Complete Mustache-less Newb; Guidance, Please!

[okta614]

Hello Mustachians, I could use a ton of help!

I'm currently living in Japan as an English teacher (American citizen). I make about Y3,000,000, which is about $34,423 at current exchange rates. I currently have about $14k in the bank, but am looking to move it to somewhere that gives me higher interest rates (I could definitely use help with this!). I'm also currently single. My current expenses per month are:

Rent: Y50,000 ($571.88)
Internet: Y6268 ($71.69)
Cell phone: Y5000 ($57.18)
Electricity: Summer - Y3000 ($34.42) / Winter - Y5000 ($57.18)
Gas: Summer - Y4000 ($45.74) / Winter - Y6000 ($68.63)
Food: Y20,000 ($228.70) (I'm trying to reduce this cost as low as I can without being reduced to eating carbs or junk.)

In total, this adds up to summer Y88268 ($1012.83) and winter Y92268($1055.09).

With a monthly savings of less than $2000, how can I reach mustachian-levels of early retirement ASAP? Most people that I read about doing this are making something in the $60k range, which is impossible for me. I am already planning to cut my internet bill as soon as my contract is up, so that will save me the Y6268 ($71.69). I also plan to go hardcore mustache-mode on my electricity and gas, especially during the winter months. Let's say that knocks off a theoretical Y1000 ($11.44) off of gas and electricity for winter. That will still only leave me with a theoretical $1900 a month to stash in the bank. What else can I do to give my early retirement a speed boost? Any and all help is super appreciated!

[Emg03063]

Are you living alone or with roommates?  Are you on a one year teaching contract, and if so are you planning to renew?  Do you have the ability to move?  Honestly, at 67% savings, you're doing fine.  I would focus on enjoying my experience there as much as possible more than trying to trim expenses too much more.  On the income side of the equation, can you start a side hustle tutoring?

[okta614]

I'm living alone and work on a year-to-year contract. I plan to stay with this school for at least 3 more years. I'm not sure about the ability to move, but I don't think it would be possible.

I definitely agree with you on enjoying the experience, and I am loving it here. The biggest problem is that it's pretty damn expensive to do even some of the less-expensive things that I did back home. A day out in the city can easily cost $70 - 80 (transportation costs about $30 - $40 alone).

As far as private lessons, there are opportunities; I just haven't found any yet. I'll definitely keep my eyes peeled, as you can make about Y2000 per hour (about $22).

Thanks for the reassurance. It is a bit disheartening reading about people who make 2 - 3 times as much as I do, who'll be able to retire in under 10 years.

[boy_bye]

Don't despair!

Remember this post?
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

With a 67% savings rate, you could retire in 9-10 years, too! It's all about how little you are able to live on and it sounds like you are doing great in that department.

[Hamster]

As far as private lessons, there are opportunities; I just haven't found any yet. I'll definitely keep my eyes peeled, as you can make about Y2000 per hour (about $22).

Is it really that low now? If you have a degree and look well-dressed and professional and US or Canadian native speaker, I'd expect you could make much more than that. In Taiwan and Japan in the mid-90s, it was pretty common to get over $30 per hour with the right private English gigs. Even some of the Dutch people I knew with pretty strong accents were getting over $25 per hour then. The sad thing is Asian-American friends of mine got paid less since they didn't "look American".

[skarn]

This isn't a race! There's no prize to getting to FI first.

There will always be people faster than you are and people slower than you.

Keep your head down, keep the savings rate up, do what you enjoy doing and look around for opportunities to make more income on the side. Your time will come.

[Togoshiman]

I was an ESL in Japan teacher once upon a time.  Some thoughts:

- Change schools, cities, jobs, etc.  Increasing your earning potential reasonably is a principle of MMM, Richest Man in Babylon, etc.  No shame in doing that.  Consider a move to Tokyo, getting your TESOL, going to the highest bidder and so on.  I did all this on purpose and added Y100,000 a month without much difficulty.

- Network the senior gaijin community like crazy rather than trying to do the private student thing all on your own.  I took over a departing person's night job teaching a local labour union that paid me more than my day job.  I feel bad saying this given your situation (and this was a decade ago when money wasn't as tight for English teachers), but I doubled my salary by doing this.  I was young and the work was easy too.  Think bigger rather than incrementally adding income.

