one advice, if you want to take out mortgage to buy a property, you should do it before you quit your job. You probably won’t be able to take out loan for a few years and the loan amount will also be lower.
Wouldn't with FIRE preparations make more sense to have a long loan and keep the money invested? e.g. 50M JPY would "make" an extra ¥2-2.5M/year according to FIRE numbers (4-5%), while on a loan (35Y, 1%) you'd need to pay ¥1.7M/year, netting ¥0.3-0.8M/year on profit.
Just curious why you decided to pay off a (presumably) low-interest loan instead of investing and paying it off the gains.
You're absolutely right! The main reason is psychological. I abhor debt and I abhor drawdown in investments. So my investments are more conservative and suffer less in a downturn, and I've effectively assumed they provide 3% a year (even though back testing says 5%).
Heck, since the land around here has appreciated around 20% since I bought the house in theory I should just sell it and invest, and rent something or buy a cheaper house with a mortgage. But psychologically I'm having a hard time doing so.
Same here, I abhor debt. It's not a mathematical principle, it's personal. The peace of mind is priceless.
If you otherwise have no debt, then really the only worry is lifestyle. I'll assume your property tax is also low, unless your property is YUUUGE. Therefore, even with an economic downturn (including YT income), it should be easy for you to adjust.
As others have mentioned, multiple income streams is key, and sounds like you have that too. Just keep consistently putting excess cash in your investments and you should be good.
My health insurance tripled when I left the company to go freelance. YouTube seems extremely risky w/r/t the algorithm and demonetization and I definitely wouldn't place my trust in it long-term. If your day job has long-term career prospects, please reconsider leaving it until you have multiple income streams.
I work with YouTubers, and several that I know have seen their YouTube revenue drop quite a bit in the last year or two even as views and subscribers have continued to grow.
I tend to play it more conservatively, but I would consider leaving my job in the second year YT income surpassed my full time job, and only after saving an emergency fund of about 12 months of expenses.
Very interesting, thanks for the input! For me my subscriber count is very small, but income has been increasing steadily... This is the second year Youtube could basically easily cover all of my expenses.
I've also worked extremely hard on FIRE, so I do have invested funds to sustain me for around 20 years if need be (although obviously I'd prefer to keep them generating income and not dip into them).
But, yes, I may need to play it safe and stay employed for now... thanks!!
One of my friends is famous YouTuber in my home country (top 10), and he's still not dare to quit his job because it's not easy to control what YouTube is doing)
It sounds like you’ve just about checked the boxes I brought up, which is very good.
If you don’t feel like you’re burning the candle at both ends, then it might make sense to keep working. If you think you can grow your channel even more with the extra time, then you have a good reason to do YT full time.
As part of your calculations, give yourself a little stress test: If your YT income dropped to a half or a quarter, would you be okay until you could build it back up? With your investments and focus on FIRE it sounds like you’ll be fine.
Good luck!
Around 50k subscribers. I'm projecting from my Q1 income (and just extrapolating linearly, although based on previous years Q1 is the weakest of the quarters for me).
Oh wow man that’s great. If I can just ask one more follow up question is that revenue all from just YT views ? Or are you adding other things?
I have an idea for a channel but honestly I thought to make even like 10M yen you’d have to have like 1 million subs or something….
Thanks for the input! And wow, 3x is crazy... I thought it would be 2x for the first year, and then the following year it should be cheaper since based on previous year income...
Only around 20% of the income is YouTube, the other is Patreon, Affiliate Links, and Sponsorships. But yes, overall linked to # of views. Fortunately the channel is very safe in terms of niche wrt to demonetization risk.
I do have interest and dividend income (basically using permanent portfolio on a semi-FIRE nest egg) to supplement the YouTube income (although I try not to touch it since I like compound interest).
But yes you're giving me food for thought.
> Fortunately the channel is very safe in terms of niche wrt to demonetization risk.
It sounds like you've made some very good decisions for yourself (I'm very jealous) but I would never, ever, ever EVER trust any YouTube channel as being safe. Please talk to some sempai youtubers, particularly ones who have faced copyright strikes, demonetization, and/or have lost followers due to changes in their physical status, looks, health, etc.
Understood, thank you for being the Voice of Reason! If it doesn't work out I can still try for jobs, presenting my break as a sabbatical... but yes I do see the risk. mmmh. Food for thought indeed.
Thanks so much for this! And yeah my content is nerdy and sciency so I don't expect it to be controversial. So this is great information to know!
A large part of my income comes from affiliate links, so I know exactly what you mean. Building a product for my niche and then selling it has been on my mind, although most of my audience is in the US so it's not that simple either :-)
Congrats on being full time with you channel by the way! It's amazing for sure!
