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There have been multiple articles in the newspapers and segments on the news lately about how the Bank of Japan (Nichigin) has been making a tidy profit on the Japanese stock marker.

BoJ has been buying Japanese stocks for some time for various reasons, so it’s no surprise that they own a lot of domestic stocks. It also shouldn’t be surprising that they make a profit doing this, if these stocks are making a profit overall – but the profit that BoJ has been making is larger than would be expected.

Why? It’s simple, they have a daily budget which they spend each day to buy stocks – but on days where the market has dropped a significant amount in the morning, they raise their daily budget for buying stocks and buy more than average in the afternoon. In other words, they buy more stocks when stocks are on sale. This lowers their average purchase price.

If you and BoJ own the same stocks, but they bought them for less, then obviously they will have earned more of a profit than you.

The question is: What can you learn from this as an individual investor?

Well, on average, getting into the market earlier is still a better strategy than waiting for prices to drop – but if you have a normal budget you invest per month, and you are also able to lower your disposable income in order to invest more in certain months, then perhaps you too can employ a similar strategy.

As an example, say you have a take-home pay of 40 man Yen per month, and you normally invest 10 man Yen. You technically could live on a tighter budget and invest 15 man yen. Financially speaking, you should invest 15 man yen every month then – but you don’t want to be that austere all of the time. One thing you could do is invest 15 man yen whenever the market is at least 10% lower than it was at the start of last month, and 10 man yen the rest of the time.

Implementing a daily system like BoJ would be more complex, time consuming, and depending on your fees, not worth the effort. Depending on your situation, you might define your cash to stock ratio as a range, say “I want to be 20-30% in cash”, and start the month with 10 man in cash. That means that using the 30% number, you plan to invest 7 man in stocks over the course of the month. Every day, you invest 2,333 JPY. On days where the market went down in the morning, you invest 2,666 JPY instead. Again, emulating the bank’s approach assumes free real time trades are possible.

Doing this with individual stocks would be incredibly dangerous since it may well mean your are pouring money into companies sliding towards bankruptcy – but doing it with the market in general isn’t a bad approach.

The more important takeaway, however is probably that there is no need to run when market drops. If you feel the need to sell, then your cash position wasn’t large enough in the first place, so rather than selling, you should start saving more in cash each month until you are in a position where the market dropping 50% overnight wouldn’t bother you that much. Stocks might offer the highest return, but being able to sleep at night is important as well, and panic selling can erase any gains you might have had. The best asset allocation is the one that keeps you in the market and lets you sleep at night.

How to become wealthy in Japan? Well, being a salaryman (or office lady) working for a large company is about the worst say, structurally speaking. While Japan is a first world country with a decent standard of living and very good social benefits, the cost of living has been creeping up in recent years while salary lags behind.

What’s more, a normal office worker will have to pay not only national and local income taxes, but also pension, unemployment & health insurance premiums, etc. Besides mandatory taxes and social insurance premiums taken out of their paycheck, they also have to pay consumption taxes on everything they buy, along with property taxes on any property they own.

In general, working for foreign companies can mean higher total salaries (in exchange for more variable and generally lower bonus payments) – but a higher salary means paying more taxes.

The highest tax bracket is 55%. We all might think “Well if someone makes enough to fit into that bracket, they deserve to pay”, but remember this is by year. If you work at a typical Japanese company it will take you a long time to get to that level, and then you only have a few years left to try to contribute a little extra to your retirement fund. It’s not surprising that it feels unfair to many people that when they finally start making enough money to be able to save more, suddenly now they need to pay more taxes instead.

To be clear, I am not against paying taxes. Japan has some of the best social services in the world, and running them requires money. I am in favor of having universal health insurance, for example, even if it means healthy people have to pay slightly more. I’m in favor of paying my fair share to keep the streets clean, safe, and lit. On balance, I am happy with the Japanese government and I am happy to help fund it – and I hope you are too.

