What’s in The FI Professor’s Portfolio?
Almost 20 years ago, when I came to Japan, I brought with me about $5,000 from selling a car—but also $20,000 in student loan debt. However, I knew I needed to make a change. I was in my late 20s and had to get my finances together.
I went to a bookstore in Osaka that carried foreign titles and picked up The Complete Idiot’s Guide to Getting Rich by Larry Waschka. This was before the FIRE movement and before the endless stream of financial content through podcasts, YouTube, and social media. But the advice from that book was simple and effective:
Save more than you earn.
Pay off high-interest debt.
Build an emergency fund.
Invest in low-cost index funds.
Eventually, expand into real estate and business.
This advice carried me through my entire investing career. I quickly learned, however, that the rules are a little different for American expats in Japan. Even with these challenges, I was able to become financially free within 15 years of moving here.
So, what’s in my portfolio today? Let’s take a deep dive.
The FI Professor’s Portfolio Breakdown
My portfolio is heavily weighted toward the U.S. (85%), with Japan making up 15%. The structure focuses on index investing for long-term market exposure, real estate for cash flow and appreciation, and a small allocation to crypto.
Overall Allocation:
Cash (5%)
Index Funds (37%)
Cryptocurrency (1%)
Personal Residence (9%)
Residential Real Estate Investments (44%)
Commercial Real Estate Investments (4%)
U.S. Portfolio (85% of total networth)
Cash (5% of U.S. Portfolio)
I hold high-yield savings accounts (HYSA) and checking accounts in the U.S. While I generally prefer to stay fully invested, I keep some cash liquidity for real estate purchases, market dips, and emergencies.
Index Funds (40% of U.S. Portfolio)
My U.S. index fund allocation follows a high-growth, diversified strategy:
20% VTI (U.S. Broad Market) – Covers the entire U.S. stock market.
30% VOO (U.S. Large Cap) – Focuses on the S&P 500.
20% VB (U.S. Small Cap) – Provides exposure to smaller, high-growth companies.
20% VXUS (International Stocks) – Diversifies into developed and emerging markets.
10% VWO (Emerging Markets) – Focuses on high-growth economies like China, India, and Brazil.
Cryptocurrency (1% of U.S. Portfolio)
Crypto is a small, high-risk, high-reward part of my portfolio:
70% Bitcoin – The most established and widely adopted cryptocurrency.
10% Ethereum – The backbone of decentralized finance (DeFi).
10% Altcoins – A mix of smaller, speculative crypto projects.
Residential Real Estate Investments (50% of U.S. Portfolio)
Real estate plays a major role in my U.S. portfolio, providing cash flow and long-term appreciation. I calculate my equity in the portfolio by subtracting the debt from the value of the properties. I own:
2 single-family homes in Caldwell, ID
6 single-family homes in Memphis, TN
1 single-family home in Fultondale, AL
1 duplex in Toney, AL
Commercial Real Estate Investments (4% of U.S. Portfolio)
I currently hold equity in a 19-duplex portfolio in Huntsville, AL. This investment will be sold in early 2025, and I will decide whether to reinvest in new syndications or allocate the proceeds elsewhere.
Japan Portfolio (15% of total networth)
Cash (15% of Japan Portfolio)
I hold Japanese yen in multiple bank accounts to cover living expenses and potential real estate purchases in Japan. Since I live here, it makes sense to keep a portion of my net worth liquid in yen.
Index Funds (30% of Japan Portfolio)
My Japanese investments include tax-advantaged accounts (DC Plan and NISA) and a taxable brokerage.
DC Plan (Retirement Account)
50% International Stocks (三井住友・ＤＣ外国株式インデックスファンドＳ)
20% Japan Stocks (三井住友・ＤＣつみたてＮＩＳＡ・日本株インデックスファンド)
10% Emerging Market Stocks (インデックスファンド海外新興国（エマージング）株式)
10% International Bonds (三井住友・ＤＣ外国債券インデックスファンドＳ)
5% Emerging Market Bonds (ＤＣダイワ新興国債券インデックスファンド)
5% Japan Bonds (三菱ＵＦＪ国内債券インデックスファンド（確定拠出年金）)
NISA (Tax-Free Investment Account)
100% eMAXIS Slim 全世界株式（オール・カントリー） – A globally diversified all-world index fund.
Taxable Brokerage (Japan)
My Japanese taxable investments mirror my U.S. allocation:
30% VOO (U.S. Large Cap)
20% VB (U.S. Small Cap)
20% VXUS (International Stocks)
10% VWO (Emerging Markets)
Personal Residence (55% of Japan Portfolio)
I own a condo in Kusatsu, Shiga, which serves as my primary residence. While I don’t consider personal real estate an investment, it still represents a portion of my overall net worth. This property has no mortgage.
Residential Real Estate Investments (TBD%)
I am currently exploring rental property opportunities in Japan, particularly single-family homes (akiya) that need minor renovations. These properties will be located just outside major population centers in Kansai and will be within 15 minutes of a train station.
Why This Portfolio Works for Me
This portfolio provides a balance between growth, cash flow, and stability:
Index funds ensure long-term market exposure and growth.
Real estate provides cash flow and appreciation.
Cash reserves offer liquidity and flexibility.
Crypto is a small but high-risk/high-reward allocation.
For me, financial independence is about options. With this portfolio, I have the flexibility to continue working, travel, invest in new opportunities, or simply enjoy life on my terms.
Final Thoughts
When I started my financial journey two decades ago, I had more debt than assets. Today, my portfolio allows me to live life on my own terms while preparing for the future. The key lessons I’ve learned along the way?
Consistency beats complexity – Automate savings and investments.
Diversification is crucial – Spread risk across asset classes and geographies.
Real estate can be a game-changer – But it requires careful planning.
Personal finance is personal – Your ideal portfolio depends on your goals.
Whether you’re just starting out or refining your own portfolio, I hope this breakdown provides some useful insights.
What does your ideal portfolio look like? Let me know in the comments!
Disclaimer
This article is for educational purposes only and does not constitute financial or legal advice. Please consult a certified financial planner or tax professional before making investment decisions, especially concerning U.S. residency requirements for bank and brokerage accounts, as this is a grey area and may have legal implications. Always conduct thorough due diligence.
