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i can think of single people who wished they hadn't used up their savings.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Wed Dec 30th, 2009 at 07:00:22 AM EST
[ Parent ]
That I can easily imagine.  But the question I want to keep bringing things back to is this - is now different from ten years ago?  People keep talking on this site about how everything looks bad, bad, bad, and it looks even worse if we don't change our behavior now.  So - should I change my behavior as well?  Do the personal survival strategies of ten or twenty years ago still make sense, given what seems to be looming on the horizon?

If our world and economy and society is going to continue on, business as usual, into the indefinite future, beyond the age when I can expect to retire and die, than the answer to whether I should save now is a whole heck of a lot different than if we are on the verge of, say, a massive hyper-inflationary bubble that will cripple the world economy for a decade, or if the end of an oil-based economy will soon permenantly end industrial society as we know it, or if climate change is going to render most of the world un-inhabitable.

by Zwackus on Wed Dec 30th, 2009 at 07:23:20 AM EST
[ Parent ]
Ten years ago was near the start of the US real estate bubble. It made excellent sense to buy in 1999, as I did. But one precipitating factor was that the owner of the house I had rented for ten years with no increase in rent had decided to sell all of his ~ 10 rental homes in the San Fernando Valley. The other factor was that I had just started my own company and had almost doubled my income the previous year. I could, at last, afford a house and, after preparing my income tax returns for '98 could painfully see how I needed to have the interest deduction for real estate to capture more of my income for my family.

The US tax code strongly encouraged me to buy a house. But I also worried that, were real estate values to continue to rise, so would most rents, and I did not want to have to move often. Best decision I ever made.

But the last real estate bubble in Japan burst 20 years ago.  It is hard to know if real estate would make sense as an investment, even if you knew you wanted to stay in Japan for another ten to twenty years. If your annual rent is over 75% of what a mortgage payment would be and you were confident you had long term employment, ten years or so, it might make sense.

If long hours at your job are a problem, anything that makes your life easier makes sense. Do it yourself home maintenance probably doesn't qualify there. :-) But saving so that you have options does.  Having two year's worth of income saved would leave you more comfortable changing locations, either within Japan or elsewhere. You might also be able to find a situation that is less demanding of your time, which could allow you to invest more in personal abilities. You could even afford to take off for a year and travel.

In Japan, the problem with the economy for the last 20 years seems to have tilted more to deflation than to inflation. So long as that continues, your savings are appreciating, even if you are not getting much, if any, return on investment. But you might want to diversify in terms of currency exposure. Study the variation of the Yen vs. currencies of countries you might consider investing in, say Brazil, India, the EU and wait until the yen is strong with respect to the target market and buy several somethings that is likely to be there in another ten years in each target economy.

In sum, it is better to have savings, even if they might be eroded in value, than to have none, especially in a crisis.  If diversified, the chance that all of your savings will be worthless is far less than the possibility that they may be very important to you. It may be that a time will come again when economies seem predictable and stable. That will be a much better opportunity if you have savings than if you don't.  But I would spend a portion of that surplus on yourself, on vacations, personal conveniences and smaller pleasures as well.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Dec 30th, 2009 at 06:34:34 PM EST
[ Parent ]
As a non-national, I'm not eligible to own property in Japan, even if I wanted to.  Right now, I'm not thinking of being here more than another year or two, so that would be kind of silly.
by Zwackus on Wed Dec 30th, 2009 at 09:04:34 PM EST
[ Parent ]
Zwackus: I'm not thinking of being here more than another year or two

classic last words of long-term ex-pats in Japan.  (^_-)

La Chine dorme. Laisse la dormir. Quand la Chine s'éveillera, le monde tremblera.

by marco on Thu Dec 31st, 2009 at 01:32:53 AM EST
[ Parent ]
A desire not to become one of those poor, generally miserable people is why I'm thinking of leaving.  
by Zwackus on Thu Dec 31st, 2009 at 02:10:17 AM EST
[ Parent ]
actually, the ones I know there are generally quite content -- and often have a bunch of half-breed tikes running around the house, too.  ;-)

La Chine dorme. Laisse la dormir. Quand la Chine s'éveillera, le monde tremblera.
by marco on Thu Dec 31st, 2009 at 03:14:01 AM EST
[ Parent ]
Well, I suppose part of that is due to a co-worker of mine who often, and loudly, grips about how moving here was the worst decision of his life, etc. etc. etc.