Thank you!! I actually already have merch from Spreadshop, but it's a bit of an afterthought and I don't market it much. Maybe I should, but it's hard to have everything I want to advertize (Patreon, affiliate links, etc.),,,,
By the way if you are who I think you are (There's a channel I watch sometimes that just sprang to mind from your messages), there is a possibility of collab, although it likely wouldn't be very rewarding for either of us (my niche and that channel's niche having very little of an intersection in terms of audience), but fun. Would it be OK to message you?
For most jobs you can be a voluntarily and continuously insured person at the same rate for two years after quitting. That's likely long enough to either incorporate, get big enough that a higher health insurance cost isn't an issue, or quit and go back to conventional employment.
I did something similar, but I was able to continue my employer’s plan for the first two years. When the kokumin kenko hoken kicked in my rate jumped to a little more than triple (with the caveat that my son was moved to my insurance that year).
Anecdotal, but I’d say 2-3x is not out of the question.
Ok.
Yes, you can voluntarily continue shakai hoken for up to two years.
I think in your case it sounds like at least one (if not more?) dependants also switched to kokumin hoken, which can indeed make it more expensive.
Thanks for the clarification!
Yes, though unless you are in a particularly expensive municipality, it would be quite rare to see anything near a doubling. 1.5x is certainly within the range of possibility though.
Dont employers pay half of the medical insurance premiums? I'd expect when going self employed youd get a minimum of double the cost since you have to pay for the whole thing right?
While employers do bear half the cost, shakai hoken premiums are usually higher and the system offers better coverage. Generally switching to kokuho will generally not see anything close to double. Though of course depends somewhat on location and income.
> When the kokumin kenko hoken kicked in my rate jumped to a little more than triple
If you're moving from voluntary continuation of employees' health insurance to NHI, most of the increased premium is not due to NHI being more expensive. The increase is mostly due to the very low premium cap that is applied to people who are voluntarily continuing employees' health insurance. (Basically, voluntary continuation premiums are calculated on the assumption that the former employee is not earning any more than 3.6 million yen per year.)
Without the premium cap for voluntarily continuing employees, NHI and employees' health insurance are relatively competitive. NHI will *often* be a bit more expensive, and it can be quite a bit more expensive if you have a lot of dependents, but the difference is not enormous (nothing like 2-3 times).
And note that the low premium cap doesn't apply to people who are enrolled in employees' health insurance *via their employer*. It only applies to people who are voluntarily continuing to be enrolled in employees' health insurance once they are no longer employed.
So in terms of comparing NHI to regular employees' health insurance, talk of NHI being 2-3 times more expensive is absurd. The difference is never that large. However, if your income is relatively high and you are using the very low premium cap applicable to people who are voluntarily continuing employees' health insurance, then it is possible for your premiums to increase by 2-3 times as a result of losing voluntary continuation.
Though I think it's misleading to suggest that this is because NHI premiums can be 2-3 times higher than employees' health insurance premiums, because the voluntary continuation premiums are being calculated on the assumption that your income is a maximum of 3.6 million yen per year, while your NHI premiums are being calculated on the basis of your actual income. If both premiums were calculated on the basis of your actual income (as they would be if you were still working as an employee, for example), the premiums would be much more similar.
That makes sense. I wasn’t aware of the 3.6m cap, which would explain why it was so cheap. Add to that the fact that my second year freelancing (so the year that would determine income for NHI in my third year) went pretty well and my child was placed on my insurance, and that would explain the increase.
As always, thanks for the knowledge.
Employers foot half of the bill. Sole proprietors have to pay everything on their own.
On the flip side, the pension payments become much lower (a flat 16,000 a month). However, retirement payments will also be shit compared to someone who was a company employee.
There’s also a 5% tax added to all sole proprietors, just because.
The only way to get ahead is to make the most of tax deductions for business expenses.
Sorry, I gave incomplete information. My total income almost doubled compared to when I was at the company. As the tax bills show, my purchasing power definitely hasn't doubled alongside it, hence my advice toward OP to keep the day job or be very wary about leaving it.
I see, that makes sense! My full time job pays around 18M including bonus right now, so I'd definitely make less (but I do have a good nest egg that generates revenue to fall back on). Thanks so much for those details!
Not FAANG, although I applied to Google (but got rejected in the end...!), but working at a gaishikei. I work a LOT tbh and have significant impact internally, the company benefits hugely from it... Being able to take it easy for the first time in forever would be nice...
Would it be alright if I DM to ask more about your company and to understand how you secured your current position? I've been underpaid for years and have struggled to find a new job. Despite working > 60 hours a week at my current company, I earn less than half of what you do.
FIrst off congrats on the success of your channel and being a position where you have this choice. Many people in the thread saying "don't do it" are missing the point.
As others have mentioned, a huge advantage is being able to write off expenses especially if they are investments for yourself/your company.
On a broader note, make sure you have savings. I have my own company in entertainment and I have about 1-2 years of savings just in case something blows up. It can and will happen. If you don't have the savings yet, I would wait a bit until you have at least 6 months of average earnings.
