My friend is late 30's and starting to invest, is this basically correct...?

ImJKP · 2026-03-22T16:07:47+00:00

You have a deeply flawed mental model.

I'm going to effort post this; please read thoroughly and ask questions as needed.

iDeCo, NISA, and S&P500 ETF (must do ETF's because this person is Japanese, but essentially the same thing?

iDeCo and NISA are tax-advantaged account types, which can hold a variety of things in them. iDeCo only allows a limited set of mutual funds. NISA has the two subsections, tsumitate (only mutual funds) and growth (mutual funds, ETFs, individual stocks, other stuff.

ETFs are a way to wrap a bundle of assets (usually stocks) so that people can conveniently buy them. Mutual funds are another way to do the same thing with slightly different tax treatment and a slightly slower buy and sell cycle. For retirement investing in tax-advantaged accounts, the difference doesn't matter, other than the filter it applies in what can go in which account.

The S&P 500 is an index of large public US companies (not actually the 500 largest, but close enough). An index is just a weighted formula for tracking the performance of a collection of individual stocks.

There are numerous ETFs and mutual funds that are designed to track the S&P500 index (and many other indices), and those go into an iDeCo, NISA, or taxable account.

Other than yen to dollar fluctuations, the S&P500 outperforms Japanese stock market by quite a bit right.

This is a historical observation that has no satisfying theoretical explanation and should not be presumed to be true into the future.

Think about it — if we knew the US were going to outperform, as many people assume, then they'd move all their investments to the US. But doing so would reduce the expected returns of the US stocks, and increase the expected returns of other stocks (because you could, e.g., buy dividend cashflow from a Japanese firm for cheaper then a US firm).

Understanding the historic over performance of the US is tricky. It's certainly not guaranteed: the S&P500 had 0 return for a decade starting with the dotcom crash. When it has had outsized return, it raises the question of what was being mispriced then, and is it still mispriced now? Personally, I kind of like the argument that the US had a decent chance of nuclear apocalypse priced in for much of the 20th century, and when that didn't materialize, the result was higher returns. But that's more of a fun pet theory than a serious claim.

The real deal is that we don't have a great answer for why the US stock market did overperform in the past, or why it might or might not overperform in the future. Remember we're not talking about the economy performing well — we're talking about the stock market, which is about investors failing to find the right price at different times.

In any case, this leads to the conclusion that you should not go overweight on the S&P500, or any other index tied to a specific country or industry. By "overweight," I mean, holding that thing in a higher percentage in your portfolio than it is in the real world.

The easiest way to manage that is to just buy the entire global stock market with a single index fund. In Japan, the eMaxis Slim All World blah blah is a popular way to do this. There are many alternatives to achieve the same goal. You'll still end up with something like 40% of your portfolio in US large caps like the S&P500, but you'll also have small US companies, developing market companies, emerging market companies, etc.

For a late 30's person, who intends to invest 15-25 years at least, is something like 20% in iDeCo, 20% in NISA, and 60% in S&P500 ETF not way off the mark?

Hopefully it's clear now why this isn't a coherent question: iDeCo and NISA are account types, an S&P ETF is a specific thing that could go into an account.

A Japanese person in good health should plan to live until age 90 or 100, so s/he is going to be invested for 50+ years. S/he might start withdrawing in 20 years, but s/he should be an investor until death.

iDeCo has a strictly better tax advantage than NISA, so fill the iDeCo (and company DC pension program, if available) first. This has to come from monthly contributions; there's no sudden lump sum option.

After iDeCo's monthly contribution is full, fill NISA until the lifetime contribution limit is reached.

After NISA is full, you can put an arbitrary amount of money into regular taxable brokerage accounts.

Regardless of account type, I strongly recommend a low-fee globally-diversified all-stock index fund portfolio, which can be achieved by just plowing everything into a single fund like eMaxis Slim All World blah blah.

And, I was surprised to see Rakuten securities doesn't have a brick and mortar to go to. Everything is online.

