Foreigners in Japan (especially new arrivals to Japan) are understandably concerned about what to do with their hard-earned cash. Living abroad doesn’t mean you have to stop planning for the future, if anything it’s the perfect chance to add to start or even add your portfolio. So how can you best make your money work for you? Unfortunately, there’s no way to give you a clear set of guidelines on this one. It depends on your salary (dollars or yen), your level of savings and accommodation plans, etc.
If you clicked on this page you are no doubt curious about the world of investments. If you are living in Japan and away from your home country then this would mean looking at “Offshore” investments. In a nutshell this invariably means investing and savings in a vehicle that is registered in a tax-free jurisdiction.
Getting the right advice
Before investing and embarking on your quest for “offshore” opportunities, you need to understand not only what is available but also who to trust with your money. The first thing is to ensure that your own personal financial objectives are realistic and achievable from your available resources. The next step is to find a financial planning company that is well known and respected in the community and is recommended by friends and colleagues who have used their services. Offshore investment providers use financial planners to distribute their products, you cannot buy directly from the company.
Why use a financial planner?
Financial planners are offshore investors themselves as well as having practical experience of providing client focused advice on their client’s financial affairs. The first stage is information gathering so that the financial planner can establish you appetite for investment risk, goals and timescales. The planner then prepares an in depth report on possible solutions to meet those goals.
A word of caution, there are many people passing themselves off as financial advisors or investment consultants who have little or no experience and are merely trying to sell a one size fits all type of investment for their benefit rather than yours. If you want a truly independent view, do some due diligence of your own to satisfy yourself that the person you deal with knows what they are doing and who places your interests first.
Six steps to choosing the right financial planner
1. Ask friends and colleagues who have been in Japan for a while. They can tell you about both good and bad “investment advice” they have received.
2. Do not succumb to fast sales talk from someone who has phoned you out of the blue, badgering you into meeting them.
3. If you have an offshore investment provider in mind then ask them whom they would recommend. This may not be totally impartial but it helps.
4. When selecting a financial planning company, how long has the company been established, do they have their own office and infrastructure or do they only meet in coffee shops.
5. Always ask for a written report including literature for products recommended including charges.
6. Before implementing any recommendations ask for the rationale for making the proposal.
A final note: Everyone’s circumstances and their priorities are unique to them. Make sure your goals are being met and you are not being squeezed into something you do not feel comfortable with, if in doubt get a second opinion.
Information provided by Magellan Japan. Photo courtesy of Calton / Wikimedia