Likewise, I don’t mind some people getting discounts. People with disabilities, single mothers and the like – it makes perfect sense to me that people with limited means should get a break, and I am proud to live in a country where the government tries to make life bearable for everyone.

That said, I also think 55% plus social insurance is a bit too heavy of a load for some people to pay just because they are relatively well off – especially if they are only able to start saving later in life. After all, high salaries often come from jobs with a high bar to entry. If you’ve borrowed a huge amount of money to go to college and graduate school, and accepted a low salary early in your working life to do internships and work at famous companies to build up your reputation – then you also have a higher debt load than the average person.

In this kind of case, the worst position to be in is actually a permanent worker for a large company. You get a small standard deduction for deemed expenses, a deduction for dependents, and maybe you can use the hometown tax system. Other than that, you don’t have a lot of options to lower your taxes. You can contribute to a 401k style DC if your company has one, or an iDeco otherwise, but your money will be locked up until retirement age with no chance to use it for (for example) a down-payment towards buying a house, etc.

If in addition to working a normal job you are a freelancer or another type of personal business, the situation is better, and if you run your own corporation, things are even better.

Why?

If you have a “main job” and a “side job”, you only pay taxes on the side job, not social insurance – and you can claim some expenses.
Having a corporation makes it easier to claim expenses for many things.

Likewise, if you own stocks or real estate, these are treated advantageously as well.

If you own stocks, the typical tax rate is only 20%, and again, there are no social insurance implications.

With real estate, it’s easy to claim interest, property taxes, management & repair fees, and depreciation as expenses even if it’s personally owned.

So, how can you find money for investments? Well to start with, pay down debts if you have any so that you are paying less money on interest, and of course work on your budget to decrease your expenses. Most people have lots of recurring expenses that can reduce or eliminate. After that, you can try to increase your salary at your main job – but in the long term, if you are a salaryman or office lady, your best option is to decrease your taxes by creating other income streams where you are not an employee, but a freelancer or business owner.

During a recent Winter, I finally had a chance to do something I had wanted to do for several years: Take a friend of mine skiing. I go every few years, sometimes more than once, but they had never been.

Every time I tried to convince them, a barrage of excuses came out. “I don’t know how”, “Isn’t it dangerous?”, “I can’t afford it”, etc. The truth was just that they thought going skiing was something wealthy fancy sporty people did, and they don’t consider themselves to be in that category. Put simply: People like them don’t go skiing.

This all changed one Winter when some of their other less wealthy friends posted photos of themselves skiing. Suddenly my friend was envious of them, even though they hadn’t been envious of me – because now they saw skiing as something “people like them” could reasonably do.

“How come I can’t go skiing?”, they asked. “You can”, I answered. They protested that they wouldn’t even know where to start, so i said “Okay, it’s more fun as a group, so I’ll invite someone else, and you invite someone else, and we’ll all go” together. I’ll pick the location, and plan the trip”. – so we did.

When we went on the trip, the result was very predictable. I have been skiing with first-timers many times, so I knew the pattern. They fall down every few meters for the first half of the day, and complain constantly that it’s cold and they will never get the hang of it. By the early afternoon they start being able to make it a few dozen meters, and by the late afternoon they can do hundreds of meters at a time. They gain confidence, stop falling so much, and warm up from all the exercise. They start to have fun, and when it’s time to close, they say “But I don’t want to go yet! When can we come back?”

In this particular case, social media was a positive force, because it pushed someone out of their comfort zone and got them to try something new – but sadly it’s often the case that it ends in envy, jealousy, or causes them to spend money they shouldn’t.

Luckily, the friend mentioned here is not to easily swayed by such things, and the skiing was an exception. When people post photos of their fancy new coat that costs more than their monthly salary, my friend doesn’t plop down their credit card to copy this behavior.