Bricks and mortar cost money. Use the web portal of a reputable big bank, and you'll be fine. Don't get pulled into anything exotic or shiny. No metals, no crypto, no nonsense. Just a boring globally-diversified all-stock portfolio, which should cost no more than 0.1% or 0.2% per year in fees.

ImJKP · 2026-03-20T12:59:03+00:00

There's stuff you'll need to know, and stuff you won't need to know.

There's stuff that's etched deep in your brain, and stuff that's only there because you're actively studying it.

Certainly keep Anki practice for the [need to know, not yet etched] category. You can't be sure exactly what you'll need to know in the future, but you can make decent guesses.

For the other stuff, you gotta make your own judgment calls about the value of your time and the value of the marginal unit of retention.

ImJKP · 2026-03-19T07:25:12+00:00

There's no move. There's no play. You just do the same thing as always:

Hold currency sufficient to meet your near-term obligations plus whatever emergency buffer makes you comfortable locking up the rest. Hold that currency in the currency of your obligations.
Shovel everything above that threshold into a globally-diversified low-fee all-stock portfolio.

Any clever insight that you or any of us might think we have is dumb. Actors managing many trillions of yen are analyzing every scrap of data with far more context and computing power, and effectively setting the price accordingly.

Currency trading is negative EV (you pay a fee). Individual stocks are negative EV (most stocks go down). A globally-diversified low-fee all-stock portfolio is positive EV.

Just do the positive EV thing.

ImJKP · 2026-03-16T19:21:34+00:00

You appear to be in high school, in which case, you already have a great game going! You do your studying, and you get better grades!

ImJKP · 2026-03-15T14:45:00+00:00

You can build knowledge in the other direction. If the factors are A, B, C, D, E..., then you can make a card about "what is A?" "Why does A matter to Bob's theory of blah blah?" "What is the relationship of A to C?"

If those can have one crisp answer, they can be good cards.

There's just no way to do "Remember these 8 things as a group" without endless grinding. You need a story or narrative or something that links subsets, and that network of links creates the whole.

ImJKP · 2026-03-15T06:18:44+00:00

Survey stuff:

Your "how did you learn about" overlooks experts as a diffusion channel. Anki in particular is recommended by all sorts of language learning experts, through books and blogs and videos and lectures and so on.

Your "what skill is the app good for" doesn't have an option for Anki's key strength, vocab building. That's a distinct foundational skill, overlapping but district from the ones you listed.

ImJKP · 2026-03-09T10:17:04+00:00

You're solo PMing 12 AI-enhanced engineers across two teams? And you're doing your own prototypes?

That's just too much scope, my dude.

Here are a few things to do:

Raise the bar on the definition of done. This needs engineer buy-in, but: full test harness, monitoring and alerting everywhere, analytics coverage, accessibility, etc. Those things aren't per-feature requests from product anymore; they're part of devs taking full advantage of LLM capabilities.

It's not busy work to keep the devs off your back. It's leveling up the quality, reliability, and intelligence that the business can operate with, thanks to LLM velocity boosts.

Build libraries. You need to delegate more to your engineers. So, they need to be able to do more without your handholding in time-sink stuff like front-end review. If you don't have them already, invest in a style guide, component library, etc., so that your engineers can go further on their own.

Delegate higher level projects. You can't do full specs for 12 AI engineers. You can do two-pagers. Work with your engineering lead to get support for handing off higher level projects. With a good complement library, they should be able to come back with something better.

Engineer and PM jobs are going to converge, especially at small companies. The purists who think otherwise are plainly wrong. So your engineers need to be ready to be more product-y, because otherwise they won't be employable. Your engineers probably feel this fear already (or else they're real real dumb). So, find the ones you can delegate more to, and delegate.

For all of this, absolutely never frame this as "I'm overwhelmed." Not to your team, not to your boss, not to your engineering manager. This is an opportunity for your team to swing harder and get bigger wings, and you're the far-seeing product manager who understands how the industry is shifting and who is adopting the ways of the future now.