Good luck!
Thank you! Fortunately I've been saving like crazy because I've been wanting to do FIRE (I don't buy anything, etc.) so I have significant savings. In a way going full time on YouTube would be semi FIRE!
I forgot to answer your last question, but I quit my job to become a full-time freelancer, and the first year was definitely pretty tough, because my health insurance premiums and residence tax were based off my previously or salary. And my first year of freelancing, I made about half of what I was making at my old job.
But hopefully, this year, my health insurance premiums will be based on my first year as a freelancer, so they should be a lot cheaper this year.
The “previous year” system here is so absurd.
When I moved here with my family a few years ago I had received literally a full year of corporate exec salary as an exit package. Lump sum, two weeks before I moved in late January, and yet was treated as if I had made zero the prior year. My entire family health insurance was comically small and the whole thing just felt wrong. So wrong that my wife and I went down to the govt office to triple confirm we weren’t going to get accused of scamming the system. The govt officer looked at our paperwork, I showed them what I had been paid weeks before the move, and they said there was no problem.
Bizarre.
I'm concerned with exactly that because I work as an independent consultant, which can have fluctuating income year-to-year, but my understanding is that you get the money back the following year if you overpay. So, I've put aside a "bad year income + high taxes" fund in case that happens, but it's definitely annoying.
That first year after definitely sucks for them.
But I know that you can go into the ward office and work out a payment plan, so that it’s stretched out over another year or two instead of having to try to pay it all in that first year.
For health insurance, if you currently have a job with shakai hoken, you can continue using that health insurance for two years with 任意継続. It will be more expensive than it is currently since you have to pay the portion that your job pays, but it will still be cheaper than 国民保険 in most cases.
After that, you can look into whether you can join an association that allows access to 文芸美術国民健康保険組合. Unfortunately, the one that Youtubers usually join is for Japanese people only, but perhaps you can find something that fits your particular type of Youtube content.
Oh wow, thank you, I didn't even realize those existed! Which is the association most Japanese YTers join? And what is the advantage of those 組合 compared to just joining Kokumin Hoken? It seems I have a lot of homework to do!
Japan Net Creator Association: https://jnca.or.jp/
Bunbi is usually cheaper then Kokumin Hoken as it is a flat versus being based on salary. You can also add dependents for a flat rate, which Kokumin Hoken does not allow. Currently Bunbi rates are 25700 yen per month. https://bunbi.com/general/general-001/
You will usually need to pay a membership fee to join an association, but even with a fee, the health insurance is still cheaper most of the time.
(I specify Bunbi here because it is the one most creators use, but depending on your location there are other options, like ones specifically for Tokyo.)
Yes, I mentioned that in the first comment. Howerver, this is not a Bunbi restriction, and many other associations do accept foreigners. (You will need to provide proof of residency.)
Sorry i missed it. If i understand correctly i need to join an association first to be able to join Bunbi? I'm a freelancer (KJ) working in the film industry (cinematographer)
Yes, the way it works is you apply to join an association and then they help you apply for Bunbi. Bunbi then decides whether to accept the application. It is a bit clunky, but it is kind of like how you get shakai hoken with a health insurance provider through a company. The health insurance (Bunbi) and the association are two different entities, and you cannot access the health insurance directly.
Unfortunately I am not familiar with what associations are available for film myself, but here is a full list of the associations: https://www.bunbi.com/about/groups/
What’s your visa status? Do you have permanent residency?
If you have a work visa, I don’t think you can just quit your job and become a full-time YouTuber, without having someone sponsor your visa.
If you’re on a spousal visa, or you have permanent residency, then you can do whatever you want.
OP out of curiosity, how many subscribers do you have and what are the average views you get per video. 6 - 10 million yen per year is decent for most folks.
I have only around 50,000 subscribers, and around 10,000 to 20,000 views per video. I release videos once or twice per week. YouTube itself makes only around 20% of the income, the rest is Patreon, sponsorships, and affiliate links from videos.
If you want more control over your income and taxation, you may want to consider opening a 株式会社 and channeling your YouTube income through the company. Many expenses related to your channel, such as (e.g. if you are streaming games) PC parts, software, desk/chair, camera equipment, etc, can be deducted. This can also be done through your tax return, but can be complex and may require you to meet certain thresholds.
With a company, as your YouTube income grows, it is trivially easy to reinvest it into the channel, such as by hiring freelancers to produce art assets, or going on a shopping spree for PC hardware before your FY closes. Other expenses such as coffee meetings, travel, studio/office rental, are also easily deductible. You could also allow the positive balance to be taxed as profit if you prefer. Your choice.
The downside is that as the president, you will need to specify your yearly salary in advance, which can be risky if your revenue drops off. But ultimately your taxes are lower, deductions are easier, and there are fewer surprises.
Whichever path you choose, congratulations on your success and good luck!
