"Ryan Ginstrom" wrote...
> Yesterday, my wife went down to the bank to deposit a year's worth of
loose
> change. We had over 200,000 yen for our savings, and about 50,000 yen for
> the sprog's college account.

Hey, if it works, it works.  Still...

> This got me to thinking about how we save money. In addition to our "loose
> change savings plan," my wife saves 1,000 yen per day, in a separate bank
> account set up for that purpose. She also has one of those "buy gold"
plans,
> where she pays a set amount each month to purchase whatever amount of gold
> that will buy. She also puts a set amount into the sprog's college fund
each
> month. She has several other schemes on top of that, in addition to at
least
> two "hesokuri" (I know of their existence because we resorted to them
rather
> frequently when we were poor, and I also inadvertently discovered one of
> them a couple of years ago while going through some old papers).

It's amazing to me my mother-in-law would seriously consider trading forex
as an "investment", or your wife buy gold, and then resist other kinds of
investments.  I have to admit, however, the obatarians of the land certainly
made the right call by not investing in the Nikkei after 1990 and one has to
tip the hat a little.

> Out of all these little programs, not one earns any significant interest.
I
> have talked to her a few times about buying US savings bonds, if nothing
> else for the sprog's college, since he will almost certainly be cashing
them
> in there. But for the average Japanese, "interest" is an utterly foreign
> concept. Don't even get me started on the stock market.

Your wife should understand placing money in a non-interest bearing account
is also quite risky because of inflation (averaging a historically low 3.1%
over the last decade or so in the US) and because the exchange rate could
really be against you when the money is needed in the US.  The great
advantage to investing in the U.S. is there will actually be a time when you
can spend those dollars, whereas everyone else in your neighborhood has to
contend with currency risk whenever they want to remit funds back to Japan.
Finally, without interest you don't have compound growth, which is of course
the cat's meow.

These days it's not easy to open a brokerage account in the U.S. with a
foreign address, but a relative's address stateside should do the trick. If
you didn't want the account in your name, keep in mind the rules differ
greatly for citizens vs. non-resident aliens. For example, there's no reason
for a non-resident alien to buy into a traditional mutual fund (because
capital gains are handled differently from individual stock purchases) but
index funds or ETFs (if bought in big chunks) would make sense.  At the very
least, invest some savings into a bond fund, like Vanguard's or iShare's
fixed income offerings.  I would avoid money managers, as virtually none of
them understand the cross-border issues and most don't have your interests
at heart anyway.

> One form of investment she thinks is worth it is land, and despite the
crash
> in land values in the 90s, enough fellow Japanese seem to share her
opinion
> that she is probably right.

Land should probably be a part of everyone's investment strategy, but it's
especially nice when you're living on it.  Even better when you have a
mortgage, since it creates leverage on the investment if property values
rise (iow, you're paying only the downpayment to invest the entire worth of
the property).  If you want exposure to land but don't want the
administrative hassle, you can also invest in REITs.  My personal guess is
Japanese land values will generally continue to decline in value for another
3-7 years, even so, now's probably a good time to buy with interest rates so
low.

best regards
hibijibi