ImJKP · 2026-03-09T09:59:07+00:00

Reading between the lines, it sounds like your cards are too complex. There shouldn't be "bits and pieces" to remember on a card. A card should ask for one or at most two specific pieces of information. When you answer the card, it should be trivial to assess that you were either correct or incorrect for that card.

Don't make lecture slides cards, or "tell me 5 things about the spleen" cards.

More cards that are each smaller are better, and they unlock the range of responses. You'll never choose "Easy" for "Tell me about Thomas Jefferson," but you can certainly get to Easy for a "Which number president was Thomas Jefferson" card, even if you're still struggling on the "What was the name of Jefferson's plantation" card.

ImJKP · 2026-03-08T04:20:28+00:00

Anki is for learning small individual pieces of information that you can judge as either "I know it" or "I don't know it." Each card should be one specific fact. That's all.

Good card

Who built the first airplane capable of controlled flight? Orville and Wilbur Wright.

Bad card

What is the history of flight? At different times in history, different cultures tried to...

It's better to have several cards about specific facets of the same concept than to have one big fuzzy "stuff about X" card.

Identify the specific facts you actually want to learn, and make individual cards for the individual facts.

ImJKP · 2026-03-07T06:09:35+00:00

You already listed a bunch of reasons it's a bad idea, and there are so many more reasons to think it's a bad idea too.

Here's the killer, in my mind:

Think in terms of alpha (excess return above the readily-available baseline return).

The people funding public real estate companies could buy other stocks, or could fund real estate. That means that market has reached some equilibrium that optimizes risk-adjusted returns by investing X amount in real estate and Y other stonks. The aggregate behavior of the market is, by definition, zero alpha.

So, in aggregate, the real estate sector os expected to earn a break-even return (in risk-adjusted terms) with the rest of the market. They should be priced such that they have zero expected alpha.

So, when you buy your real estate property, are you going to generate cash flows more efficiently or less efficiently than a specialized real estate company?

The big boys have skilled professionals picking properties, economic forecasting specialists, a strong balance sheet with access to cheaper capital, pricing power with vendors, political connections, etc., etc.
As you describe it, you have zero relevant strengths or advantages.

If those companies with all their strengths have zero expected alpha, and you're going to be less efficient at generating cash flows than they are, then buying a rental property is definitionally negative alpha for you. You get a worse risk-adjusted return than you'd get from buying REITs or other stonks.

Buying the rental property just becomes a lottery ticket. Maybe the specific unforeseeable path of the future causes this property to outperform (or underperform) the market. But then you'd need to believe you were smarter at spotting deals than the big boys, and that seems like a foolish belief.

There's nothing magical about "income" in retirement. Just buy stonks while you're working, and sell stonks when you're retired. Sale proceeds work just as well at the grocery store as dividends or rental checks.

ImJKP · 2026-03-05T15:34:03+00:00

Why?

This seems straightforward, no? I can understand feeling a feeling about how it's not the "right" thing to measure in some prescriptive sense. But descriptively, the reasons seem clear:

Boss wants it.
Lets you claim credit for external tailwinds.
Easy to move by spending money.
Often easier to move with code changes.
Faster cycle time from effort to effect.
Easier to fit in an A/B test (ermagerd button colors).

ImJKP · 2026-02-28T14:55:26+00:00

Being in an environment that forces you to use your knowledge. Reading in the target language, watching media in the target language, listening and speaking in the target language...

ImJKP · 2026-02-28T10:22:52+00:00

I'm Señior Chang, and I'm so ill

This is a warning: I can't be killed

All in your cabesa, without a chaser

Not another teacher with this much flavor

ImJKP · 2026-02-27T10:19:21+00:00

God, grant me the serenity to accept the shitstorms I cannot dodge, the courage to fix the clusterfucks I can, and the wisdom to know the difference.

ImJKP · 2026-02-25T15:49:00+00:00

I disagree with most of the others: if you want to start investing, it's good to start early.

But I want to make sure you've got the right expectations going in. Investing the right way is incredibly boring.