So that's actually something I'm uncertain about! With a company I'd need to pay the company tax and then the taxes on my salary, and this is something I haven't been able to wrap my head around...
Once your profits are over a certain threshold, they will be taxed. Income used to pay for things such as company expenses, including your own income, is not taxed.
It boils down to a simple equation: Income – Expenses = Profit.
Company income is what you receive from YouTube, sponsorships, subscriptions, affiliate income, etc.
Expenses include your salary, outsourcing, camera equipment, travel, meetings at Starbucks, your new iPhone (if used primarily for your work), the next game you plan to stream. Cars can also be expensed. You can probably start to visualise the advantage.
Profit is what is left over. This is taxed.
Taxes on company profits are higher than all income tax brackets, so it may seem more expensive at first glance. However, the advantage is that deductions like the examples above are so much easier through a company, so if you are smart about how you manage your company's finances, you will ultimately end up paying less tax in total.
Many Japanese companies strive for a profit close to (but above) 0, which is why they tend to go on spending splurges right before the end of the FY.
Separately, you have a finer degree of control over your actual income. The tax you pay depends entirely on whichever tax bracket you decide to slot yourself into. You can choose if you'd like to pay yourself a 500万円 salary or a 1,000万円 salary – it's up to you. This can be advantageous for your future, since you can control which deductions you qualify for.
This is not to say that this is the best or only way, but from personal experience – and with plenty of friends who have roughly the same setup – I recommend looking into it.
You are taking all the right steps and thinking of all the right things. Before you leave your current firm though, get your PR done if not already and if you need to buy a car or house on mortgage do it now, you will have a very tough time doing all that once you leave & congrats on your progress. Don’t worry about others saying you will make less money bc of x,y,z; it just doesn’t matter. Get it fkkn done!
Thanks so much! and good points, I already have the house, car (which I use almost exclusively for YouTube work, so expensive it with linear amortization), and PR! So all good on this front!
Yeah shougenai though, it’s still free money! Your Vlog does well, and you are getting USD revs from sponsors affiliates and advertising then you can pay it off as and when you want.
Reading all the comments and your replies, you are absolutely killing it! Well done to you! And good luck on freelancing! Keep us informed about your progress.
I would strongly advise against due to the volatility of the Youtube income.
Been around internet for a bit of time and over the past 20 years I have seen:
* My Adsense revenues dropping from a few $1000 per month to almost zero.
* Stock photography income divided by 10
* Youtube picking up but then also steadily decreasing
You have a hobby that gives you a huge additional income, just enjoy it while it lasts but don't fully rely on it. You can save that money and retire early from your other job !
BTW, isn't the tax rate on royalties lower (similar to earning coming from stocks) ?
My wife is also a freelance. The good thing is she can deduct a lot of expenses from her income. So she actually pays much less tax than being a company employee for the same incime.
I'm full time kojin jigyou, and taxes and hoken are very expensive since you're paying 100%.
Use everything that can be deducted from your taxes to keep things cheaper.
Congratz on 10M YT income, that's pretty amazing.
You don’t mention your visa status. That would be a big factor. If you are PR then you’re all ok of course.
Consider making a GK.
Pros:
- easy and cheap to setup if you can make the necessary documents in Japanese. There are books that explain step by step.
- control over your taxes to some extent. You can’t put all as business expenses, but you can limit your pay to what you need. Your company pays 30% on its profits after paying yourself, which is usually below your marginal tax rate.
- you can invest the extra money from your company with a securities account. Doesn’t have to be sleeping.
- with the taishokukin system, every year your company operates increases the cash amount that will be taxed very low when you decide to close the company.
Cons:
- mostly double the tax reporting burden
- inflexible pay system you can only change once a year
- requires business visa if not PR, which has very annoying requirements like a physical office
Thanks for this - and yes I do have PR (phew!). GK is something I thought about but the double tax reporting burden has been a big obstacle for me. I may need to look at it some more........ Mmmmmh. I need to think about that. The once per year pay system is a bit annoying for sure!
There is not a double tax reporting burden. Sole proprietors have to report their personal income, but if you set up a corporation you will be a salaried employee of that corporation, and salaried employees don’t need to file their taxes as a Kakutei Shinkoku. You would just have to file a final tax return for the company, and at the end of the year you would do an end of the year adjustment for yourself. You don’t do a personal Kakutei Shinkoku after that. Paying for withholding tax for employees (you) is a very simple and straightforward process.
Also, corporate taxes are not 30% for the numbers you stated, but rather 15% for corporate taxes and 10% residence tax. Note that because you’ll be paying yourself a salary, your corporate profits and therefore corporate taxes will likely be very low.
Setting up a company is not difficult if you do so with cloud based software like Freee.
It just depends on how much profit you’re planning on making. At some point, it will make more sense to set up a company and control your salary and profit rather than be fully taxed as an individual.
If you plan to retire here if you're paying into Kosei nenkin you get a bigger payout than if you are on kokumin nenkin so for the bigger picture you might want to take that into consideration.
