My FI target keeps evading me

So, I might have mentioned a few times now that I plan to move back to Japan with my family, and start our early retirement there, at some point.

As a result, our target budget is defined in Japanese Yen. But since my investments are, for the most part, in Dollars today, I have to do a bit of math every time I compute how far from the goal I am. I compare my target to my investments, in dollars, but this means my target keeps moving, due to the fluctuations of the USD/JPY pair. Yup, I could keep my target constant in Yen, and measure my wealth in Yen. It would probably make sense and I might switch to that at some point. But for now, I deal mostly with dollars, and it means my (yen converted to dollars) target keeps moving, fluctuating with the usd/jpy.

The USD is currently roughly at 110 Yen, down from its high of 125 in June last year. That’s a 13% drop, and my investments basically have to fight against that storm, which is very frustrating.

Now, look at how the little bastard has been evading me since Q4 2015. In green is my target based on the 4% rule (again, it changes because my target is constant in Yen, but the graph below is in dollars), and in purple is my actual wealth.

yen_target

Let me show you the 2015/2016 recent stuff a bit closer:

yen_target_2015_2016

Seriously, doesn’t it look like to you as if the Yen is intentionally trying to keep me grinding forever? It feels like every month I get closer, the target just moves a bit further away, due to the Yen becoming more expensive lately. Come on Team Japan, do something about it already :)

On the plus side though, the USD/JPY pair has done wonders for my goal over the past 5 years, almost reducing the target by 2, as you can see in the first graph. This of course brings lots of questions in my mind, such as how sustainable my target really is, if the Yen could become super expensive again over the next 2 years. Japan has almost no inflation, which tends to make the Yen more expensive with time. I’m still wondering if those two things basically balance each other.

You’ll note that sometimes my target stays flat for a while: in general it’s because for some long period of times I’ve not bothered reporting the latest USD/JPY rate in my date. You’ll notice I’ve become much more diligent about it recently, as my target closes in.

Note: this target is not my actual FI target, but marks the point where my passive income, coupled with my side gig (or what I expect it to return for the years to come) will match our expenses. This will define when I don’t really need my 9 to 5 work anymore, but would still need to hustle and ensure my side gig stays healthy.

3 Comments
  1. amber tree
    • StockBeard
  2. Mr. Tako @ Mr. Tako Escapes

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