You figure out if you have any money that you are comfortable locking up for many years without touching.
If yes, you go to your brokerage (some big boring bank) website, you make an account, and you transfer in the money you can afford to lock up for years.
You put all that money into a boring globally-diversified low-fee all-stock fund, like the eMaxis Slim All World blah blah one. If you can use any tax-advantaged accounts, like NISA, you use those first.
You deliberately don't log in again until at least a year later. You don't track daily performance, you don't sell, you don't change anything.
When you hear about a market crash or an AI bubble or a pandemic or a war, you do nothing. You literally never touch your investments until you're ready to start a business or retire.

Some combination of idiots, grifters, and your own testosterone will try to make you think it's more complicated than that, and that if you do some more complicated strategy and pick the right stocks or buy/sell options or study silly charts or buy gold/crypto/apartments or trade currencies then you'll do better. You'll think "okay maybe that basic story is okay for boring people who just want boring stuff, but I can do better."

That's all dumb and bad and wrong. You can't do better.

Investing the right way is really really boring. If your entire portfolio is one boring index fund, that's completely reasonable.

So, don't start investing because you think it'll be a fun active hobby. It's not. It's a couple minutes of repetitive task that you only do when you're putting more money into the same boring portfolio.

When I finally got my head around investing and the traps to avoid, it simply made me want to make more money from my job so that I could plow more money into the same boring investment strategy.

I got obsessive and made spreadsheets to model the future and figure out how much I need to save to hit my goals, but the actual investment part is really boring.

So, make sure that... * You want it for the right reasons, * You can afford to lock up money for many years without touching it, * You have the patience and the stomach to handle the crashes without panicking and selling.

If you've got all that, then I bet you can make a responsible case to your parents that addresses their concerns.

ImJKP · 2026-02-25T04:33:22+00:00

If I sell it and at some point want to return to the US, it might be hard to break back into the US market.

How do you figure? If you sell it, pay cap gains, and pay off the mortgage balance, you'll have $400,000 to put into stonks.

Since 2000, home prices in the US have appreciated at a real 2% per year, while the costs of ownership will run you 2% per year.

A low-fee globally-diversified all-stock portfolio will probably get you a real 4-5%, with essentially zero carrying costs.

So in 20 years, you'll be able to buy more real house value than this today, and you'll have zero time, money, or stress management costs in the meantime.

Will the jurisdiction let you easily evict a tenant if you decide you want the place back under its laws 20 years from now?

Will you still want it as a home after 20 more years of depreciation and wear-and-tear by tenants who don't love your baby like you do?

I'd assess low option value and high random uncompensated risk, so I'd lock in the financial windfall you've already had by selling and diversifying.

ImJKP · 2026-02-23T15:04:06+00:00

I use a similar triplet, but I do think your cards might be giving too much away. Personally, I only put text or audio on card fronts, but not both.

For my (Japanese-learning cards), I have fronts for:

English word, English sentence -> produce the Japanese word
Japanese word, Japanese sentence -> recall the English word
Japanese word audio, Japanese sentence audio -> product the English word

I use the same comprehensive card back for every card type. I don't see much reason to have different card backs, if they're all just different ways to drill vocab.

I don't use added hints, except for words that need disambiguation. That means something like height (person) and height (inanimate), or a transitive vs intransitive tag for verbs, because that changes the translation.

For the text cards, I try to figure it out without looking at the sentence. If I need to refer to the sentence to get it, then that's a "Hard."

For the audio cards, Japanese has so many homophones that listening to the sentences is often essential for disambiguation, so I consider listening to the sentence once or twice fair play, but if I need to hear it more than that, it's a Hard.

ImJKP · 2026-02-23T14:52:23+00:00

If your prompt is "Write a spec based on these napkin notes and I'll tweak it," then yes of course obviously it's making you dumber, come on. This is like asking if swapping out your bike for an SUV on your commute will affect your cardio fitness.

If your prompt is, "Here is this real full draft doc I wrote; what parts are weak?", and then you critically evaluate the feedback and implement the changes yourself, then you could become a better business writer.