Of course you could always do other stuff to offset that like invest in NISA and ideco to make up for the shortfall in your eventual payout.
>If you plan to retire here if you're paying into Kosei nenkin you get a bigger payout than if you are on kokumin nenkin so for the bigger picture you might want to take that into consideration.
You did mention iDeCo. But then the difference between category 1 and category 2 for iDeCo is substantial. as category 1 insured (Kokumin Nenkin only) you get to pay ¥68,000 per month into iDeCo.
Where as category 2 can only put in up to ¥23,000 per month (up to ¥20,000 depending if DC/DB)
So inspiring to see OP you achieved/ticked almost all the items in my ToDo list.
Sorry I don’t have any advice but really want your guidance on how can I FIRE
I see. Thanks for that. I was having trouble deciding if you were [Kiwami Japan](https://www.youtube.com/@kiwami-japan), [Konbini Confessions](https://www.youtube.com/@KONBINICONFESSIONS), [Wawawa](https://www.youtube.com/@wawawa1541), or [HMS2](https://www.youtube.com/channel/UCseOe3MfK8d2IjK2NoEpnaA)... 🤣
how's that even possible?
i heard that the payout is ridiculously low, and you'd need to have literally millions of views to earn any meaningful money
6.6M is even more than an average salaried employee gets in Japan
I'm going to speak generally, but depending on the niche the revenue you make is different. Dogen's niche, as well as Japan travel vloggers, typically make around $2 to $2.5 dollars per thousand views. Dogen, having short videos, is probably less. So from Youtube only, the income is negligible (maybe $200-$400 a month).
BUT, Dogen uses Youtube as a tool to redirect to his Patreon. He has over 1600 paid Patreon members according to Graphtreon, so with his Patreon ranks that's probably around $5000 income per month from Patreon only. And then he has merchandise. So definitely more than 6.6M (I group Patreon into the overall "Youtube Income")
This might be off chance but what about changing your work hours for a part time? If you're valued in your company they might want to keep you around as a part timer only and it would give you the safety if it doesn't go well, you just go back to full time?
Thanks for the extra information you gave OP and even more congratulations to you as the bulk of your income is not from your Youtube video revenue but Patreon, sponsorship etc. To get those bucks or that yen through creating and maintaining that support base means you\`ve got a great business sense and great communication skills with your audience and interested parties. Forging relationships are the key.
Especially interesting about the level of Patreon support you\`re getting. There are some youtubers who sound cringeworthy on Patreon. There\`s one annoying dude I saw on youtube because someone I know works with him and he basically \`reacts\` to movies and thinks because he\`s been around for a while chatting about the subject, it makes him a \`celebrity\`.
On his Patreon one of the things he was begging for a while ago was help with an electricity bill - this dude just smells of desperation. According to my friend he was live on youtube once when his power was cut by his electricity company because of non payment, it all went dark - and that was well before the begging for help with another electricity bill...............................No, he\`s not young and new to Japan.
Not being rude but are those J figures correct? 6.6 million is around 66,000 dollars US when the yen-dollar exchange rate is good? Do you mean that or is there some confusion about the yen figture?
If that\`s correct, damn you\`re making amazing money off youtube especially as there\`s been a huge slump across the board for many youtubers post Covid. If you quit your job you\`ll need to do the blue form for tax and if your income becomes inconsistent you\`ll find yourself paying a big increase in kokumin kenko hoken.
However, the total payable per year is capped at around 600,000 yen or so and before you think that is very expensive, no, not really considering people who are earning under 3 million yen (around 30,000 US if the exchange rate was equal) pay nearly 300,000 yen or so per year.
Are you really on track to earning about 100,000 US dollars in a three month period? If so it sounds like you can afford to quit your job and PR doesn\`t restrict you from doing that. But remember that youtube has changed the rules on people before.
The figure is correct, but I think you misunderstood!
Last year I made 6.6M JPY overall (so around 43,000 USD for the whole year at current exchange rate), and this year for the January-March period I made around 2.5M JPY (so assuming the same amount for each following quarter - which is conservative, as Q1 is typically the worse quarter of the year for me - that would be 10M across the whole year, or around 66,000 USD for the year)
one advice, if you want to take out mortgage to buy a property, you should do it before you quit your job. You probably won’t be able to take out loan for a few years and the loan amount will also be lower.
This too is GOAT advice, get a mortgage first OP!!
Thanks! Fortunately as part of my FIRE preparations, I already own a house and have paid off the loan - so this shouldn't be an issue
Wouldn't with FIRE preparations make more sense to have a long loan and keep the money invested? e.g. 50M JPY would "make" an extra ¥2-2.5M/year according to FIRE numbers (4-5%), while on a loan (35Y, 1%) you'd need to pay ¥1.7M/year, netting ¥0.3-0.8M/year on profit. Just curious why you decided to pay off a (presumably) low-interest loan instead of investing and paying it off the gains.
