Recently, I was thinking why Japanese are so rich, and a few ideas popped up. First of all about Japanese economy, Japan has huge money reserves and positive balance of trade. Even though, because of global financial crisis, gross domestic product fall 0.7% in year 2008, for 7 previous years economy was growing on about 1-2% every year. US on the other hand have huge amount of debt. US’s government produces obligation bonds as much as never before and negative balance of trade rates billions of dollars. The country is in very deep debt to the world.
What about people? Japanese are getting more and more rich every year, because it is a part of Japanese mentality to save money for future instead of living from paycheck to paycheck. Japanese banks are trying their best to advertise credit products and different types of loans, but the nation not used to live in debt. Americans have opposite mentality, it is so common to see people who spend all money they make and leave no savings for the future. Even more, most of Americans have debts, actually huge debts. Many of them have higher amount of liabilities than assets, frankly speaking they are slaves of their debts.
Let’s look at an average middle-class Japanese family. Family consists of 3-4 people, they live in a small 2-3 bedroom house or 2-3 bedroom apartment. They own their property, mortgage already paid. Usually they have one or two 4-5 years old cars of Japanese brands. Household head has government or company guaranteed pension plan that would guarantee income enough to keep same spending habits of the family for entire life. They also have savings in bank, which are sometimes hundreds of thousands or even millions of dollars.
What does average middle-class American family have? They have large house and large amount of unpaid mortgage on this house. 1-2 year old car for every member of the family. Pension plan like 401k that is actually stock market depending pension plan. It doesn’t guarantee income at the time global financial crisis. A little or almost no investments and savings. A few credit cards with unpaid amount of a few thousands dollars…
The bottom line is that Americans used to spend more money than they make. This will inevitably lead to poverty of the nation. Contrary, Japanese spend less money than they make… and it is the answer why Japanese are richer than Americans.

-O.

Ok yeah, I will completely agree with you on a whole Japanese tend to have much healthier money habits then the majority of Americans. However I see where Americans are slaves to their debt, Japanese are slaves to their jobs. Since traditionally in Japan it was expected to work for the same company your entire life and then be taken care of after retirement Japanese don’t make necessary plans to become financially independent and their entire lifestyle revolves around their company. Once that job or pension is gone that person is left in a very difficult position. As America, the largest buyer of Japanese exports falls further into recession and stops buying Japanese products, Japanese businesses are going to be looking for ways to cut costs just to stay in business and one of the fastest ways to cut costs is on payroll and benefits. You will see many Japanese learn that they should have not relied on their “guaranteed” job and company to look out for their own and their family’s well being.

As for Americans I am not currently feeling very sympathetic. We have been living way beyond our means and very irresponsibly for a long time now and I think now we are finally getting the slap in the face we need. We’ve had a credit fueled party for the last 40 plus years and now it is time to finally pay for that party. With all of this we have managed to create the most self entitled, spoiled, out of touch with reality generation ever.

I think the best thing that will come out of this financial crisis is a big return to some basic financial habits. Things like not taking on so much credit card debt if any at all, saving for the things you want and actually working to pay off your mortgage. I believe people are finally realizing that living your life based on how much debt you can afford to pay on your salary is no longer sustainable.

-T!