Exchange Rates

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I try not to obsess about it, but I just can’t help it.

It doesn’t help that I get a daily email from Transferwise telling me how much the dollar costs in yen.

Part of the problem about me being an American living here in Japan is that my earned income is in yen but my retirement savings accounts are in the US.

I guess I should backtrack and say that I never saved when I was in the US because I was never fully employed at home. Every time I was home, it was more of a pit stop to wherever I was going next. After graduating college, my first full time job was in Japan. (I never saved then, either). After I finished my stint working, I decided to get my Master’s degree but also wanted to go back home. When I was home those few months, I worked part-time as an SAT tutor for the Princeton Review and as an after-school program director. (Still, I never saved anything even though I was planning to go to grad school.) I worked part-time while applying and waiting for grad school results.

Grad school was also international. I earned my master’s degree in International Relations as I aptly studied in Europe and Asia. I was living off of student loans so there was no way I could save any type of money. After finishing my degree, I was back in the US but I then had to get married. To get ready for that, I became a substitute teacher. It was good because I could choose to go in to work or not. On days when I had to do wedding stuff, I chose not to work. On other days, I was in different schools.

So with this history of not being in a place at any time, I just couldn’t get the habit of saving anything for retirement. I wasn’t even thinking of retirement.

Fast forward to Japan after I got married. Finally, I was able to settle down and found jobs that paid well. I then had to pay back my student loans, but I knew I had to start saving as well. I decided to do both. When I was finally ready to start saving, I found out that the IRS penalizes you for heavily if you open up an account with a foreign brokerage firm. I also found out that major brokerage accounts like Vanguard and Fidelity didn’t want to deal with Americans abroad specifically because of this complicated tax situation. So I couldn’t open up new accounts with any of those firms.

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Wah wah.

So there goes the simple solution of me investing with Japanese institutions. It just seemed complicated so I gave up. I started saving in cash instead. My money was not growing, but it was still better than nothing. Then I found out about Betterment and Vanguard. On a whim, I decided to just go for it. I had nothing to lose if my application got declined. Since I still had a US address under my parents’ home, I was able to apply and open up an account for both. I just left the employer part blank (I guess even people who were unemployed could apply).

Well, what do you know, I got approved and I was able to open up an account at both of those firms. (I’ll go into details about how this is not really the best solution, but it is still better than nothing.)


So with my brand spanking accounts open, I had to wire money overseas.

Cue Transferwise. This company offers the best rates for transferring money to my US account. Everything is done on an app that you can download on your smartphone. The only hassle is dealing with Japanese banks that are so surprisingly slow when it comes to adopting modern technology like internet banking. They also offer daily alerts to let me know when how much the dollar is worth in yen.

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So I’ve been doing this for the last five years, diligently saving as much as I can send back to the US while keeping an emergency stash in yen.

The problem is that I feel like I am “timing the market.” I notice that I definitely wait until the dollar is sufficiently cheap enough that I transfer huge amounts of cash back to the US. I don’t dollar cost average every month. Instead, I wait until the perfect time to do it. This leads me to being very inconsistent. Last year, I only transferred money twice–which means I didn’t really consistently save. The dollar was worth ¥115 yen and I thought the price was too high so I was going to wait until it dropped below ¥110. When it did, I decided to wait until it dropped down to ¥109 because that would be cheaper.

The cycle continued. It dropped to price point I wanted but I didn’t transfer money. Instead, I hoped for cheaper. Inevitably, the price would go up again. This meant I had to wait until the next time it was “low enough.”

red roller coaster
Photo by Stas Knop on

I realize now how stupid this whole thing is. It’s inefficient to wait for so long because I am not keeping my money in the accounts for it to grow. Instead, it’s sitting in a savings account earning minus interest rates–the policy issued by the Bank of Japan three years ago.

This year, I’ve been more consistent transferring money. I decided not to worry too much about the exchange rates. However, it still hurts when I send money at a rate that I think is pretty good but come to find out that the next day’s rate was better.


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