FIFoldPath

Monthly Financial Snapshot: October 2022

Once again, more of the same. Yen has fallen to about 145-150 range, so my income and expenses both continue to drop in USD terms. As I'm sure I've mentioned before, this is ok for me in the short term because I have a lot of USD savings which I am able to spend on daily expenses. However, if this situation continues long-term it makes it difficult for me to invest my earnings in the US market since the exchange rate is so unfavorable (and unfortunately as a US citizen it is extremely difficult to open investment accounts outside of the US thanks to FATCA regulations). In addition, while there hasn't been too much inflation in Japan over the past year or so (about 3%), eventually inflation will probably pick up even more to match US / EU inflation levels if the currency remains this weak. Combine that with the much lower salaries in Japan (in USD terms, I have yet to catch up to my new-grad salary of $68k I was earning in 2015...), and it could be a bad situation for workers here. I am very fortunate to have saved and invested enough in my early career that my investment portfolio serves to partially shield me from economic turmoil. Thanks, past me!

The markets have also continued to decline as well, which is kind of disheartening but at the same time the lower valuations means higher expected returns going forward. Since it's approaching the end of the calendar year, I will soon need to look into how much I am able to Roth-convert this year without US tax consequences. Hopefully the inflation adjustments to the US tax brackets will give me more room to convert!

Here's a summary of my financial position at this point:

Description 10/22
Total Expenses $3,501.11
Gross Income $6,250.48
Taxes $731.16
Net Income $5,519.32
Savings $2,018.21
Savings Rate 36.6%
Net Worth $ 386,483.59

Projected time to FI (assuming 6% growth and 4% withdrawal rate): 7 years, 3 months.

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