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June 26, 1995
[SSJ: 83] RE How do Japanese save so much?
From: James Barney Marsh
Posted Date: 1995/06/26
Dear Erin,
The key to the last point may be in the following comparison. Suppose the average US family must save 10,000 for the down payment and the average Japanese family must save 20,000. On any given day, there are families with savings accounts totaling 1000, 2000, 8000, 14000, etc. In the US, these real estate oriented savings accounts would average between 1 and 9999; in Japan between 1 and 19999. So the Japanese average would be correspondingly larger.
Once the down payment is made, the wad of money stays in someone's pocket or account, at least briefly. That someone is in the first instance the seller. If the seller is a dealer, she needs in general larger ready cash holdings in Japan than in the US; if an individual, the amount may go into personal saving accounts. Either way, the dollars/yen stick together longer in both countries than currency spent in other markets, although the lumps of currency in Japan are larger.
If the world were that simple the only problem we would not have solved centuries ago would be that of boredom.
Jim Marsh
Approved by ssjmod at 12:00 AM