Likewise, when their friends post photos of trips to Paris of Dubai, my friend doesn’t immediately book a plane ticket. They do, however, feel a quiet sense of “people like me can’t do that”, and have some mild disappointment.

To me, that alone is enough reason to stay off of social media. For people who are persuaded to spend money they shouldn’t, staying off social media is even more important.

I am not saying you should never use social media – just that perhaps you should consider using it with a purpose.

For example, I have accounts on Instagram and Twitter, but I have completely turned off all notifications. The apps don’t draw me in. If I want to check something specific, I open the app, search for it, and then close the app. I may not open it again for a few weeks or months.

Social media apps like Facebook, Instagram, and Twitter – even LinkedIn, typically use the one-to-many model. One person makes a post, and many people see it. To me, this means that the posts aren’t actually meant for me.

After all, there is a big difference between a person absent-mindedly posting photos from a recent BBQ or beach trip to Facebook for all of their “friends” to see, versus them sending the photos to me.

If they are really my friend, and they care about me seeing the photos, they can send them to be directly via email, Line, or SMS. That may sound old-school, but that’s what real communication is.

More to the point, if someone I actually know personally is having a conversation directly with me, then it will probably include things like “I saved up for 2 years to go on this trip to Paris” or “I bought this expensive coat instead of going on vacation this year”, etc. People don’t tend to post those kinds of things when they are posting to the world at large.

Then there is the simple math of the situation. Even assuming you only “friend” your actual real-life friends on social media, you might have 20 or more people you met on the job, in school, or through other friends. Just like having the same birthday as someone else in a group is not that uncommon, if you have 20 people on your feed who all take a vacation or buy something expensive once every two years, you will see something like that on your feed almost every month. That can lead to the false impression that people are doing these things monthly when in fact they aren’t. Now add in the 300 or so “friends” that you don’t really know well, and it can feel like people are going on overseas trips or buying luxury goods every day of every week. Sure, someone is, but with hundreds of connections, of course they are.

Now add in the fact that the business model of almost all social media apps and sites is based on advertising, and it becomes clear that their main goal is to monetize your fear of missing out.

The other thing to note is that people don’t tend to be as open about the negative things going on in their life, or even the every day happenings.

People might post when they buy that Gucci bag, but they don’t usually post a photo of their credit card bill when it arrives. They don’t post about how they are eating cup ramen and moyashi for the next month to make up for spending money they didn’t have on a bag they didn’t need. Most people don’t post photos of their neighborhood with a caption saying “No vacation for me”. Much like the news focuses mostly on negative stories, social media focuses mainly on positive ones.

So what you see is to a large extent lavish spending, and it can make some people start to believe that it’s normal and everyone is doing it all the time. Then you might start to think “Hey, everyone else is doing it, why can’t I?”

I’ve seen the same phenomenon offline in fancy bars. There are some customers who are out drinking every night of the week, paying an average bill of $100 or more. If you see numerous people doing this, you might start to think it’s normal – but it isn’t. Most people don’t spend $3000 a month on drinking at fancy bars. Many of the people who do are CEOs of small businesses or wealthy retirees – and you shouldn’t try to copy them if you don’t have the same means.

Given that these facts should be pretty much common knowledge by now, why subject yourself to this? Yes, we all craze human connection, but much of what happens on so called “social media” is not really that. Watching people you don’t even know well brag about where they have been or what they have bought is not really legitimate social connection.

Obviously I can’t tell you what to do, however I can make some recommendations.

1. Turn off notifications on your social media apps.
2. Open them only when you want to check something specific. Check it, and then get out.
3. Pare your friends down to your real, actual friends.
4. Use an app like Nora or something like Revanced to reduce or remove ads.
5. Let your friends know you don’t check social media much and encourage your friends to contact you via 1 on 1 methods.

I’ve seen this question posted online a lot, and I have asked it of myself plenty of times, particularly by single people.