You're absolutely right! The main reason is psychological. I abhor debt and I abhor drawdown in investments. So my investments are more conservative and suffer less in a downturn, and I've effectively assumed they provide 3% a year (even though back testing says 5%). Heck, since the land around here has appreciated around 20% since I bought the house in theory I should just sell it and invest, and rent something or buy a cheaper house with a mortgage. But psychologically I'm having a hard time doing so.
Same here, I abhor debt. It's not a mathematical principle, it's personal. The peace of mind is priceless. If you otherwise have no debt, then really the only worry is lifestyle. I'll assume your property tax is also low, unless your property is YUUUGE. Therefore, even with an economic downturn (including YT income), it should be easy for you to adjust. As others have mentioned, multiple income streams is key, and sounds like you have that too. Just keep consistently putting excess cash in your investments and you should be good.
Exactly! And yeah my house is very modest, with the property tax correspondingly low :) Thank you!
My health insurance tripled when I left the company to go freelance. YouTube seems extremely risky w/r/t the algorithm and demonetization and I definitely wouldn't place my trust in it long-term. If your day job has long-term career prospects, please reconsider leaving it until you have multiple income streams.
I work with YouTubers, and several that I know have seen their YouTube revenue drop quite a bit in the last year or two even as views and subscribers have continued to grow. I tend to play it more conservatively, but I would consider leaving my job in the second year YT income surpassed my full time job, and only after saving an emergency fund of about 12 months of expenses.
Very interesting, thanks for the input! For me my subscriber count is very small, but income has been increasing steadily... This is the second year Youtube could basically easily cover all of my expenses. I've also worked extremely hard on FIRE, so I do have invested funds to sustain me for around 20 years if need be (although obviously I'd prefer to keep them generating income and not dip into them). But, yes, I may need to play it safe and stay employed for now... thanks!!
One of my friends is famous YouTuber in my home country (top 10), and he's still not dare to quit his job because it's not easy to control what YouTube is doing)
It sounds like you’ve just about checked the boxes I brought up, which is very good. If you don’t feel like you’re burning the candle at both ends, then it might make sense to keep working. If you think you can grow your channel even more with the extra time, then you have a good reason to do YT full time. As part of your calculations, give yourself a little stress test: If your YT income dropped to a half or a quarter, would you be okay until you could build it back up? With your investments and focus on FIRE it sounds like you’ll be fine. Good luck!
How are you projecting 10M JPY with a "small" subscriber count? How many subs do you have? (roughly)
Around 50k subscribers. I'm projecting from my Q1 income (and just extrapolating linearly, although based on previous years Q1 is the weakest of the quarters for me).
Oh wow man that’s great. If I can just ask one more follow up question is that revenue all from just YT views ? Or are you adding other things? I have an idea for a channel but honestly I thought to make even like 10M yen you’d have to have like 1 million subs or something….
Thanks for the input! And wow, 3x is crazy... I thought it would be 2x for the first year, and then the following year it should be cheaper since based on previous year income... Only around 20% of the income is YouTube, the other is Patreon, Affiliate Links, and Sponsorships. But yes, overall linked to # of views. Fortunately the channel is very safe in terms of niche wrt to demonetization risk. I do have interest and dividend income (basically using permanent portfolio on a semi-FIRE nest egg) to supplement the YouTube income (although I try not to touch it since I like compound interest). But yes you're giving me food for thought.
> Fortunately the channel is very safe in terms of niche wrt to demonetization risk. It sounds like you've made some very good decisions for yourself (I'm very jealous) but I would never, ever, ever EVER trust any YouTube channel as being safe. Please talk to some sempai youtubers, particularly ones who have faced copyright strikes, demonetization, and/or have lost followers due to changes in their physical status, looks, health, etc.
Understood, thank you for being the Voice of Reason! If it doesn't work out I can still try for jobs, presenting my break as a sabbatical... but yes I do see the risk. mmmh. Food for thought indeed.
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Thanks so much for this! And yeah my content is nerdy and sciency so I don't expect it to be controversial. So this is great information to know! A large part of my income comes from affiliate links, so I know exactly what you mean. Building a product for my niche and then selling it has been on my mind, although most of my audience is in the US so it's not that simple either :-) Congrats on being full time with you channel by the way! It's amazing for sure!
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Thank you!! I actually already have merch from Spreadshop, but it's a bit of an afterthought and I don't market it much. Maybe I should, but it's hard to have everything I want to advertize (Patreon, affiliate links, etc.),,,, By the way if you are who I think you are (There's a channel I watch sometimes that just sprang to mind from your messages), there is a possibility of collab, although it likely wouldn't be very rewarding for either of us (my niche and that channel's niche having very little of an intersection in terms of audience), but fun. Would it be OK to message you?
