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How to live like you're earning ¥10 million a year on an income of ¥3 million

19 Comments

It takes so little to be happy. If only people knew it. Actually, more and more people do know it. That’s the happy conclusion drawn by the business magazine President (May 14) from a survey it conducted of 1067 households whose annual income ranged from 3 million to 10 million yen. Question 1: “Are you satisfied with your present income?” Yes, said one respondent in four.

True, three in four said no. Still – given the stagnation, if not downright reduction, of income that had set in even before the current coronavirus pandemic accelerated the decline, and also the fact that a quarter of Japan’s workforce works in one form or another of a part-time basis, on part-time (which is to say low) pay, it’s a remarkably positive result. It shows, perhaps, a new shift to standards of happiness other than financial. President’s headline poses a question that implies as much: “How do couples with incomes of 3 million yen a year live as though they’re earning 10 million?”

For an answer it turns to financial planner Harumi Maruyama, who offers two simple rules for being happy without being rich. Both are negative. First: stop comparing yourself to other people. Second: vanquish the ridiculous but (decreasingly) widespread notion that low income reflects low personal quality. (The succession of corruption scandals tainting the highest government and corporate echelons may even suggest the contrary.)

“The survey results indicate,” she says, “that satisfaction with life depends not on income but on your sense of being in control of your income.”

For example: A young man or woman  living alone on an entry-level salary – under 3 million a year, say –  often lives from paycheck to paycheck, flush and free-spending at the start of the cycle, broke and edgy toward the end of it. You reach a stage, she continues, where you say to yourself, “Time to think of a home and family.” You spend less, save more, feel richer in proportion. Also more confident. Same income, different attitude. Maybe the attitude matters more.

A 5 million yen annual income is better but not easy street. President’s survey shows 30 percent of people earning that are satisfied; 70 percent not. Why? Mostly, says Maruyama, because a higher income puts you in contact with higher earners, and the tendency is to compare yourself to those earning more than you, damning your employer, or “the system,” or your own inadequacies, real or imagined, for holding you back. Maruyama’s rule number one comes immediately to mind. Applied, it solves a lot of problems.

Saving is good, she says, but like other good things it turns bad if taken to extremes. Excessive deprivation of personal indulgence in the name of economy not only sours our outlook on life, it defeats its own purpose. Example: you don’t travel. You want to, it’d be fun, and broadening besides; the family would enjoy it – but no, it costs money, we don’t need it, forget it. What to do instead, on a Saturday when everyone’s free? Stay home and watch TV? The mall – we’ll all go to the mall; where you buy this and that and find when you get home that you’ve spent thousands, maybe tens of thousands of yen on nothing of any substance – money that could have gone toward a trip.

Some luxuries all the same are best dispensed with. People satisfied with low incomes tend to use their smartphones less than two hours a day. Another possibly needless indulgence is home ownership. Two or three generations ago, spacious family living seemed unthinkable without it. Today, with late marriages and smaller and smaller families, are its advantages worth its burden? If your income is 3 million yen a year, Maruyama advises, housing costs should not exceed 30,000 yen a month.

Is that possible? If it’s tight, think of it this way, she says: The average pensioner lives on 1.72 million yen a year. Chances are you will one day be an average pensioner. The idea takes getting used to. It’s never too soon to start preparing.

© Japan Today

©2021 GPlusMedia Inc.

19 Comments
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Or, you know, rich CEOs could stop hoarding their money and raise wages for their workers. Then there would be lot less stress about paying for bills.

Of course not comparing yourself to others often is important, but being able to pay bills on time is also important. A family paying 30,000 on rent!? Where? Not in most cities. And if your job is in a city, then commuting more than 2 hours a day from a cheap apartment in the countryside is also not good for your health and happiness. So then let's say you live in the city or close by, and your rent is higher. Now you have less money for other stuff. How happy will you feel if your kid wants to join the baseball team, and you tell him no because you can't afford it? How happy will you be if you can't afford juku?

CEOs just need to be less greedy and share the wealth and profits. There was a CEO in the states who raised all his worker's salaries to 70,000$ a year, and the employees were happier, profits remained high, the company grew and opened a second branch, etc.

People have real problems associated with lack of money and the stress caused by that, and no "positive thinking" is going to change that.

6 ( +8 / -2 )

I am afraid that "fiscal stimulus" (fiat creation out of thin air) will cause inflation.

You will earn 10M yen, and feel as if you had 3M yen.

-5 ( +1 / -6 )

Is that possible? If it’s tight, think of it this way, she says: The average pensioner lives on 1.72 million yen a year. Chances are you will one day be an average pensioner.

This article questions if home ownership is necessary when you are earning a salary, then states the above. How on earth is the average pensioner supposed to afford rent and life with that amount? Get on the housing market young, struggle to pay it off while you have an income and you'll reap the reward later in life. The article is useless IMO.

2 ( +4 / -2 )

What a ridiculous article this is. Nobody can live on 3M a year, it's just peanuts! You need at least 6M a year I would say to live reasonably comfortably here in Japan with its high prices/high rents/vast myriad of taxes etc. I guess most western foreigners here are earning good salaries as far as I know, but who would come to Japan to just earn a paltry 3 M? Nobody.

-3 ( +5 / -8 )

I am afraid that "fiscal stimulus" (fiat creation out of thin air) will cause inflation.

You will earn 10M yen, and feel as if you had 3M yen.