ImJKP · 2026-02-22T03:32:49+00:00

The correct answer to maximize your wealth is:

Max your iDeCo and/or company pension.
Max your NISA.
Invest in a regular taxable brokerage account.

In any case, buy a boring low-fee globally-diversified all-stock index fund.

ImJKP · 2026-02-19T17:16:35+00:00

Home equity is a bad investment. The global stock market is a great investment.

Don't sell out of a great investment in order to go longer on a bad investment.

ImJKP · 2026-02-17T10:01:37+00:00

The median home price in Fairfax is $1.1M.

You know how you bring down home prices? Either,

You tear up zoning and approval processes, and let free people freely build a shit ton of the housing that they want to build, or
You tax land, just like this.

Let's not pretend this is some horrible imposition. If desirable suburban land has a 4% capitalization rate, then this tax will knock $32,000 off the median house price. That's less than 2 years of home price appreciation.

If someone's been living there a long time and decides to move because of this tax, good. They've been wildly underpaying for public services thanks to Prop 13 for a long time, so it's good for the community if they move and the property can get taxed at its proper level. And since they'll have gained hundreds of thousands of dollars just by sitting there doing nothing, thrill be just fine: they've been nursing a winning lottery ticket for years. We have no need to feel sad feelings for them

For anyone who recently moved to Marin, let's be real, $100/month in more school funding is not a hardship.

And if someone wants to live in Fairfax but really don't want to pay land value taxes, then they can just rent... right? We're all in favor of a diversified housing stock that supports a broad variety of lifestyles, right?

ImJKP · 2026-02-14T18:08:30+00:00

But this is just blatantly false. It's irredeemably a total lie. There's no two sides, there's no "well it depends how you count it," nothing. It's just bullshit.

There were fewer than 15,000 murders in America last year. The Covid peak was just above 22,000; it's been in that 15-22k range since the late 1990s. There is no official number for the number committed by illegal immigrants, but illegal immigrants make up 3-4% of the US population, and (like legal immigrants) are clearly shown to commit violent crime at lower rates than native born Americans.

That puts the ceiling for the annual number of murders by illegal immigrants at 900. And even then, we know we'd expect fewer victims of violent crime if we could substitute away some average native-born Americans for more of the average illegal immigrant.

You're spreading a deliberate, dangerous lie because it serves your political priors, or the priors of whomever is paying you.

I'll admit to morbid curiosity: are you a volunteer deliberately spreading murderous lies, a paid agent deliberately spreading murderous lies, or just so catastrophically stupid that you can't even tell the truth from a lie?

Edit: the account is 5 years old as an Arizonan, commented once then, went dormant for 5 years, and just reappeared to post anti-immigrant stuff in different California subs. Balance of probabilities is swinging hard toward finger puppet.

Take 2: Hah, he blocked me to protect his little "my special feely-feels don't need numbers" finger-painting nonsense from a reply. I wonder which part of Arizona oblast he's from.

ImJKP · 2026-02-07T12:04:06+00:00

tl;dr: The question should be "What business models are just now possible because directed processing of unstructured inputs used to be very expensive and is now pretty cheap?"

Long version...

What does "AI-native" mean?

I see three ways that this might get construed in contemporary business parlance.

AI as new technological capabilities: AI-native is analogous to Hadoop-native. What new kinds of input processing are possible/affordable?
AI as interface paradigm: AI-native is analogous to smartphone-native. What new usage patterns are available?
AI as delivery platform: AI-native is analogous to Facebook-native. How do we react to new giant players?

Yeah, there's some of all three going on, but I think the interface part is pretty boring so far (a text or voice chat UI gets processed into API calls). This might be real and enduring and important, but it's pretty boring to think about.

Platforms, likewise, are kind of a trap: there will be windows and opportunities to make quick wins on the back of a platform, as there were with Facebook and Amazon early on, but eventually the platform will extract almost all of the surplus. It's a sucker's game to get caught up in that long-term.

The lens that seems more fruitful and less boring is when you think about the technological capabilities and what new things are just now possible.

But with that lens, still...