- Are you trying to use ESL teaching as your one vocation and then ER?  I saved like crazy and funded law school, then started ER planning with my now much higher income.  Later start, faster finish and all that.  If you're young, consider a two-step like this if it works for you.

- If the answer is yes that you would prefer to stay an ESL teacher, do you plan to stay an ex-pat permanently?  If so, you can retire in Belize, Mexico and a dozen other places where your income and savings are top of the heap.  Rather than feel poor compared to high-income earners in first world big cities, consider you're already out-earning much of the world you might actually like to live in.  You might conceivably retire on the 7-9 year timeframe and live very well by moving rather than staying in Japan, US, Canada, etc.

- If you do like the ESL thing, are you tied to Japan?  I know plenty of people who taught in Saudi, Hong Kong, Japan, etc. and built very good incomes.  I also know people who added a second skill and income stream so they were truly mobile and secure, e.g. freelance journalism, yoga or pilates teaching, etc. that could be done anywhere.  Bonus is these skills let you work part-time anywhere in the world if you ER.

- Play pachinko - I knew a guy who got so good he got "visits" from large men in black cars who convinced him to give up his hobby.

Have more thoughts on your situation having once been in it myself, but these are a good start.  Good luck.

[Togoshiman]

Oh, and Abe is about to embark on devaluing the yen.  Get your savings into US dollars or something ASAP.  International accounts at HSBC were simple to set up back in the day.

[okta614]

Thanks for the reply!

1) Currently, I'm in the JET Programme, which is one of the highest-paying ESL jobs available in Japan. I'm sure I can make a bit more though teaching at private schools, but they require more years of experience than I currently have. Also, I'm living in a small town with a relatively low cost of living. Even with my rent being pretty high (compared to other JET Programme participants who get subsidized housing in my area; something I unfortunately don't get), there are some small benefits (an amazing landlady who gives me free food and is always super helpful; living about 5 minutes away from school and two minutes away from the nearest grocery store; living in a town where I don't need a car or scooter to get around). But I do agree on furthering the education aspect. I have a 90-hour certificate in TESOL, but I've read that in order for it to mean anything in the real world, you need at least a 120-hour certificate. I'll definitely look into those options and if the potential earnings outweigh all the benefits that I experience now, I'll make the move.

2) That's the hard part about living in a small town: almost no gaijin except for the people that are in the program with me. I did meet a guy who works in a semi-managerial position at a bigger eikaiwa company, but he seems to be cemented there. Occasionally they're looking for a person to run a few classes in my prefecture, but the times and travel distance make it hard for me to be there (major time conflicts with my current job).

3) I'd like to pursue my passion after my JET contract completely dries up (in about 3 years), which is working in the broadcast field, but I think that will be extremely tough as I don't speak Japanese to even a conversational level. Factor in the Japanese work ethic with the relatively low-pay of a camera man/production assistant, and it seems like this possibility isn't looking so rosy. So realistically, I figure I'll be in the ESL game for a while; at least until something better pops up. I know I could go back to school and maybe get a degree in programming or something, then MMM my way to ER from there, but I honestly love living in this country. It's been one of the best decisions of my life: I've been happier and less-stressed living here. I'm all for furthering my education/skill-set to getting a higher-paying job, but ideally, I want to do it in Japan.

4) I've really kicked around the idea of living somewhere cheaper, like Thailand or Indonesia. The idea that I can live like a king on a modern-society's-miserly income is so tempting. But I do know there are some luxuries that I'll be giving up. For example, cleanliness, safety, and comfort (though this can be debatable). But, replying to this point has given me a good idea. Rather than spend all my time in Japan, once I hit ER, I can live in a low-cost tropical paradise for most of my time, and take 3 month vacations in Japan. That actually sounds quite enticing!

5) I'm not tied down here. I have no friends and no family. I have a girlfriend, but we're not super serious, and I don't have plans on settling down with her. My contract is year-to-year, same with my housing contract. Honestly, if I get tired of being here, I can certainly pack up and move. But I do love being in Japan. The culture, the people, the socialrules; they all seem to suit my personality much better, and make me feel much more comfortable than I did back in the States. My cousin was actually looking to teach in Dubai. From what she said, they pay handsomely for good English teachers. But one advantage I do currently have in Japan is that the job is easy, for decent pay. I have TONS of free time at school to read MMM, learn about investing, or just goof off on Facebook if I want to. My school is a technical high school and offers a lot of real-skill courses. So I occasionally go to the baking classes and learn to make really impressive and delicious cakes. I can also learn wood-working, metal working, and farming if I want to. Plus, I have access to the school's gym, so I can work out every day after school and on the weekends. The school is also very encouraging about me joining a club, so I've recently joined the Judo club at school. All of this is actually seen as a good thing in my peer's eyes, and I get paid to do this stuff.