First, I have to admit that I myself have changed my opinion on this topic over the years. I used to make excuses, including mainly these two:

1. By the time I buy all the stuff I need to cook one thing, I have spent a lot more than that meal would cost. I could just go to a restaurant for cheaper.
2. My time is worth money, and it takes time to buy groceries and cook.

The first argument basically goes as follows: Say I want to cook yakisoba. I need whatever I am going to put into the yakisoba. For sake of argument, let’s say tomatoes, broccoli, eggs, ginger, cabbage, yakisoba sauce, and… soba noodles.

Maybe eggs are 250 yen for 6, broccoli is 200 yen for a head, tomatoes are 300 yen for 3, cabbage is 100 yen, the noodles are 400 yen for 4 servings, etc. Say I start with none of the required ingredients, so I buy all of them, and it costs me 1500 yen. Some people will say “Well you could go to Go Go Curry, Saizeria, or Yoshinoya for cheaper than that” – and they may be right.

Of course, the reality is that now only would the home-cooked yakisoba be far healthier than any of those options, it is also cheaper when you factor in the fact that there will be left-overs. You will only use 1 or 2 eggs, one serving of noodles, and a small fraction of the yakisoba sauce. In fact, you won’t use more than half of anything on the list above, so you could make yakisoba at least twice for that 1500 yen, probably three times or more.

If we assume 3 meals, that’s 500 yen per meal for something with balanced nutrition. Maybe the 4th time you make it, you have run out of broccoli and eggs, but then you just have to buy say.. bell peppers and tofu to replace them. That might cost you 400 yen, and you can have another meal. Now you are out of noodles, but for another 400 yen, you will have enough noodles for another meal, etc.

I picked yakisoba for this example because it’s easy to make and you can switch up the ingredients as you go along, but yakisoba is not the only thing like this. Fried rice and Okonomiyaki are much the same. Soup is even more flexible. Since you can change the ingredients for these things on the fly, you can buy whatever is cheap and in season. Maybe tomatoes are expensive but onions are cheap right now, or bell peppers are expensive but asparagus is cheap. Just use whatever you like that is on sale.

I promise you, it’s possible to have tasty, healthy, and filling food for 500 yen per serving on average. This does mean that you need to look at that you have on hand, and might require some planning to make sure your stock doesn’t go bad before you eat it.

Before COVID, I ate out a lot, and so sometimes stuff I bought would go bad in the refrigerator. During COVID, I started cooking almost every meal, and so I would start out with “What do I have?”, which would turn into “What can I make?”, and finally “What do I need to buy?” I could always find something that I could make with what I had on hand, or something I could make if I bought just one or two items.

Let’s say that you don’t have the time to go shopping that often, and you are going to end up eating out a few nights a week. Having a lot of perishable food might not work for you. Maybe you simply don’t have time to cook. You can’t be away from the computer, or the kids for more than 10 minutes at a time.

There are still options. Rice keeps for months, so you can buy a fairly large bag of rice and use it when convenient. Even 1 Kg of rice is quite a lot of servings – over 6 Japanese rice cups. You can buy preserved curry ready to eat, and pair one pack of curry with one half of a cup of rice. All you have to do is put rice and water in the rice cooker and wait a while. When it’s done, you put the curry in a bowl, microwave it, and add the rice. And curry comes in a lot of styles and flavors: Japanese, Thai, and Indian, with lots of flavors for each.

How much does this cost? Well at the high end, it might be 500 yen for a pack of really good high quality curry, and something like 200 for a cup of fairly expensive rice. So even if you ate an entire cup of rice in one sitting, it would only be 700 yen. If you are eating half a cup and a cheaper curry, it would be as little as 300 yen. You can even mix in some left-overs from the refrigerator for “free”.

Speaking of curry, instead of pre-made curry, you can buy the block style curry and make your own by adding in potatoes, carrots, onions, again – whatever you like. For example, you can buy a 1 kg block of S&B Golden Curry for about 1500 yen. That’s 50 servings! I remember having one of those in my refrigerator for at least 3 months before I managed to finish it all. At the very least, it’s a good back-up plan.

Even if you plan to properly cook, having things like pre-made curry and canned soup around is always a good option because if you are short on time you may be tempted to go out to eat – unless there is something you can make in less than 15 minutes.

That brings us to the second issue, the time it takes to shop and cook.

First of all, I believe that unless you are billable 24 hours per day, counting your time as if you could get paid for it is just silly. Do you say “I shouldn’t have spend time going to the movies with my friends! That took 3 hours, and I get paid 2500 yen per hour – I could have been paid 7500 yen!” No, of course not.

If the time you spend grocery shopping could have been spent working and getting paid more instead, then by all means – pay someone to do your grocery shopping, or use a delivery service.

For the rest of us, though, shopping is not that much of a burden. This is especially true if you shop at least once per week (which you should be doing since fresh ingredients have more vitamins), and have some idea what you want to make so you know what ingredients to buy.

If I am doing a maintenance run to the local supermarket, I can easily be in and out of the supermarket in 15 minutes. I often like to shop slowly at lots of small specialty shops on the weekends, so then I may take my time – but that’s because I enjoy it, not because I need to.

Likewise, cooking doesn’t have to take a long time. Sure, baking and such can take a long time, but the things discussed on this list don’t. Yakisoba, for example should take 30 minutes at most, probably half that if you are organized used to making it. The same goes for fried rice. Soup may take longer, but you don’t have to be paying attention most of that time.

Cooking rice can take over an hour if you are cooking brown rice with a cheap rice cooker – but you can do something else while it cooks.

What’s more, eating fewer times per day (“Intermittent fasting”) has been shown to have health benefits – so you don’t even have to cook 3 times every day.

If you cook twice per day, and you use in-season ingredients common and readily available in Japan, you can easily cook for 700 per meal or less, spend less than 30 minutes per meal cooking, and spend less than an hour per week shopping.

So take a step back and ask yourself – so you really, honestly get away from restaurants spending less than that on average? Keep in mind that cheaper restaurants often make most of their profit on drinks. You can buy a 2 liter bottle of green tea or soy milk for something like 100-200 yen, but a single cup will usually cost you more than that in a restaurant.

The reality is, if you are serious about minimizing costs living within your means, you will probably decide that eating at home is the sensible option most of the time.

I still go out to eat, I just save the occasion for when I can go with friends and have a great experience together. I save enough money cooking for myself that I can go wherever I want when I to decide to eat out, and it won’t break my budget.

All of the above pertains to people whoa re single (or cook only for themselves because their partner always eats out with co-workers, etc) – but the equation only tilts more in favor of cooking at home as the number of people increases. The time spend shopping and cooking won’t increase much with the number of people you are feeding increases, and economies of scale often exist with groceries. Larger items are often lower cost per unit, and you can buy those items if you aren’t worry about them going bad before you can eat them.

Finally, people asking this question are often saying things like “Buy I can eat a Yoshinoya for 500 yen!” Sure, you can – but should you? Is your longevity and health not important to you? Slurping down a bowl of grade D beef with no vegetables is not something that should be a daily habit.

I’ve heard multiple authors talk about the “scarcety mindset” and the “wealthy mindset”, advocating that we should all think like rich people – as if becoming wealthy is something we can just will into reality.

At some level this makes sense. Clearly, some people who struggle financially do so because of poor choices. Likewise, many who have achieved financial freedom have gotten so far because they made the right choices.

If you think “I’m never going to be free… I may as well go play pachinko some more…”, then yes, you probably never will be finacially free.

If you think “I am going to save 30% of my pay check for the next 10 years, even if it means giving up some things”, and you stick to it, then you will probably be well on your way to having a nice nest egg.

The problem is that life is much more complicated than that. Some people are poor, or in debt because of circumstances beyond their control. Other people are born into wealthy families and have everything that money can buy from a young age.

