full on the weekends, many larger suburban stores are empty on the weekdays, yet must still stock enough items to fill their aisles. Fresh vegetables, fruits, fish, and meat (essentially, items with a short expiration date) tend to get cheaper as the evening wears on. You can typically find sushi, prepared dishes (’sozai’), and other foods reduced by 50%, 70%, or more past 5 or 6 PM, while many supermarkets run special limited-time deals after 4 PM.

2) Stores have a ‘cycle’ on which their run their specials and sales?

Most supermarkets put their best deals in their newspaper inserts, known in Japanese as ‘chirashi’. Stores typically run chirashi on certain days, and saving one week’s worth of chirashi from each store can give you a good idea of their sale cycle. Dividing your shopping among several stores based on their sale days (i.e. eggs at Aeon on Thursday, frozen foods at Ito Yokado on Tuesday, meats on 10% off days at Nissho) can save you money.

3) Reading chirashi is an art unto itself?

For example, did you know that the best deals are reserved not for the full-color inserts with lovely pictures, but the boring one-color chirashi? Hand written inserts might have particularly good prices. Also, the upper left hand corner of a chirashi for national chains typically has the best deals! (Hint: it’s where local stores can advertise their own special low prices.)

4) Rainy days are often great steals?

A sudden rain shower can often result in a dramatic drop in customer traffic at stores. For the truly frugal, grab your umbrella and head out to find some great steals in the fresh foods department.

5) The last day before a multi-day sale or the day before the store’s holiday is the time to shop?

In both cases, you’re likely to find good deals on fresh foods as supermarkets have to drastically reduce their inventories. Also, the last day of a sale is a great time to find ‘leftover’ bargains.

6) The best place to look for bargains is the bottom of the shelf?

It’s true. Some of the cheaper products can be found lurking on the bottom rack of grocery isle shelves – where they think you’ll least notice it!

There you are! So get started shopping – and saving – right away!

© 2007 Wendy J. Imura.

Well, while your mileage will vary substantially depending on the type of school, location, and other factors, here are a two tips to help you weather the start of the school year with less of a deficit.

Save Ahead for Tuition Payments

First, let’s look at the big one: tuition. Most everyone realizes that education costs money. Even Japanese public schools have various fees (lunch, books, school uniforms, trips), and any schooling before first grade (age 7) or after junior high school (about age 13/14) is not part of gimukyoiku, or compulsory schooling, and requires even greater expense. Saving ahead is of course the best way to minimize the one-time impact on your budget.

If you’re a long term resident and plan to educate your children in Japan, there a few handy savings plans available through both the Post Office and private insurance companies. The Post Office offers ‘gakushi hoken’ or a combination savings and insurance plan with pre-determined payouts to coincide with your child’s entrance into elementary, JHS, SHS, or college. Essentially, you take out a ‘policy’ in your child’s name, preferably when they are very young. Your monthly payments for the plan are determined by the total amount of money you want paid out over the life of the plan. The policy automatically includes a small life insurance benefit for the child in question, and can also include a ’scholarship (ikueikin)’ component (payment of school fees if one or both of the parents pass away). There are of course a variety of options in terms of life of plan (ending at age 15, 18, or 22) and savings amounts. To research more, visit the Japan Post website.

Warning! It’s all in rather complicated Japanese. The best way to get details on these plans is to go to your local post office insurance (Kanpo) window during a slow period, and ask about gakushi hoken. It will take some time, but as other foreign residents have successfully managed to purchase a plan – I’m sure you can too!

If you would rather not use the post office, AFLAC also offers gakushi hoken plans through a mail order service. The plans are called Kawaii Kodomo Hoken and operate on essentially the same principles. The website is much easier to navigate than the Post Office’s. The ‘Simulation’ button found at the button of the page in katakana will automatically calculate a sample monthly payment based on the applicant’s age, their child’s age, and the desired plan amount. Note that the insurance rider (in case of death of the parent) adds extra cost.

Shop Early, and at a Variety of Places, for School Supplies

In Japan, preparing for school (especially for kindergarden, day care, or elementary school) can take a kind of Orwellian twist. Complicated requirements for homemade bags of a certain size, math manipulatibles kits with 20-30 small pieces that must be labeled with names individually, and ridiculously expensive uniforms sold through a single supplier are just some of the challenges foreign mums and dads face.

As dictated by the laws of supply and demand, prices on school supplies such as lunch boxes, nap futon, indoor shoes (uwabaki), and bags rise the closer to the end of March you approach. Conversely, mid-April is probably an excellent time to purchase these items if you know what type you’ll need and where your child will go to school next year. Besides large supermarkets or other retail outlets, there are two frugal alternatives worth mentioning. The first is the annual school bazaar at the school you plan to attend. Here, gently used uniforms and school supplies (such as required hats, smocks, recorders, painting kits, and other items) may available for a great discount. Online auctions are another good source for more general school supplies, particularly ‘handmade’ items for those of us not so talented in the sewing arena. Try typing in the name of the items from your required supplies list into Yahoo Auctions, Rakuten, or http://www.bidders.co.jp. You might find a bargain, particularly if you are shopping early.

Finally, it always pays to utilize local foreign networks. FreeStuffJapan, TellandSell Japan, and other lists are excellent places to locate free or cheap items.

© 2007 Wendy J. Imura.