6) One of the teachers here actually plays slots "professionally" and walks home with about $3000 - $4000 extra a month. I've asked him to teach me his ways, but he says that it's a bad habbit and he won't, hahaha.

7) Oh, don't worry about that! I've been sending all of my money home, so I actually have very little in the bank here. I've been doing my best to take advantage of the weak dollar, so I've probably earned an extra $1000 - $2000 by sending my money home. But I do know about Abe and his plans and I'm sad to see the gravy train coming to an end.

I know a lot of my points sort of say, "Thanks for your advice, but I'm not gonna take it". I don't mean that at all, and you definitely made me think of possibilities that I, otherwise, wouldn't have thought of. But I just wanted to further explain my situation and show the hidden benefits of my current situation. I can't be at this school forever; my contract can only be renewed for 3 more years, but I'd like to take advantage of it for that duration. After that, it's all free game. Who knows, maybe I'll move to China and do some teaching there after. But for now, I feel that I have a pretty good thing going, and something has to be SUPER good to get me to move on. I do appreciate all of your advice, though. If you have any other points or advice, I'd be glad to hear them!

I was an ESL in Japan teacher once upon a time.  Some thoughts:

- Change schools, cities, jobs, etc.  Increasing your earning potential reasonably is a principle of MMM, Richest Man in Babylon, etc.  No shame in doing that.  Consider a move to Tokyo, getting your TESOL, going to the highest bidder and so on.  I did all this on purpose and added Y100,000 a month without much difficulty.

- Network the senior gaijin community like crazy rather than trying to do the private student thing all on your own.  I took over a departing person's night job teaching a local labour union that paid me more than my day job.  I feel bad saying this given your situation (and this was a decade ago when money wasn't as tight for English teachers), but I doubled my salary by doing this.  I was young and the work was easy too.  Think bigger rather than incrementally adding income.

- Are you trying to use ESL teaching as your one vocation and then ER?  I saved like crazy and funded law school, then started ER planning with my now much higher income.  Later start, faster finish and all that.  If you're young, consider a two-step like this if it works for you.

- If the answer is yes that you would prefer to stay an ESL teacher, do you plan to stay an ex-pat permanently?  If so, you can retire in Belize, Mexico and a dozen other places where your income and savings are top of the heap.  Rather than feel poor compared to high-income earners in first world big cities, consider you're already out-earning much of the world you might actually like to live in.  You might conceivably retire on the 7-9 year timeframe and live very well by moving rather than staying in Japan, US, Canada, etc.

- If you do like the ESL thing, are you tied to Japan?  I know plenty of people who taught in Saudi, Hong Kong, Japan, etc. and built very good incomes.  I also know people who added a second skill and income stream so they were truly mobile and secure, e.g. freelance journalism, yoga or pilates teaching, etc. that could be done anywhere.  Bonus is these skills let you work part-time anywhere in the world if you ER.

- Play pachinko - I knew a guy who got so good he got "visits" from large men in black cars who convinced him to give up his hobby.

Have more thoughts on your situation having once been in it myself, but these are a good start.  Good luck.

[okta614]

Yeah, the private rates have dropped a lot since then. A lot of companies have capitalized on English teaching and it's such a common commodity that the supply is much higher than the demand. I hear that teaching business English (and in the same vain, specialized English, i.e. medical, engineering, etc.) pays much more. Unfortunately, I have no knowledge or experience in teaching it.

As far as private lessons, there are opportunities; I just haven't found any yet. I'll definitely keep my eyes peeled, as you can make about Y2000 per hour (about $22).

Is it really that low now? If you have a degree and look well-dressed and professional and US or Canadian native speaker, I'd expect you could make much more than that. In Taiwan and Japan in the mid-90s, it was pretty common to get over $30 per hour with the right private English gigs. Even some of the Dutch people I knew with pretty strong accents were getting over $25 per hour then. The sad thing is Asian-American friends of mine got paid less since they didn't "look American".

[okta614]

Thank you both! This is so encouraging!