At the very least, I think that “normal” people should look to the wealthy people who weren’t always that way for direction.

Example: Warren Buffet serves as a better example than the Cornelius Vanderbilt, and Ronald Read and Robert Morin serve as a better examples still.

We also need to look for people who have maintained and grown their wealth, and who have reproducible strategies for doing so.

Bill Gates and Larry Page may not have always been as wealthy as they are today, but they both hit upon successful strategies in the technology market when the timing was perfect. Luck also played a big part in their success. This isn’t something the rest of us can easily reproduce.

Likewise, most can’t copy the success of professional sports players, famous actors, or lottery winners. Many people in those categories end up poor (or worse, in debt!) once their income dried up.

In particular, I think the people we shouldn’t copy are the upper middle class. In both Japan and overseas, this group of people has the potential to become truely wealthy – but it often goes untapped. People who have a moderate amount of money often want to look rich – so they spend money on cars, fancy hand bags, designer clothes, and more.

In the book “The Millionaire Next Door“, the authors find that people living in “affluent or white-collar communities” are less likely to be millionaires than those living in blue collor or lower middle class communities.

The main reason attributed to this is purchases of luxury goods by the affluent communities. In other words, they were trying to “keep up with the Joneses” instead of living below their means.

I’ve seen the same thing in Japan in the 1980s. Everyone could suddenly afford more or everything back then, and so a lot of people did. They mistakenly assumed the magic stream of wealth would continue forever, and spent money like it was water.

People who could take the subway bought fancy cars just to keep in their driveways, you saw everything from Gucci sandals to young teenagers with Lois Vuitton handbags. Once it started, everyone around would try to keep up. It was oppulant, decedant, and ultimately grotesque. This kind of extreme “Conspicuous Consumption” has died down for the most part in Japan, but I see it in China now.

Of course, economies can’t grow at that rate forever, and when reality caught up, there were a lot of people who were caught off guard.

Getting back to the point, most of us can only earn so much money, so the real question is how we can make that money work for us. To do that we need to invest it, and to invest it we simply need to not spend it.

Warren Buffet, Ronald Read, and Robert Morin understood this, but their examples might be a bit extreme. Saving every penny you make forever might make you very rich – but it may not make you happy if you end up with money and nothing else.

On the other hand, it’s clear that spending money on luxury goods can quickly make one poor. This doesn’t just relate to the obvious suspects like overpriced handbags and watches, but also things like exspensive appliances, new cars, clothes, and more.

If you buy more stuff in general, and more expensive stuff, then you are just “investing” in things that rapidly lose value.

At the end of the day, most people you see who look wealthy, aren’t. If you have limited income, you can either spend it on looking wealthy, or invest it in being wealthy. The vast majority of people simply can’t afford to do both.

So should you think like a wealthy person? Sure. Think like the Millionaire next door.

I have read many books on personal finance, and some advocate thinking about your hourly rate.

For example, if you earn 300,000 JPY per month and work an average of 160 hours, then that comes to 1,875 per hour.

Further, it is sometimes suggested that if you work unpaid overtime, then that should be factored in. For example, if you worked 180 hours, then the new number would be 1,666 yen per hour.

Some authors even advocate that you should count only take home pay, so if you only actually receive 240,000, then you should divide that by 160 or 180 to arrive at 1,500 or 1,333 yen per hour.

Although I haven’t seen it mentioned, I suppose you should add in your bonus payments?

The point of all of this is to see what your time is worth. I think that’s a fine goal. It reminds me of the “per unit” pricing on supermarket labels.

• If someone you know makes a lot more than you, but works more nights and weekends, then this will help you feel a bit better about getting paid less.
• If you are the one working all of those nights and weekends, this will let you see if all of that extra work is really worth while.

This can also be a good thing to keep track of over time to make sure you are moving in the right direction – up.

Then I see it taken too far.

