Good investment options in Japan?

What good investment options are available in Japan? I see that real estate is not a viable investment option.

Background: As a parent of young children, I came across a book about the importance of teaching children financial literacy from a young age. What investment options in Japan would be good to introduce to young children? (It would be introduced in an age appropriate way of course.)

US treasury bonds? They are the safest investments in the world.

I'm not sure what exactly you mean by investments. There are plenty of bonds and savings deposits that will return money back to you in the US (I'm not sure how you get these in Japan, ask someone who works at a bank).

Japanese companies have a history of being inefficient mainly because of the government keeping them away from global competition so I wouldn't recommend buying any stock unless you've put many hours into studying the in's and out's of the company.

If you are involving your kid I would recommend something small. Maybe get a stock in their favorite company or something like that. My parents got me collectible coins that ended up being next to worthless and never taught me anything about money.

But in my opinion, the best way you could teach your child about being financially literate is by buying a book and reading it to them, discussing what the person in the book might do next and thinking what you two would do in that situation.

The Richest Man in Babylon- a collection of stories all related to working hard and making money. I wish these stories were told to me when I was a kid. You may want to read ahead first and censor it a little as it gets into stories about eunuchs and beatings among other things.

Delivering Happiness- this s an auto-biography written by the CEO of Zappos from his childhood to when he sold Zappos for 2 billion. The best part of the book is how he was trying money when he was young, selling homemade buttons through a magazine and running a pizza shop in college. It is a very easy read.

Would you mind explaining why you think real estate is not viable in Japan?

Given the insolvency of the USA I am not sure why US treasuries are a good idea, (The US government has been bankrupt several times, and the printing money option does not make them so good.)

There are the usual share/company options locally. The rail companies are doing IPOs, they might be an option.

(btw - Dilbert, the cartoon, recently had a comic about accepting investment advice from strangers on the internet)

Most of the markets in the developed world are paying very low rates of interest and offering low dividend yields on shares.

If all you want to do is teach a child, I'd suggest you get them used to pocket money, spending and saving, budgeting, etc.

If they want to save, get them a savings account. Beware, this may well put them off when they see how little interest is on offer!

If they get interested in the stock market, buy them one or two shares in a handful of companies. You will pay a lot, proportionately, in dealing charges, and you will also most probably earn very little, but if your aim is education then you won't mind that.

As a follow-up, I do get interest on my bank account of 0.001%. Not bad considering the central bank has negative rates (-0.01%). But trying to demonstrate the impact of compound interest might be a bit hard given the monetry policy in the country.

OP here.

Well, what I am thinking of teaching my children is that, when they receive their salary, they should allocate it wisely in assets that will bring in additional money for them. So instead of paying off all their expenses and then spending the rest buying frivolous (or even necessary) things and in essence saying goodbye to all of their money, they should invest a portion of their paycheck in passive and portfolio income, -- "to pay off their frivolous things, lol!"

However, from my understanding -- from reading past threads in this forum that explain why -- investing in real estate (passive income) is not ideal to do in Japan. I had at first thought maybe renting out a house might be a practical option, but maybe not, at least not in Japan?

Is it easy to build a portfolio income in Japan then? Something more substantial than interest from banks? So are stocks kind of iffy to do in Japan?

The book explains about the importance of investing in assets that will create a flow of income (apart from a job), so while saving, budgeting, etc. are good practices, financial independence is greatly enhanced by ensuring that assets which bring in an income source is invested in.

I guess I want to know if the author is simply lucky to live in the US where he can easily create passive and portfolio income and if, for us, living in Japan makes it unfortunately harder to do so. Or if it is possible, what assets to invest in?

By the way, if you can provide a direct link to the specific Dilbert comic strip referred to, that'd be something I'd like to see, just for fun:)

If you are reading it out of a book and have nil experience about the subject. Then you ain't gonna be able to teach your kids about it. Maybe best left to teachers and academics in colleges/university.

But that's the problem, they don't really teach it in the educational system, at least in the US where the author is from. And also, if we can just go back to the original question, which is "What are some good investment options available in Japan?"

(Just because I may not have experience in something doesn't mean it can't become a learning experience for both my children and me in which we explore a new topic together. It could possibly spark an interest in my children whereby they want to learn more about it than I might be capable of/interested in.)

investment is highly related to how DEEPLY you know tax laws and regulations.
you can't learn it from books and also it's not easy to teach it. need experiences.

Classic theory: shares pay more than bonds pay more than cash.
Shares are riskier then bonds are riskier than cash.
Japan has a stock market, a bond market, and a savings market. I can't see why you can't participate in all of these if you wish to.

It doesn't matter what country you are talking about. The investment game is the same. You can invest in almost anything. Risk vs reward.

It could be a simple as being a part owner in a ramen shop, buying shares in JR Kyushu. Some of the big companies have investment plans.

The fact you are asking a basic question does mean you are not ready or experienced by a long way to invest within Japan. I'm not typing it to put you down or offend. But just an observation.

I noticed you mentioned "schools." So they are school age? Not college/university/adult age yet? If so, how are they gonna get this money to invest?

You have to have money to invest. So they get a job. They learn to save. The open a high interest account. Then you'd go to an investment broker. Then when you gain enough experience, then you try it yourself.

Don't jump five steps ahead, start at step one.

http://dilbert.com/strip/2016-10-02

Also, you might like to compare the impact of printing money on your investments in the USA (and Japan) as while it might look like you have income, the "quantitative easing" hides a lot of monetry sins.

But, hey, I'm just a guy on the internet - most of the countries I've worked in it is illegal to provide financial advice without a license, so I won't offer any.

If your investment period is long enough and you have a good distribution, the risks get reduced significantly.

I would recommend to learn about diversification through low-cost index funds and ETFs. Then you can teach that rational investing is a long term (and often boring) project taking 10-20 years at least.

Quite good Japan specific resource can be found here:
http://www.retirejapan.info/

Thanks for the Dilbert fun!

And thank you very much for the retirejapan website!!!!!