For most jobs you can be a voluntarily and continuously insured person at the same rate for two years after quitting. That's likely long enough to either incorporate, get big enough that a higher health insurance cost isn't an issue, or quit and go back to conventional employment.
I see, that looks like the right approach if I do make the jump. Thank you!
Why would your health insurance have tripled? Were you making triple than you were at your old company?
Kokumin hoken is more expensive than shakai hoken
Yes but under almost any conceivable circumstance it will not be double, let along triple... no?
I did something similar, but I was able to continue my employer’s plan for the first two years. When the kokumin kenko hoken kicked in my rate jumped to a little more than triple (with the caveat that my son was moved to my insurance that year). Anecdotal, but I’d say 2-3x is not out of the question.
Ok. Yes, you can voluntarily continue shakai hoken for up to two years. I think in your case it sounds like at least one (if not more?) dependants also switched to kokumin hoken, which can indeed make it more expensive. Thanks for the clarification!
Yes—the addition of a dependent certainly added to the increase, but it’s still going to be a big jump.
Yes, though unless you are in a particularly expensive municipality, it would be quite rare to see anything near a doubling. 1.5x is certainly within the range of possibility though.
Dont employers pay half of the medical insurance premiums? I'd expect when going self employed youd get a minimum of double the cost since you have to pay for the whole thing right?
While employers do bear half the cost, shakai hoken premiums are usually higher and the system offers better coverage. Generally switching to kokuho will generally not see anything close to double. Though of course depends somewhat on location and income.
> When the kokumin kenko hoken kicked in my rate jumped to a little more than triple If you're moving from voluntary continuation of employees' health insurance to NHI, most of the increased premium is not due to NHI being more expensive. The increase is mostly due to the very low premium cap that is applied to people who are voluntarily continuing employees' health insurance. (Basically, voluntary continuation premiums are calculated on the assumption that the former employee is not earning any more than 3.6 million yen per year.) Without the premium cap for voluntarily continuing employees, NHI and employees' health insurance are relatively competitive. NHI will *often* be a bit more expensive, and it can be quite a bit more expensive if you have a lot of dependents, but the difference is not enormous (nothing like 2-3 times). And note that the low premium cap doesn't apply to people who are enrolled in employees' health insurance *via their employer*. It only applies to people who are voluntarily continuing to be enrolled in employees' health insurance once they are no longer employed. So in terms of comparing NHI to regular employees' health insurance, talk of NHI being 2-3 times more expensive is absurd. The difference is never that large. However, if your income is relatively high and you are using the very low premium cap applicable to people who are voluntarily continuing employees' health insurance, then it is possible for your premiums to increase by 2-3 times as a result of losing voluntary continuation. Though I think it's misleading to suggest that this is because NHI premiums can be 2-3 times higher than employees' health insurance premiums, because the voluntary continuation premiums are being calculated on the assumption that your income is a maximum of 3.6 million yen per year, while your NHI premiums are being calculated on the basis of your actual income. If both premiums were calculated on the basis of your actual income (as they would be if you were still working as an employee, for example), the premiums would be much more similar.
That makes sense. I wasn’t aware of the 3.6m cap, which would explain why it was so cheap. Add to that the fact that my second year freelancing (so the year that would determine income for NHI in my third year) went pretty well and my child was placed on my insurance, and that would explain the increase. As always, thanks for the knowledge.
Employers foot half of the bill. Sole proprietors have to pay everything on their own. On the flip side, the pension payments become much lower (a flat 16,000 a month). However, retirement payments will also be shit compared to someone who was a company employee. There’s also a 5% tax added to all sole proprietors, just because. The only way to get ahead is to make the most of tax deductions for business expenses.
Sorry, I gave incomplete information. My total income almost doubled compared to when I was at the company. As the tax bills show, my purchasing power definitely hasn't doubled alongside it, hence my advice toward OP to keep the day job or be very wary about leaving it.
I see, that makes sense! My full time job pays around 18M including bonus right now, so I'd definitely make less (but I do have a good nest egg that generates revenue to fall back on). Thanks so much for those details!
Posts like this reminds me how poor I am 😂
Wow! Do you work for faang?
Not FAANG, although I applied to Google (but got rejected in the end...!), but working at a gaishikei. I work a LOT tbh and have significant impact internally, the company benefits hugely from it... Being able to take it easy for the first time in forever would be nice...
Would it be alright if I DM to ask more about your company and to understand how you secured your current position? I've been underpaid for years and have struggled to find a new job. Despite working > 60 hours a week at my current company, I earn less than half of what you do.
Go for it! I may be cagey about my answers, but I can definitely give you my opinion on your current situation!
Thank you! I’ll dm you sometimes this week
If you have dependents, shakai hoken stays the same but kokumin nenkin escalates.
