The Strategic Eikaiwa Owner: Your Financial Advantage
The Strategic Eikaiwa Owner: Your Financial Advantage
Issue No. 1 By Mr. Investible
Introduction
Welcome, Eikaiwa owners and friends! I'm Mr. Investible, and I’m honored to be your financial strategist for navigating Japan’s unique business landscape. Operating a school here presents a distinct set of complexities, from deciphering intricate regulatory documents to adapting to culturally specific business practices, and then there’s the language barrier!
While many of us are fortunate to have Japanese spouses whose local insights are crucial to our operations, others may feel they are navigating these waters alone. Regardless of your setup, a critical question remains: Are we truly optimizing every available financial opportunity to ensure our money is working as hard as we are? "The Strategic Eikaiwa Owner" is designed as a collaborative platform for exchanging innovative ideas on corporate finance and personal wealth management within Japan. We will focus on actionable strategies that work in the current economy, alongside long-term planning for the legacy you wish to establish for your family.
Optimizing Operational Expenses: An Essential First Step!
For many, financial topics can appear daunting, even impenetrable. Many of us just started out as teachers, not businesspeople, and we all continue to learn the ropes every day. To ensure a practical start, let’s begin with a simple, highly effective concept: optimizing your everyday operational expenses to significantly enhance your financial position and quality of life.
Leveraging Your Spending: The Power of Credit Card Rewards!
Many people I speak to are scared of debt, I even know quite a few people who don’t have a credit card! When managed strategically, debt can be leveraged to significantly improve your financial wellbeing without spending an extra yen. Consider this: What if you could receive two complimentary return domestic flights within Japan every three to four months, simply by restructuring your existing spending habits? Think about the various monthly outgoings a typical language school incurs:
• Utility Services & Connectivity: Electricity, water, gas, internet, and school telephone fees.
• Tax Obligations: Consumption tax, land taxes, and corporate tax. Did you know you can even pay withheld income tax via credit card to accrue miles? Note: The National Tax Agency charges a settlement fee (approx. 0.83%) for card payments; ensure your rewards rate outweighs this cost because if it does, you’re winning!
• Recruitment & Training: Fees for job boards (GaijinPot/JobsInJapan), agency commissions, and staff development workshops.
• Digital Subscriptions: Zoom licenses, CRM software, scheduling, and accounting tools.
• Marketing: Website hosting, Google Ads, social media, and local flyers.
• Vehicle & Facility Costs: Road tax, fuel, the mandatory shaken (inspection), and routine repairs or maintenance to the school building.
• Staff Relations & Welfare: Commuting reimbursements, "Employee Welfare" perks (like the staff coffee/snack station), and seasonal staff events (bonenkai).
• Insurance & Materials: School property insurance, fire & contents insurance, juku hoken (liability), and educational materials or proprietary textbooks.
• School Rent: This is trickier, but you may be able to pay rent by using your card to "top-up" a charge card like Revolut or Wise. Caution: This is a niche strategy. Research your card's terms, as many Japanese issuers exclude digital wallet top-ups from earning points.
How do you currently pay your school’s monthly expenses? Cash? Bank transfer? Credit Card? If you’re not using a credit card, consider this… Almost all expenses you currently settle via cash or bank transfer can be channeled through a carefully selected business credit card. This not only strengthens your credit history with Japanese financial institutions (think future loans!), but also enables you to consistently accumulate rewards from every yen spent. If you gotta pay them, you may as well earn from these expenses right!? Work smarter, not harder!.
Richard’s Real-World Example: 2bRich Eikaiwa
Some of you may already be familiar with Rich; he and his wife have a one-location school with 250 students; they hire one other FT Teacher and turn over a yearly revenue of approximately 30 million yen. Keeping labor costs & commercial-space costs to the side, let’s take a look at their approximate “card-able” expenses every month:
• Utility Services: ¥30,000/month • Connectivity (internet & telephone): ¥10,000/month
• Tax Obligations: ¥3,000,000/year (or ¥250,000 per month). Possibly more if paying staff’s tax-withheld.