This isn't a race! There's no prize to getting to FI first.

There will always be people faster than you are and people slower than you.

Keep your head down, keep the savings rate up, do what you enjoy doing and look around for opportunities to make more income on the side. Your time will come.

Don't despair!

Remember this post?
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

With a 67% savings rate, you could retire in 9-10 years, too! It's all about how little you are able to live on and it sounds like you are doing great in that department.

[Togoshiman]

A few other thoughts on this conversation.

- If you have free time and love Japan, learn Japanese.  I mean all the way.  If you're going to accept a certain wage and be tied to a location, and be in a place with no foreigners, then get off facebook and learn that language cold.  It's really not that hard with time and dedication.

- For permanent living in Japan, checkout forclosedjapan.com.  You can buy yourself a nice house in the country cash and plan on retiring in it if you want.  I know people who have done this successfully, nothing more than money and paperwork (and convincing sig others to live in an older house - you know how Japanese are).

- Think hard on your town and job, especially over the medium to long-term.  It's a cliche, but tends to be true in every developed country in the world that higher salaries in the city still see one further ahead despite increased living expenses.  I was exactly where you are and I bailed it to Tokyo and got myself the lifestyle and income I described above.  Remember, the side gig thing was 50% of my income.  That's far more likely to occur in a big place than a small one.  If you weigh the options and decide to stay, just understand the money you potentially leave on the table.  The money is not JET vs. eikaiwa, it's JET vs eikaiwa + night job + private students and so on.

- Something which seems small but can have a big effect on your life: if you end up with a person from the town you are in.  I was in the boonies and the thought of making that trip back all the time from North America would have been a nightmare.  I know a lot of people who married locals and there's a lot to be said for love and all that.  But thinking practically about the rest of your life and 40 years of annual flights back and forth is a real financial and personal impact all other things being equal.  If you do love it and stay forever, you still will likely take that annual (expensive) flight back to your home country to see family, potentially with a family in tow.  Just something to think about.

- If you really dig Japan (and I do and did as well), no danger in staying forever.  David Arbuto became a citizen and you can too or at least become a permanent resident, buy property, etc.  Honestly, the management or senior teachers still earn $50k-$70k which is a decent honest income in any first world country.  Taking the long view, you can easily have the life you want including mustachianism.  I sometimes wish I had done this rather than come home and kill myself to re-integrate and enter a conservative profession.

- Lastly, if you do want to do the journo and mass comm thing, it can be done there.  You could bail for a year to Australia for a cheap grad degree (which many people I know have done) and be the ex-pat version of what you want.  Or you could go hardcore on the Japanese and simply integrate into Japanese society, the job stream, etc.  This is far rarer but it not nearly as difficult or controversial as a bunch of young english teachers would have you believe.  I know Canadians, Americans, Malaysians and Chinese who have all successfully immigrated to Japan, learned fluent Japanese and simply joined companies like anyone else would.  These are not on the margins of society either - one fellow I know is an engineer for a car company and got hired out of a Japanese university like everyone else.

- My last comment, and I sincerely don't mean to sound patronizing, but is just an observation.  You say you truly love Japan and want to be there long-term.  You say you love the culture and life.  But then you say you don't have ties and don't speak great Japanese.  My honest take (this is based on many years of living in Japan followed by many years of being back in my home country) is make a clear choice right now which way you are going - ex-pat, learn a bit to get by, live on the margins and not be subject to social expectations, bail whenever you get bored, tired, in trouble, etc.  Or, integrate and learn that language and culture cold.  The least successful people I see and saw were the ones who stayed for 15 years and barely spoke the language.  They were always the most precarious as well in terms of having no backup if they got canned from their jobs.  They'd also been gone so long they were virtually unemployable in their home countries.

Just some thoughts.  Good luck.

PS - I originally said my experience was ten years ago, but upon reflection realized it was a baker's dozen since I left, let alone arrived.  Now I really feel old.

[trammatic]

I know I could go back to school and maybe get a degree in programming or something, then MMM my way to ER from there, but I honestly love living in this country. It's been one of the best decisions of my life: I've been happier and less-stressed living here. I'm all for furthering my education/skill-set to getting a higher-paying job, but ideally, I want to do it in Japan.

Degrees are a lot less important in the IT/coding world than other professions.  Check out the code academy online for free and maybe try to learn a language or two if you're really interested.  Nothing says you can't code for global contracts from Japan.