For me Japan started as nothing more than a destination which I thought would be a great experience. I had not considered it from an expat point of view until we arrived and started spending money there. The affordability of day to day living in Tokyo really took me by surprise, and it got me wondering about it as a long term expat FIRE location.
Using our real world expenses in Japan, I will work through the FIRE related numbers. This will be primarily based on Tokyo in order to avoid mixing numbers between Tokyo and Osaka (which our September budget does). While the focus is on a family of four I have also provided a breakdown of what it would cost for a single person to live in Tokyo.
Assumptions
To simplify this scenario, I’m making some assumptions:
- You are selling everything and living internationally in Japan. Ignoring visa/residency restrictions and pretending you can live there indefinitely.
- You are using international health insurance, something similar to Cigna Global. You may have different more affordable options depending on your immigration status.
- You will not own a car but use public transportation instead. This is by far the frugal option if you don’t have a specific need for a car. We made all local trips farther than walking distance via train, and found it reliable and extremely affordable.
- You will be renting and not buying. From what I understand foreigners can in fact buy real estate with no limitations and the same rights and protections as Japanese citizens. However, I lack expertise and reliable numbers when it comes to buying in Japan so I’m not going to take a crack at that scenario.
Family Of Four
This scenario is of course a real world scenario based on the actual spending of my family of four in Tokyo.
Big Picture Numbers
Starting with the big picture, how much does it cost to live per year, and how much is needed in investments? Knowing the annual costs, we multiply that by 25 to get the investment total needed which allows for a 4% withdrawal rate that covers those expenses. The detailed numbers making up the spending are shown in the next section.
| Monthly Expenses | $4,842.95 |
| Annual Expenses | $58,115.44 |
| Investments Needed | $1,452,886.00 |
Detailed Monthly Budget
Commentary has been provided inline on those budget items that require clarification or explanation.
| Accomodation | $2,475.42 | This place (2 bed, 1 bath) in Tokyo while very nice, was pushing the limits of what a family of four can comfortably live in. We did it for five weeks, so I’m confident we could do it permanently if we had to. Some families in the world live in as tight or tighter quarters in squalor, however for what we’re used to we would want a bigger place long term. |
| Cigna Global Silver w/ US | $612.18 | |
| Grocery Store / Food | $713.70 | This number is a projection since we did not buy traditional groceries and eat at home. However we did go to grocery stores enough to see that the prices agree with numbeo projections, and when numbeo has enough data it is very accurate. If your family of four chooses to never eat at home, change this number to $2K. |
| Disc | $452.32 | This was our actual spending doing lots of fun stuff. I doubt a family of four living long term in Tokyo would keep that pace up and this spending would decrease. |
| Clothes | $200.00 | Clothing was very similar in Tokyo, same number as CO. |
| Life Insurance | $99.81 | |
| Vaccines | $91.58 | This is the full set of vaccines including the most costly, Japanese Encephalitis. |
| Gifts | $60.00 | |
| Visas | $0.00 | |
| Transportation | $50.00 | We actually spent $42.50 within Tokyo using the trains a lot, but I rounded this category up to 50. If you are doing inter-city train rides during the year you would want to increase this further as this basically assumes you stay around Tokyo. |
| Phone (Google FI) | $46.46 | |
| E-Sim | $20.00 | We use Airalo |
| Virtual Mailbox | $18.49 | We use PostScanMail |
| Cloud Storage | $2.99 |
Single / Solo Traveler
If you are discouraged by the FIRE number required of $1.45M, you need to remember this is for a family of four. For a single expat you could get an even smaller place with one bedroom or no bedroom, bringing down the biggest cost category. The second biggest cost category, food, will also drastically decrease. A single adult would be closer to $250 or even less. The third biggest category, health insurance, would also drop. Just quickly working through a single person’s budget, the FIRE number drops dramatically to an unbelievably reasonable $744K:
Big Picture Numbers
| Monthly Expenses | $2,482.20 |
| Annual Expenses | $29,786.43 |
| Investments Needed | $744,660.75 |
Detailed Numbers
| Accomodation | $1,500.00 | Studio in a central area |
| Cigna Global Silver w/ US | $300.00 | Reduced for one person |
| Grocery Store / Food | $250.00 | Reduced for one person |
| Disc | $226.16 | Reduced for one person, but leaving at half of a family because a single person is probably more inclined to get out and do things. |
| Clothes | $50.00 | Reduced for one person |
| Life Insurance | $0.00 | |
| Vaccines | $22.90 | Reduced for one person |
| Gifts | $60.00 | Could probably be reduced |
| Transportation | $20.00 | Reduced for one person |
| Phone (Google FI) | $25.00 | Reduced for one person |
| E-Sim | $6.67 | Reduced for one person |
| Virtual Mailbox | $18.49 | |
| Cloud Storage | $2.99 |
Conclusion
Japan, and Tokyo in particular, really surprised me with its affordability. It may have been my decades old impression of the cost of Tokyo that had me thinking it was completely unaffordable. Over time, with Japan not keeping up with world inflation, it slowly went from unaffordable in the 90’s to a moderately good value today.
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