Japan Investing

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.

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.