UnThreaded | Threaded | Whole Thread (20) | Ignore Thread Prev | Next
Author: vanonuma Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1632  
Subject: Re: Investing as US Expat Living in Japan Date: 8/27/2007 7:56 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Torachan,

Let me start by answering from the bottom of your mail, as you need to establish the basic stuff first. If you do not have a bank account in the U.S., that would be the first order of business. I found an on line bank called Telebank many years ago and they were bought by E Trade and are now named E Trade bank. You can get an ATM card and checks from them. You can open this account with a foreign residence address but if you have a U.S. residence -- maybe you keep a room still at your parents house -- I would recommend having a U.S. address. It will not impact your taxes (of course some states like NY and California are more aggressive about taxing expats, but just check). You have to file for U.S. government taxes anyway. The U.S. government does not really care where you have a bank account or what investments you make. You just have to report it.

A bank account with a U.S. address allows you to, for instance, pay .99C for a song on ITunes instead of 150 yen. There are a lot of shops on the internet that will only take a credit card with a U.S. residence, so it is mighty convenient. It is also helpful when paying for stuff because a lot of merchants in the U.S. still prefer check over credit card. I recently purchased a container full of furniture for my new house here that was paid mostly by check or direct debit. If I had wired from Japan it would have been probably 30,000 yen in fees and 5 hours at the bank, minimum.

Additionally, once you set up your brokerage or bank account, you will find that they only will wire to a bank account with your name on it. This is another important reason to have a checking account, besides the fact that writing a check is free compared to wire payments of $30.00. Whether you stay in Japan forever, you want that bank account.

Once you establish your bank account, make a decent sized transfer to fund it so you are not doing it once a month. Many people get hung up by the FX rate but if you are making transfers of smallish amounts, calculate the cost of the wire transfer vs the movement of the FX by 5 yen either way. There is not going to be a cheap way to get yen into $ unless you have a buddy with $. Any friends that can give you a USD check in return for yen cash? Just don't turn it into a business before you get your FX lisence. I have found most banks charge around 3,000 yen for a transfer. The business is costly for them as well with the new money laundering laws that require them to keep detailed records of the transactions.

E Trade is great. They have lots of research, clear record keeping, reasonable commissions, and you can do a lot of international investing from there as well. I am talking about the U.S. etrade, not Japanese etrade. BUT The important thing is where you need these assets. Do you want to use them as collateral? If it is in a foreign country's account, I don't think you can use the assets for collateral for a loan in Japan. That goes both ways. If you want to buy a house in the U.S., you are going to want to have some assets there as well.

To the extent this investment will be going to retirement, I would check into the IRA again. Just call the IRS or a tax consultant. I think that earlier advice about Americans off shore having an IRA is erroneous. As long as you are filing your taxes in the U.S., I do not see why you cannot ask them. My accountant does not see a concern with it, and the IRS has never challenged me despite getting the statements and they know where I live. And Merrill Lynch did not stop me when I opened the account...Importantly, start socking the money away. Getting it out of your main bank account where it can be spent on golf or sushi is the top priority, regardless of whether you open a second Japanese bank account or wire the money overseas.

I have found the stock picking from MF to be good value and with the Etrade account's low costs, it is a potent combination. And very important, reinvest your dividends because you are buying the stock free of commission that way. It adds up quick!

Although I have invested in Japan is a big way, I am a speculator. Without a doubt, I have a much clearer understanding of the U.S. companies I am buying, I know that I am getting news about as fast as everyone else, and that if the market is rigged, that I will have recourse in the courts. My investments in Japan are based on the belief that this huge overhang in retirement money that is still mostly in cash is going to come into the market until the valuations reach stupid levels again. I don't know if that will be a Nikkei 22,000 or 25,000 yen, but I think it is reasonable to expect it. But I do not have any faith that I am getting news as fast or that insiders will be controlled or that the market is transparent. It is much better than the old days, but just look at what happened to Steel Partners with Bulldog Sauce.

Hope this helps.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (20) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Macro Economics

2.1: The Labor Pool Problem
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement