Spenders Addiction

Over the last few weeks I've been bad.  My savings rate for these next few months are going to be hit pretty hard.  It's not like I went out and bought an iPad 3 (but I could!) it's just been lots of friends coming and going, weddings, and of course of end of year parties (the Japanese school year and most Japanese companies end of year is in March).  The end of year parties are almost inescapable in Japan if you want to keep on good terms with your employers.  They are gonna make damn sure you're happy at the end of the year even if it totally hinders you reaching financial independence.  So far I've had one end of year party for a teacher leaving, a trip to see friends who are also leaving, a wedding (and 2nd and 3rd and 4th parties...), and this Friday I have another English teacher Enkai.  Had I known this one was going to be so expensive I would have tried to get out of it.  On top of this we will probably have a year opening party as well.  Ugh...

Not only this but I have also purchased my tickets to go back home this August.  I managed to get everything for under 180,000 yen (this includes round trip to and from the US, plus we are taking a short trip out to the midwest and the east coast) but that is still quite a chunk of change.  I'll of course pay it all off quickly.  Within two months at the most, but probably just one.  I guess this is the time to do it as the US market is rallying like nobodies business and I'm waiting for a dip before I try to pick up any more positions.

Most of this is beside the point however.  I've had about two weeks off of work and another week to go.  With all of this spending I've been doing I've noticed that it's become like crack cocaine.  I need another hit.  I need to take that money out of my wallet and hand it over for my next high.  I don't even really care what it is.  I was in Yokohama the other day to take some photos and noticed that I was looking around.  I don't really shop but I caught myself just considering things.  I went to the book store and noticed a JLPT (Japanese Language Proficiency Test) N1 vocabulary book.  I flipped through it and all of these wonderful thoughts of me getting back into studying for the JLPT, feeling accomplished after a good ANKI session, and eventually getting that JLPT N1 certificate.  I had to stop myself.  "You have this book already!  You have it at home!"  Yep, I caught myself about to buy a book I already own.  Okay, to be fair it's not the exact 100% same book.  In fact the one I have I think is better!  I'm pretty sure it has not only JLPT level 1 but also level 2 vocabulary(the book was published before they changed to the new system).  Sure maybe it's older but just because the test changed doesn't mean the Japanese language itself did.

Another incident was when I was going grocery shopping.  We recently made a Costco run and usually we pick up one of their rotisserie chickens.  After stripping it of all the meat we can we throw it into a pot and boil it up for chicken soup the next day.  However we didn't have any carrots or onion so the next day I went to the store and grabbed some.  I suddenly caught a huge wave of satisfaction come over me as I left the store.  I had to catch myself again.  "Holy shit!  Am I high on just buying vegetables?!"  All I had bought was about 300 yen worth of vegetables but because it had been 2 days since I spent any money that was enough to send me into spenders high.

Shopping, spending money, buying things is an addictive habit.  Your "dealers" know this too.  Every marketing asshole sitting in an office trying to figure out how to get what he's selling that you don't need into your house so you can have a short "spenders trip" and then shove it under your bed, into your closet, put onto your bookshelf, etc. knows that spending is addictive.  I've noticed it in other people too.

The Yokohama Sogo is, I've been told, one of the biggest malls on the planet.  It's about 100 stories of just nothing but shops, boutiques, clothes, and crap.  Sure they make it look nice, and they even have a good book store but all I can see now when I look at it is a giant crack house.  You can see the druggies go in and out every day.  Getting their hit and then hitting the road until the high wears off.

You might thinking I'm being a bit too harsh, and okay, maybe a few people are buying things they actually need.  A recent graduate needs a new suit.  Some students pens, pencils and paper for the new school year starting soon.  I get all of that.  But so do the dealers.  They understand it so well that they will prey on that instinct to buy.  "May I have your address?  Here's our flyer!"  "May I have your email address?  Here's our newsletter!"  It's not that these people are bad or sinful, it's that they act with no control.  They act with the idea that more is always better and with more you will be happy.

Well I can tell you I've had more, and I wasn't happy.  In fact I have less stuff now than I have had in the last five years.  When I travel back to the states this summer I can tell you the amount of things that I own will decrease even more, and my happiness will increase exponentially.

I can't say I'll never buy again.  I can't say I won't have that "shoppers high" when I do.  But I will say that I am aware of my addiction.  I'm the Kecchi One and I'm addicted to spending money.  What's your name?

February to March a Visual Breakdown

As I lay here sick in bed I have some free time.  So what do I do?  I play around with my finances in Excel of course.  You might say I'm a bit obsessed.  I do my best to track every single yen that goes into and out of my pocket and I really enjoy finding new ways to analyze my data and see where my money is going, see where I can cut back, see where I can improve, etc.  Recently I stumbled upon the SUMIF function in Excel and discovered I can now make charts based not only on my spending by expense but also by date.  Here I will give you the same information as a week or so ago but for those more visually minded.