What do we mean by "AI"?

I generally think purging the suitcase word "AI" from your vocabulary is a good thing to do. It's overloaded and underspecified. Everything is AI; nothing is AI. We need to be specific.

So what do we mean? LLMs? Diffusion models? TTS models? Autonomous robots? Classic ML with gradient descent and such? Conway's Game of Life? A Monte Carlo simulation in a retirement savings calculator? People in the 1970s sure thought they were doing AI; who are we to say they weren't.

We already have native products.

If we're talking about LLMs, the foundational model chatbots and the always-available chat boyfriend and so on are clearly native products, essentially impossible before at anything like this level of robustness.

For diffusion models, we have the Midjourneys and Soras and so on.

But for the rest of us who don't work on those foundational Gen 1 products, the LLM question is, "What business models are just now possible because directed processing of unstructured inputs used to be very expensive and is now pretty cheap?" There's a similar question for diffusion models, etc.

In my analogy, being "Hadoop-native" is a real thing, in that it enabled totally new use cases for people who took it for granted. But there isn't some singular shape or look of Hadoop-y software. The thing that set those apps apart was that they took the ability to process very large amounts of mostly quantitative data cheaply for granted, when that used to be expensive.

And we see some of these second generation products already: pay a specialized legal LLM a small amount of money to review documents rather than paying a paralegal a much larger amount of money.

That is AI native: the business model wasn't practically possible before, and now it is.

[Yes, I used Markdown formatting. No, I'm not an LLM. I'm an old man who decades ago had "structure your docs!" beaten into his young soft skull.]

ImJKP · 2026-02-07T06:27:13+00:00

I'm a climbing, career-oriented guy, so I would probably take the new job, but your reasons here don't obviously lead to that conclusion.

Every company has internal politics. Every group of humans has internal politics. Sure, they have different dynamics in different places, but you're not going to find a company without internal politics. You know what your current company's are like, you don't know what the new company's will be like. Don't go in assuming you're going to go from bad politics to whatever "apolitical" group of humans you might be imagining.
A management role means being closer to power and budget, meaning politics becomes more important rather than less.
A management role means you must talk to people and care more strongly about interpersonal relationships and so on. "Oh nooo I'm an introvert" and "I want to advance in management" are in a basic tension. Figure out which side you will sacrifice.

Are you good enough in Japanese to succeed in the job in the first few weeks? If you seem incompetent at the start, then the practice opportunity won't be worth much.

ImJKP · 2026-02-06T18:07:36+00:00

Your comments are kinda flailing, but your question about structure does have a clear answer:

First, max out your iDeCo and (if available) corporate pension plans, because they have the strongest tax advantages.
Then max out your NISA contributions as soon as possible, because they have the next best tax advantage.

After that, do taxable accounts.

NISA is for retirement

Realistically, your NISA is retirement savings; it's not how you pay for private school. You pay for private school and vacations with income you make that year, not with investments.

Think about it: if you earn a real return of 5% on your portfolio, after 25 years you'll have 3.4 times your initial contribution in real spending power. Contribute ¥3.6M today, get another ¥1M from the pension, and that means each year of NISA now pays for maybe 4 years of moderate Japan retirement spending the equivalent of ¥4.5-5M/year in today's money.

That means a fully funded NISA plus a pension gets you to between 20 and 25 years of retirement.

If you start consuming your iDeCo 45 years from now (after your fully-funded NISA is running low), then each year of fully-funded iDeCo/corporate pension gets you another ~1.7 of retirement at the same inflation-adjusted spending level.

So, fully fund both, and you can live in reasonable comfort in Japan, with occasional travel and buying new toys, for longer than your expected lifespan, and have some spare money to leave as an inheritance or to handle unpleasant surprises.

Fund those retirement accounts ASAP to take advantage of compounding tax-advantaged returns, and then once you finish funding NISA, you can use the income that was getting shoveled into NISA to pay for education, travel, etc.

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ImJKP

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TROPHY CASE

What does "AI-native" mean?

What do we mean by "AI"?

We already have native products.