For example, one popular blogger says that if you make decent money, then you shouldn’t clean your house. After all, paying a maid to come and clean your house once per week might cost only 5,000 yen, and it would take you 2 hours to do it.

The idea is that if you make more than 2,500 per hour, then those two hours would cost more 5,000 yen of your time. You’re better off “saving money” by paying someone else 5,000 yen.

A similar argument is made for labor savig devices such as robot vacuum cleaners and diswashing machines.

After all, if you spend 30,000 on a robot vacuum cleaner and it saves you from an hour of vacuuming every two weeks, then it saves you 26 hours per year. Theoretically, that’s 65,000 yen of time you got back – for the low, low price of 30,000 yen!

There is a problem here, though. If you are a freelance web designer, lawyer, or some other time of professional who can actually use those extra hours to earn more money then the argument might hold. Most people aren’t, though.

For example, the average salaryman in Japan works with flex time, or fixed hours, and either way has deemed overtime. They would have to work 30 or 60 hours of overtime per month before they actually start getting paid for it – and that’s assuming you were that busy, and the company would approve the overtime.

Likewise, managers and executives don’t typically receive overtime at all in Japan. They are the ones likely to have the highest hourly rate, but they don’t actually get paid by the hour.

Sure, indirectly, putting in more effort may mean that you do a better job, receive a better rating, and get a larger bonus or a raise – but this is a very indirect connection.

Likewise, I have often heard it said that the time you save could be spent on self improvment. That’s not wrong – but again, taking a course in English or getting your project management certificate doesn’t guarantee a higher salary any time soon.

Chances are, if you don’t have time to do these things, you can make the time by watching less youtube, spending less time on social media, or giving up some other low value activities.

So sure, I advocate for buying a washing machine and some other things to alleviate household labor – but the idea that it’s always okay to pay for someone else to do something just because they get paid less than you do simply doesn’t make sense to me.

Unless you can actually bill the hours you spend cleaning your house, cooking, hanging up your laundry, or vacuuming your room, then at the end of the day you are just convincing yourself that it’s okay to spend more money.

Spending money means saving and investing less money, which means lower wealth.

This seems to me to be a trap that middle income peopel fall into.

1. Low income people don’t even consider paying someone else to do their work, and know they can’t afford fancy toys.
2. Actually wealthy people with more money in the bank than most people make in 10 years – well they can pay others to do things for them and buy all the toys they want without it affecting their wealth in any material way.

It’s the people in the middle who start to think they are “worth more” than others, and should start outsourcing their life to the lowest bidder.

Don’t get me wrong, I can see the appeal. I don’t love vacuuming or scrubbing the floor either. I also think that maybe it isn’t a sin to call in someone to help you clean every once in a while – just recognize it for what it is. It’s an extravagance, not a sound financial decision.

It’s been said that humans are not “rational”, but “rationalizing” – which is to say we will often decide what we want and then come up with a reason why it makes sense.

At the end of the day, money spent is money gone. If you paid 5,000 someone to clean your house every week for 1 year, that would be 260,000 yen per year.

If you realistically could have earned more than that by using the time saved, then great! If not, you just lost 260,000 that you could have used to get out of debt, pay down some of your mortgage, fortify your emergency fund, invest, or spend on other luxuries.

So should you calculate your hourly rate and keep it in mind? Absolutely. Should you use it to justify spending yet more money? In many cases, probably not.

How can it be useful? Well, say you are looking at buying a new toy – say a smart phone. For example, as of today, the iPhone 17 Pro will set you back 179,800. If you make 300,000 per month, it’s tempting to think “Oh that’s less than a month’s pay”, but if you look at your effective hourly pay after taxes and social insurance, you may see that you actually need to work over 119 extra hours to afford the phone. Besides that, it’s that much less you can save or invest. It you look at this number and decide it’s worth working for three solid weeks and giving up the investment opportunities, then that’s up to you – but at least you’ll be making an informed decision.

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