First, expenses:

I'll have to play with the image size a little so it doesn't always run off the side but I really like this chart.  It gives me a very quick and easy to see visual summary of my spending for February to March.  Obviously I need to cut down on going out to restaurants.  I was surprised to discover that "Alcohol" was actually very low which means I must be doing most of my drinking at bars, izakayas, etc.  

Next, I have a graph which breaks down my spending my the day:

I think this graph is more interesting and shows the breakdown of my spending by each day.  It goes from the 15th of one month to the 14th of the next.  I get paid on the 15th of every month and find it easiest to calculate spending on the same time frame.  The spike on the 16th is when I pay my rent.  The other big spikes are Costco trips (2/19) and drinking (3/6, 3/9, etc).  What I think is interesting is after my Costco trip I didn't spend much money even on groceries.  However when I did go drinking I continued to spend more money even after forking over tons of cash.  So in other words Costco trip good, eating out at restaurants bad.

I'm going to continue to track my spending like such and will try to include these pictures (perhaps better formatted) in future updates.  

How do you track your money?

Investing Update

I am new to investing but I'm not going to let a little thing like being a beginner keep me from my dream of financial freedom.  Personally I feel I can do anything as long as I accept my failures as learning experiences and try to find out why I failed.  In fact I like to fail right out of the gate because after I discover the reason for my failure I can adjust my path and be confident I am not heading in the right direction.  It's like when you are following GoogleMap on a cellphone and find out you just went 3 blocks in the wrong direction and now you have to turn around and head back.  If I had realized after just 1 block or 1/2 a block I wouldn't have to backtrack as much to get back onto the right path.

So far I can't say I have had an investing failure.  Of course maybe I have and don't know it yet (walking the wrong path on GoogleMap) or maybe I don't know what an investment failure looks like.  All I know is that all the companies I invested in are up.

I'm also receiving my 3rd dividend payment ever!  This one is coming from my holding in KO.  I was recently informed of a $7.65 dividend payment heading my way.  This is very exciting to me and brings my yearly dividend payments up to $23.93.  It doesn't sound like much now but I hope to grow this into an amount that pays for my expenses every month and that growth has to start somewhere.  I'll let it start at $23.93.

February to March Spending Breakdown

I keep track of my expenses down to the last yen.  I do this in Microsoft Excel and do it for the purpose of seeing where I am putting my life energy.  According to YMOYL money is nothing more than a representation of our life energy.  Life that we have given up at a job in exchange for money.  By tracking my expenses I hope to target unnecessary spending and kill it where it stands.

Let's take a look at my expenses from February 15-March 14 (this is my pay period).

Total Income:  JPY 376,279

This was a nice jump!  This month I worked extra at my part time teaching gig and I also brought in a little extra as an interviewer for the Eiken (an English proficiency test).

Expenses:
Rent  JPY 50,100
Eating Out  JPY 31,677
Groceries  JPY 17,236
Transportation  JPY 10,010
Bills  JPY 6,815
Entertainment  JPY 5,760
Grooming  JPY  3,980
Alcohol  JPY  2,288
Misc  JPY 2,880

Total Expences:  JPY  130,746

Savings Rate:  65.25%

I was really hoping to hit a 70% or even 75% savings rate this month but a few things came up that made me miss my goal.  First I missed my goal on lowering my eating out spending.  I was shooting for JPY 25,000 or less and was just about there but some friends that will be leaving Japan for good came out my way and I really wanted to see them.  They aren't exactly on the FI bandwagon so getting them to come over to my place for beers was out of the question.  We hit up some good Izakayas in Akihabara and Tokyo but just those two nights hit my expenses hard.

I also went over my groceries budget.  In Japan there is Valentines day in February and White Day in March.  Valentines is generally a day when girls (or women) give to guys (or men).  On White Day traditionally the guys who received goodies will then give back with other chocolates, cookies, etc.  I hadn't planned on receiving so many valentines (I work at an all girls school) and had to run out and buy some brownie mix.  Imported stuff like brownie mix or cake mix can be pretty expensive and so this holiday put me over my grocery budget.

Entertainment was for a baseball ticket.  On March 25th the Seattle Mariners (my home team) will play against the Hanshin Tigers and both my GF and I really wanted to attend.  We got a few other guys to go so I think it will be a really good time.  I don't do this often so I'm not too worried about this expense increasing.