• Digital Subscriptions & Software: ¥25,000/month (e.g., Zoom, educational apps, CRM, accounting software)
• Marketing & Advertising: ¥50,000/month (e.g., website hosting, local ads, flyers)
• Vehicle-Related Costs: ¥25,000/month (road tax, insurance, gasoline)
• Insurance Premiums: ¥10,000/month
• Home Office Allocation: ¥50,000 (50% of home utilities, Netflix subscriptions, etc.)
• Telephones: Your spouse's and your own keitai (used for business purposes, of course…): ¥20,000/month
• Educational Material Procurement: ¥210,000/month (approximated from ¥10,000 per student per year x 250 students)
• Staff Benefits & Allowances: ¥25,000/month
• Business Transportation: ¥20,000/month
• Professional Meals: ¥70,000/month
• Professional Development and Travel: ¥720,000/year (¥60,000 average per month)
• Maintenance & Cleaning: ¥25,000/month
• Banking Fees: ¥5,000/month
• Office Supplies: 15,000/month
Approximate total monthly expenses: ¥900,000
* Tweak these numbers by replacing with your own
Now, these expenses must be paid, regardless of whether you use cash, bank transfer, debit, or credit. They're not optional expenses; Richard will pay them. So, he may as well channel it all through a credit card and reap the rewards, right?
Okay, So What Card Should I Use? Let's look at Saison Bank’s AMEX Platinum Business Card, which, in my opinion, is an excellent card for accruing miles easily. This card, paired with JAL Mileage, could see you and your family enjoy significant domestic travel opportunities all year round.
The Saison Amex Business Platinum credit card allows you to accrue JAL miles at a rate equivalent to 1.125% mileage yield on your spending. This is broken down as follows:
• 10 JAL miles for every ¥1,000 spent (automatic conversion via SAISON MILE CLUB). This provides a 1% direct mileage yield.
• An additional 1 permanent "Eikyu-Fumetsu Point" for every ¥2,000 spent. These points can then be converted to JAL miles at a rate of 200 permanent points to 500 JAL miles.
This adds an extra 0.125% mileage yield (1 point per ¥2,000, and 1 point = 2.5 JAL miles, so 2.5 JAL miles per ¥2,000, which is 0.125%).
Let’s see the results if Richard channeled his 90 万円/month expenses through a Saison AMEX
Business Platinum card:
If Richard spends ¥900,000 on his Saison Amex Business Platinum card every month, he would accrue approximately 121,500 JAL miles within one year. Considering the majority of domestic flights in Japan are between 4,500~8,500 miles per one-way leg per person (all year round, regardless of season and travel dates!), that would allow Rich, his wife and daughter (family of 3) to take approximately 6 domestic flights (3 return trips) a year without taking out his wallet. Now replace Rich’s numbers with your own… How many flights would you get a year? Anything more than 1 is a big win! Okay, so hotel expenses remain… but by placing those on the credit card too, you’re simply continuing the cycle and accumulating even more miles!
I often hear the sentiment, "I don't want to pay the yearly charge for a credit card, it’s a waste of money!" But consider this: how much would you realistically spend booking 15~20 domestic flights directly with an airline each year? Do the math! The value of the rewards often far outweighs the annual fee. So…why not have your bills pay for your family’s next holiday!?
See you next edition for more of The Strategic Eikaiwa Owner.
Keep learning & keep earning!
Mr. Investible
*JAL has introduced a small booking fee (approx. ¥440 per segment) which cannot be paid using miles, BUT paying this on your card continues that virtuous mile cycle!
Disclaimer: Any advice given is solely the opinion and personal experience of Mr. Investible and should not be considered professional financial or legal counsel. Readers are strongly advised to seek independent professional and legal counsel before taking any financial action.