That's the same bullpoop the master class has been peddling to the masses for decades, if not centuries. It's nonsense, just like trickle-down economics. Yet, there are always plenty of gullible folks who believe it.

The best way to boost the economy is by getting more money into the hands of the poor and middle-class, who will spend it. That creates more demand, which creates more jobs, which creates more income, which creates more spending, which creates more demand, which....

5 ( +7 / -2 )

I guess most western foreigners here are earning good salaries as far as I know, but who would come to Japan to just earn a paltry 3 M? Nobody.

There are foreigners who can't function in their own society, but can struggle out a meager existence in Japan.

2 ( +7 / -5 )

I guess most western foreigners here are earning good salaries as far as I know

No. Enough to scrape by. Which is fine.

First: stop comparing yourself to other people. Second: vanquish the ridiculous but (decreasingly) widespread notion that low income reflects low personal quality.

I've known that for years. She's right on that. There's an imported culture here that believes money (and boasting about wealth) is the most important thing and somehow is the answer to all life's ills. Sure, you may have a more comfortable bed or car, but so what? What matters is people, the beauty of nature, family, friends. Harping on about stocks and shares etc isn't relatable to the majority of people out there.

9 ( +10 / -1 )

‘You need such-and-such an amount of money to live on’ is meaningless.

How much money you need to be comfortable depends on where you live, whether you’re single or a family, how many kids you have, and a plethora of other stuff.

Someone earning a bomb but with high fixed outgoings- mortgage repayments, kids’ education - has less loose cash than a pensioner with a paid-up mortgage and an empty nest.

4 ( +6 / -2 )

Peter Neil: "There are foreigners who can't function in their own society, but can struggle out a meager existence in Japan."

One can say that about all who live outside of their home country. I've heard that about "foreigners" for over fifty years. It's not an entirely unfair claim, though it's often made with mean intent...

I remember Japan when even non-native speakers of English with little education and certainly no professional qualifications could get eikaiwa jobs--and with no proper visa. They didn't bother to learn Japanese and shamelessly took advantage of the Japanese tendency to let foreigners get away with bad behavior....I remember one con artist, with atrocious English, who spent his days hanging around Tokyo coffee shops, soliciting gullible Japanese females.

But that was then...

-2 ( +3 / -5 )

I used to say: "I just want enough money that I don't have to think about money anymore." But then someone told me: "Uh, that's what everyone says, naively thinking the statement to be true. The trouble is that for most people there's never 'enough'!"

That same person told me recently: "Part of getting your money's worth out of a business-class airline ticket is the fun of sipping champagne as one eyes those with backpacks heading toward cramped economic-class seats." It's a very gloomy but, I fear, realistic observation...Too many "equality" advocates are armchair socialists who would love to become government bureaucrats--with special privileges, including business-class, no, first-class, tickets. That's how the old Communist systems worked--or didn't work.

-7 ( +2 / -9 )

Cleo, I completely agree. I almost killed myself to put my two kids through private school and college. Now that they're independent, I've cut back on work drastically. Funny enough, I never had much personal money when I was working so hard and still don't - but I do have time.

7 ( +7 / -0 )

What about the opposite. Incomes of ¥15,000,000 but living on ¥3,000,000?

It is very easy to do if you plan it, and pay off the mortgages and put your kids in local Japanese schools. No reason to have brand new electronics, top of the line cars and various other things. Cooking your own food too is a plus.

I lived it. We lived it and doing fantastic.

Think, plan, save and live like there is no tomorrow.

-2 ( +3 / -5 )

So the advice is at the same time to be contempt with your lifestyle and to somehow spend less so you can live better? for people that have to put their private lives and rest time on hold just to avoid going into the red every month it doesn't seem like it would be very useful, and 3 million each month is barely above this level depending on the responsibilities of the person.

2 ( +2 / -0 )

This article seems to suggest that since most pensioners get by on 1.7million, workers should all be fine with 3mill. No way! As a retired pensioner, I am more than happy to have had a far higher salary when I worked, and now am receiving far more income those figures without work. Money has given us options - to retire early, to donate to charity, to travel extensively. Those options disappear without better incomes.

The secret is securing multiple income sources post-retirement by long term saving, investing wisely and being lucky. And having two very good incomes.

1 ( +1 / -0 )

If your income is 3 million yen a year, Maruyama advises, housing costs should not exceed 30,000 yen a month.

That is about 12% of your pay going to rent which is very conservative. I think up to 20% is still reasonable so even 50,000 rent at that income will be comfortable. In California people have to pay 30-50% of gross pay for rent so no wonder they are stressed.

Although I have never bought a house, if you really truly intend to spend your life in Japan, I think you should buy because you can get a new house with nice fixtures and still have a payment of 100,000 yen or less, whereas if you rent at that amount you may have a much lower quality of life.

2 ( +2 / -0 )

This is the World Economic Forum propaganda machine kicking into gear... “you will own nothing, and you will be happy”

3 ( +3 / -0 )

We all have enough money to last us the rest of our lives.

-1 ( +0 / -1 )

Lived on 3M a year in Shikoku and it was plenty given I was paying next to nothing in rent. Saved money on that and partied a lot.

Earned an awful lot more than that in Tokyo - wouldn't dream of trying to live there on 3M a year.

0 ( +0 / -0 )

who would come to Japan to just earn a paltry 3 M?

the average English teacher’s monthly salary is just ¥250,000 a month - that’s who !

0 ( +0 / -0 )

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