How Rich is Japan?

How Rich is Japan?

How Rich is Japan?

Japan is clearly one of the most industrious nations in the world and is home to among the most advanced cars, power tools, chemical substances, processed foods, electronics, among other products.  In terms of purchasing power parity, Japan ranks fourth largest nation, behind world leader the United States, China and India. Japan is rich in the agricultural business and is responsible for nearly 1/6 of the fish caught across the globe. The nation employs nearly 66 million people with the unemployment rate is a relatively low four percent, yet 20 million people we below the poverty level back in 2007.

Back in the middle of the first decade in the 2000’s, Japan’s exports amounted to an impressive $4,210 in US currency. As of a few years ago, their main exports were to the United States, China, South Korea, Hong Kong, and Thailand in products such as transportation equipment, cars, iron, and auto parts.

Another indication of a booming economy, numerous of Japan’s companies such as Toyota, Honda, Canon, Nissan, Panasonic, Mitsubishi, Nintendo, Lexus, among others are global leaders in their industries. Thirty percent of the top ten largest cooperatives in the world are in Japan with the agricultural and consumer ranked number one.

But is Japan considered rich?? It depends on the definition of such. There is an increasingly wide gap between the wealthy and not wealthy. For example, in some countries, the richest separate themselves from others in distinct communities with top security measures.  In Japan, a rich person often lives in the same community and even next door to a middle or even lower economic class person, making it difficult to distinguish.

Still, the indication by the booming stock market over recent years has led local media to talk about the super-rich. Over one million Japanese or just around a percent of the population is defined as rich, which is income near $275,000 US and assets of around $1 million. Other ways to determine the most wealthy are those that can simply live off the interest and never have to touch their principal or salary.

The rich in Japan will spend money on things they enjoy such as travel and the arts but rarely flaunt their wealth on mansions and expensive cars. The art they do purchase is of Japanese origin, mostly feeling the need to put money back into the Japanese economy. The Japanese that earn less than people in other countries end up having more wealth in the long run due to wise investment choices, particularly overseas assets that are taxed once they reach around $450,000 US.

Another reason Japan is rich compared to others is that even those that inherit wealth still work their whole lives instead of many in the Western world that retire. Young people that inherit money maintain their wealth because they use it for education and other means to enhance opportunities to earn their own money, instead of living off the inheritance.

One thing in Japan like much of the rest of the world is that the middle class just slides by in daily living, while the rich maintain the wealth. Those that inherit money learn great investment strategies. Case in point, nearly three times as children of wealth have investment experience compared to those that are not wealthy.

Japan also has a significant population of married couples in which both work and have a combined income of nearly 10 million yen of $90,000 US. These people in Japan also have professionals advising them on how to manage their money.  The wealthy couples also tend to spend their money liberally but only on things such as housekeeping or daycare.

Another sector of Japan that is rich is the “digital seniors”, which are those that are computer intelligent and spend time online. They are smart individuals who know about the financial markets and educate themselves on the internet. The interesting thing about this group, which is in the range of nearly 10 million, is that they don’t buy and sell online. They do it the old fashioned way to the tune of 26 million yen or over $230,000 US.

All told, Japan ranked third in the world in GDP (Gross Domestic Product) in 2019, surpassing the $5 trillion US mark. This is very impressive due to the fact the economy was hit hard in 2008 with a recession. When recovery was taking place, an earthquake hit, hurting the economy. But the good news it the nation is clearly back on track and with the 2020 Olympics being held in Japan, the country should get a big boost that will keep investments coming at a steady, high rate.  Japan should maintain its position behind the United States and China in terms of GDP.

The simple answer at the end of this long discussion is, “yes, Japan is still a rich nation” and one of the most prosperous in Asia and the world.


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