“Just open a NISA and start” is bad advice if you skip the preparation. I opened my NISA before doing any of these five things, and I made expensive mistakes that took me 18 months to recover from. Here’s the checklist I now use whenever someone asks “how do I start investing in Japan?”
Step 1: Know Your True Take-Home Pay
Most people quote their gross salary. For investing decisions, what matters is your monthly net deposit (tedori) — what actually arrives after income tax, resident tax, pension, and health insurance.
Pull last month’s salary statement (kyuyo meisai). Look at the bottom line. That’s your number. If your gross is ¥6M/year, your take-home is roughly ¥360,000–¥390,000/month depending on your bracket.
Step 2: Build a 3-Month Emergency Fund
Before investing, hold 3 months of total monthly expenses in liquid yen. For most salarymen in Tokyo, that’s ¥600,000–¥1,200,000. For foreign residents on work visas, double it — your visa is tied to your job.
Park this in an online savings account or short-term JPY time deposit. The yield doesn’t matter. The accessibility does.
Step 3: Define Your Risk Tolerance (Honestly)
Risk tolerance isn’t “I can handle losing money.” It’s “I won’t sell when I see a 30% drawdown.” Most people overestimate. Here’s a sanity check:
- If your investment dropped 20% tomorrow, would you sleep?
- If it dropped 30% over 6 months, would you keep buying every month?
- If your friend told you “I sold everything, you should too” — would you hold?
Be honest. Conservative answers mean a more balanced portfolio (mix of stocks and bonds). Aggressive answers mean you can go heavier on stocks. Lying to yourself here costs the most.
Step 4: Set a Concrete Goal with a Number and a Date
“Save for retirement” is not a goal. “Have ¥30 million invested by age 50 to fund partial retirement” is a goal.
Backward-calculate your required monthly investment. Use a simple compound interest calculator. Assume 4% real return (conservative) or 6% real return (typical historical equity). If the required monthly amount is impossible, you have to either increase income or extend the timeline. Don’t try to “make up” the gap with higher-risk bets.
Step 5: Compare Brokers Before Opening
The biggest Japanese brokers for residents are:
| Broker | Best for | English support |
|---|---|---|
| SBI Securities | Lowest fees, widest products | Decent (deep menu) |
| Rakuten Securities | Point integration, UX | Decent |
| Monex | US stocks specialty | Limited |
| Matsui | Day trading focused | Limited |
For 90% of salarymen, SBI or Rakuten is correct. Pick one, don’t agonize. The opportunity cost of waiting another month to “research more” is bigger than the difference between these two.
My Mistake Story
I skipped Step 2 (emergency fund). When a sudden family expense came up six months in, I sold investments at a 15% loss to cover it. That single decision wiped out a year of expected gains. The boring step I’d skipped was actually the most important.
Summary: The Order Matters
- Take-home pay clarity
- 3-month emergency fund (6 months for foreign residents)
- Honest risk tolerance assessment
- Concrete goal with number and date
- Broker decision and account opening
Investing is the easy part once steps 1–4 are done. Most failures aren’t because of bad stock picks — they’re because of bad preparation. Do the unglamorous work first.
Disclaimer: This article is for informational purposes only and is not investment advice. It does not recommend any specific financial product. Investment decisions are your sole responsibility, and you may lose your principal. Tax rules and financial regulations described here reflect the situation as of 2026 in Japan and may change. Please consult a licensed advisor or the official sources (FSA, NTA, MOF) for the latest information.