Same with the grooming category.  A recent article on MMM talked about shaving and ways to save money on it.  I really don't know how people can use the same razor for months and months.  My skin is really sensitive and my beard very thick.  I tried to challenge myself and use the same razor for 2 weeks but around the start of the second week my shave just felt cheap and very dirty.  I usually also shave my head with my razor and after doing that and then going back to my face...  well, it wasn't pretty.  I'm going to go back to doing what I always do.  Shave for a week, shave my head, then change to a new razor.  A pack of 14 razors is about JPY 4,000 yen at Costco and it will last me for 14 weeks so a total yearly cost of JPY 12,000.  After ten years JPY 120,000.  I am willing to pay this to keep myself well groomed.

This next month won't be so pretty and I am sure that I will miss my savings rate goal.  I will be paying for my plane ticket home next month which will put a huge dent in my savings but it's something I have to do.

How have your expenses been?

Kabu.com

For any MMM readers out there I'm sure you are already registered and posting on their nice new shiny forums they have.  I think these forums are an excellent place to get information and bounce ideas of of like minded people.  Your questions don't even have to be about FI!  I asked about photography and learning how to use a camera and got great information from several nice users.

So far the best part of the MMM forum have been not only meeting like minded people but meeting other like minded people that live in Japan.  Shortly after joining the forum I was messaged by a very nice gentleman who is in a similar situation to me.  He lives in Japan, teaches English, and is seeking FI.  However my new friend is dead set on staying in Japan for the rest of his happy days and therefore he is investing his money in domestic Japanese equities.

This was a great wake up call for me to start looking more at Japanese stocks.  However I feel there are good and bad points for investing in the market you live in.  For example if I lived in the USA and my local McDonalds or Coke distributor burns down or is robbed I might get an itchy trigger finger to sell the stock (unreasonably so I know).  But by living in Japan I don't get bogged down with the "news" that most people are inundated with every day and I can let my stocks just sit there and go up and down as they wish while I collect the dividends.  It's very out of sight out of mind.  On the other hand I don't know what's hip or up and coming necessarily.  It's hard for me to find new trends or physically see with my own two eyes how busy a particular industry is.  This is what I want to take advantage of here by investing in Japanese companies.  I have an eye from the ground view of what Japanese people are eating, buying, and what is trending.  This I feel gives me many advantages.  Plus many Japanese products start out local and then go global.  Tomogachi or Pokemon anyone?

Everything I have ever read about investing harps on the fact you need to diversify.  Putting all your eggs in one basket is like betting all your savings on a horse (you shouldn't bet anyway).  Well what better way to diversify than to hold equities in multiple countries?  Further more it would be nice to be able to track the prices of my stocks in real time.  With the US market I go to bed and wake up and the trading day has both started and ended!  With Japanese investments I can keep a closer eye on them.

My new friend introduced me to a website called kabu.com.  Kabu is the Japanese word for "stock" making the site name pretty self evident.  I'm in the process of getting signed up now so I haven't actually started trading just yet, but I wanted to point out some of the differences between Japanese and US stocks.

First from what I was told Japanese stocks are in general not as volatile and don't jump around as much as stocks in other markets.  That is good for my heart and my health.  I can sleep soundly at night.  Commission fees are also very low here in Japan.  Reading right off of the nice little chart they sent me fees start at 141 yen for trades up to approx. USD 500 (I'm just slicing off zeroes not running it through a currency converter).  236 yen up to USD 1500, 330 yen up to USD 2500, and 614 yen up to USD 5500!  Those are some nice fees!

Nice fees!

In addition to the dividends that I want to collect Japanese stocks are also have what I translate as "stock holder hospitality."  These are basically presents that they send out to stock holders who own a certain number of their shares.  For example I plan on purchasing 100 shares of Asahi beer.  This is the number one selling beer in Japan and I happen to really enjoy it.  I see people drinking it all the time and it pays a nice dividend.  Plus if I own 100 shares they will send me a pack of Asahi beer

One example of stock holder treatment in Japan.

Buy some coke stock and get some coke related merchandise.  Buy Kyupi stock (they make mayonnaise) and they will send you some mayonnaise.  Not all Japanese companies have this kind of stock holder gift policy but many do.  There are catalogs you can get that will outline several companies dividend as well as what kind of gift they are sending out.  

I think this whole idea is very Japanese.  Most westerners would rather forgo the gift and get a higher dividend (after all the companies are spending money to send you this "free" product when instead they could just pay you a higher dividend and I could buy it from the store).  However part of the thrill of investment is the feeling of being special.  How often does Johnson and Johnson send you a bottle of baby oil?  Probably not very often.  If they did it might make you feel special and more connected or confident about the product or company.  To me this is the idea behind these share holder gifts.

What about you?  Want to or already investing in Japan?