That's not really the thing, I'm just feeling now that I'm kind of tired with living here for the moment, though prospects elsewhere don't look very good.  My desire to leave Japan is more emotional than rational.

But I suppose that was one of the spurs to writing this diary.  I am at a job that may well be my lifetime earnings peak, and I don't hate it.  I don't like it very much either, though, and it's never going to get any better nor will the pay ever rise.  It may also collapse on its own in the next year or two.  But, should I return to the US, I may well enjoy a year or two of unemployment/marginal employment before I get a job half as livable as this.  That is a path with risks and rewards all its own, and my employment situation may not be nearly as dire as I fear.  However, there is a strong chance that moving back like that would put me in the situation of reaching 40 without a dime in the bank.

So, I get to thinking about it, and really can't make up my mind about how much that really matters.  Obviously my decision about staying or going depends on many things much more personal and better known that the fate of the global capitalist system.  However, those are things I need to figure out on my own.  ET is a wonderful place for talking about doom and all, and so I posted the diary with that as the main angle.

And given the discussion provoked, and the many comments on the diary, it seems to have been a good choice.  Thanks all for contributing, and for giving me an idea for a diary on a related topic, regarding the intersection of the personal and the political in terms of the larger macro-economic forces at work in the world today.

by Zwackus on Thu Dec 31st, 2009 at 04:36:23 AM EST
[ Parent ]
Collapse or no collapse, it does seem likely that our generation will be the first one in a long time to have a generally lower standard of living than our parents'. [This is in the overdeveloped world, leaving aside debates about Hans Rosling's presentations]

The 5-year rolling window of preparedness also seems to be part of this here consensus. But the conventional wisdom still operates on much longer time frames - the 40-year mortgage, the single lifetime career (and its associated scourge, ageism)... The only thing that isn't cultural and which doesn't fit in the 5-year frame is the 20 years it takes for one's children to reach adulthood.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Thu Dec 31st, 2009 at 04:52:57 AM EST
[ Parent ]
Yep.  Sobering thoughts.
by Zwackus on Thu Dec 31st, 2009 at 07:38:53 AM EST
[ Parent ]
So, under business as usual you think if you don't want to be poor, generally miserable in the long term you need to leave Japan.

But long-term business as usual contradicts the premise of your diary...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Thu Dec 31st, 2009 at 04:20:18 AM EST
[ Parent ]
My answer to you is largely in the above answer to Marco's comment.  But yeah, it's complicated - but a doom-focused approach to the situation seemed a better fit to ET than a personal psychology one.  And I'm much clearer about my doom anxieties than I am about my other psychology problems. :-)
by Zwackus on Thu Dec 31st, 2009 at 04:38:20 AM EST
[ Parent ]
Oh, and another angle on that comment.  Should global civilization collapse, Japan seems like it would be in a bit of a quandary.  On the one hand, its present population is simply not sustainable from local production, especially given the global collapse of world fisheries underway.  On the other hand, the Japanese government has been FAR more forward looking, and willing to adapt to obvious problems facing it on the level of macro-economic structure, than has that of the USA.  So, it has its strengths and weaknesses a collapse scenario.

However, as much as they like foreigners now, I wonder how that would change, or not, should things turn ugly.  I also wonder what the heck I'd end up doing, once teaching English/teaching in English is no longer a viable option.

So yeah, I guess doom anxieties play a bit of role in this decision as well, though as with savings, I can't really make up my mind.

by Zwackus on Thu Dec 31st, 2009 at 04:42:17 AM EST
[ Parent ]
today is interesting as we teeter on the brink of either deflation or inflation, and it's still not clear which way we'll go (I've used occasionally the image of the upside down pyramid, which is now unstable, but it's not clear which side it'll topple on, as one side is being propped up - but maybe too aggressively...)

And these two destinations bring about completely different answers to your question.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Dec 31st, 2009 at 08:02:40 AM EST
[ Parent ]

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