Objective Trading's blog

A lot of people want to know WHEN they should start investing. Is it ok to wait, or is earlier better?

The following quote is generally attributed to Albert Einstein: “The Most Powerful Force in the Universe is Compound Interest*.” And while the statement is often used, its truth never diminishes. Truly the easiest way to secure a bright financial future is to put the power of compound interest to work as early as possible.

Unsurprisingly, the purpose of an emergency fund is to help you deal with unexpected things that come up in life. Let’s face it; no one knows what is going to happen tomorrow. And if something unfortunate should happen, it is probably going to require money.

According to virtually every major survey on New Year’s resolutions (including one conducted by the US government), taking better care of our finances ranks in the top 3 goals for the vast majority of people. On the one hand, it is encouraging that so many people are prioritizing their financial affairs. On the other hand, we all know what happens to New Year’s resolutions between the day they commence and the end of the year. Some studies suggest that fewer than 15% of people who make resolutions follow through on them by the middle of the year. No doubt this is linked to the observation that of those people who make a resolution, fewer than 79% have a specific plan to achieve their goal.

We are often asked about the best way to plan and stick to a monthly budget. There are a number of different ways, but the "Pay Yourself First" method is the one that most people have the least difficulty sustaining over the long term.

One commonly misunderstood financial principal is the importance of deferred taxation. Some people figure that since taxation is inevitable there is no point worrying about whether you pay the taxes now or later.

Mathematically speaking, this is far from true. The more assets you have available to compound, the greater your total returns. Taxation erodes your asset base leaving you less money available for growth.

A common question that comes up among investors is whether it is better to save up large sums of cash and then invest it all at once, or invest small amounts regularly. Dollar Cost Averaging (DCA) refers to the practice of investing a fixed amount at defined intervals (often monthly) into a fund or portfolio of funds. By investing this way more units are purchased as prices drop and fewer units are purchased as prices rise. Investors use DCA to guard against the market dropping shortly after investing a lump sum.

As more and more foreigners elect to stay in Japan for longer periods of time, it is important to have an understanding of basic tax issues. One question that arises with some frequency is what it means to be a permanent resident in Japan.

For tax reasons and immigration purposes the term “Permanent Resident” are independent of one another. In other words, it is possible for a foreigner living in Japan to be a permanent resident for tax purposes, while maintaining an immigration or visa status other than Permanent Residency (eijyuuken).

In the Piqniq FORUMS section there was a recent discussion about the merits of Japanese National Health Insurance. The discussion can be found at: http://www.piqniq.jp/node/3370

Since proper health care is SO important to ensuring the quality of our lives (no matter where you live) I thought this would make a good topic to discuss in our blog.

National Health Insurance (NHI) in Japan is designed to provide affordable health care to everyone who intends to remain a resident in Japan for at least a year. And it is fair to say that they have been fairly successful in providing a decent standard of care. While you will no doubt find someone willing to share a horrific Japan hospital story with you; personal anecdotes ignore the fact that in the year 2000 the World Health Organization ranked Japan as having the tenth best health care system in the world.

For newcomers, there are a series of rather predictable steps one must take upon arriving in Japan to get settled. And invariably, after housing and other immediate needs have been sorted out, the question of how to open a bank account arises.

Opening a bank account is a straight forward procedure, and probably not much different than in your home country. Your ID card, the Alien Registration Certificate (ARC) acts as both proof of identification and proof of address. If you are waiting for your ARC to be issued then your local Ward office can print you out a paper document with the same information (kisai jikou shoumeishou). If you have moved recently then be sure to update your ARC before going to the bank. Your visa should have more than 6 months remaining before expiration, and you must have an approved status of residence to open an account.