FIrst off congrats on the success of your channel and being a position where you have this choice. Many people in the thread saying "don't do it" are missing the point. As others have mentioned, a huge advantage is being able to write off expenses especially if they are investments for yourself/your company. On a broader note, make sure you have savings. I have my own company in entertainment and I have about 1-2 years of savings just in case something blows up. It can and will happen. If you don't have the savings yet, I would wait a bit until you have at least 6 months of average earnings. Good luck!
Thank you! Fortunately I've been saving like crazy because I've been wanting to do FIRE (I don't buy anything, etc.) so I have significant savings. In a way going full time on YouTube would be semi FIRE!
I forgot to answer your last question, but I quit my job to become a full-time freelancer, and the first year was definitely pretty tough, because my health insurance premiums and residence tax were based off my previously or salary. And my first year of freelancing, I made about half of what I was making at my old job. But hopefully, this year, my health insurance premiums will be based on my first year as a freelancer, so they should be a lot cheaper this year.
Got it, that's indeed what I'm expecting to see!
The “previous year” system here is so absurd. When I moved here with my family a few years ago I had received literally a full year of corporate exec salary as an exit package. Lump sum, two weeks before I moved in late January, and yet was treated as if I had made zero the prior year. My entire family health insurance was comically small and the whole thing just felt wrong. So wrong that my wife and I went down to the govt office to triple confirm we weren’t going to get accused of scamming the system. The govt officer looked at our paperwork, I showed them what I had been paid weeks before the move, and they said there was no problem. Bizarre.
Yeah and I wonder what happens to high earners who just lose their job...
I'm concerned with exactly that because I work as an independent consultant, which can have fluctuating income year-to-year, but my understanding is that you get the money back the following year if you overpay. So, I've put aside a "bad year income + high taxes" fund in case that happens, but it's definitely annoying.
That first year after definitely sucks for them. But I know that you can go into the ward office and work out a payment plan, so that it’s stretched out over another year or two instead of having to try to pay it all in that first year.
By the way, does the Kenko Hoken get revised from April, like the residence tax?
I believe so, because I’m just about to make my last payment which is the March one. then, you usually don’t get the first one until July.
Each municipality has its own schedule. But it is usually around June, like residence tax.
For health insurance, if you currently have a job with shakai hoken, you can continue using that health insurance for two years with 任意継続. It will be more expensive than it is currently since you have to pay the portion that your job pays, but it will still be cheaper than 国民保険 in most cases. After that, you can look into whether you can join an association that allows access to 文芸美術国民健康保険組合. Unfortunately, the one that Youtubers usually join is for Japanese people only, but perhaps you can find something that fits your particular type of Youtube content.
Oh wow, thank you, I didn't even realize those existed! Which is the association most Japanese YTers join? And what is the advantage of those 組合 compared to just joining Kokumin Hoken? It seems I have a lot of homework to do!
Japan Net Creator Association: https://jnca.or.jp/ Bunbi is usually cheaper then Kokumin Hoken as it is a flat versus being based on salary. You can also add dependents for a flat rate, which Kokumin Hoken does not allow. Currently Bunbi rates are 25700 yen per month. https://bunbi.com/general/general-001/ You will usually need to pay a membership fee to join an association, but even with a fee, the health insurance is still cheaper most of the time. (I specify Bunbi here because it is the one most creators use, but depending on your location there are other options, like ones specifically for Tokyo.)
That first link doesn't work for me
It has a trailing space, try this: [https://jnca.or.jp/](https://jnca.or.jp/)
Thank you!
Unfortunately, JNCA doesn't accept foreigners
Yes, I mentioned that in the first comment. Howerver, this is not a Bunbi restriction, and many other associations do accept foreigners. (You will need to provide proof of residency.)
Sorry i missed it. If i understand correctly i need to join an association first to be able to join Bunbi? I'm a freelancer (KJ) working in the film industry (cinematographer)
Yes, the way it works is you apply to join an association and then they help you apply for Bunbi. Bunbi then decides whether to accept the application. It is a bit clunky, but it is kind of like how you get shakai hoken with a health insurance provider through a company. The health insurance (Bunbi) and the association are two different entities, and you cannot access the health insurance directly. Unfortunately I am not familiar with what associations are available for film myself, but here is a full list of the associations: https://www.bunbi.com/about/groups/
Oh wow this is invaluable advice, thank you so much!
What’s your visa status? Do you have permanent residency? If you have a work visa, I don’t think you can just quit your job and become a full-time YouTuber, without having someone sponsor your visa. If you’re on a spousal visa, or you have permanent residency, then you can do whatever you want.
Sorry I should have specified it, I do have PR
OP out of curiosity, how many subscribers do you have and what are the average views you get per video. 6 - 10 million yen per year is decent for most folks.
I have only around 50,000 subscribers, and around 10,000 to 20,000 views per video. I release videos once or twice per week. YouTube itself makes only around 20% of the income, the rest is Patreon, sponsorships, and affiliate links from videos.
Thanks for answering! Last question: How long did it take to amass such a following?
A bit over 4 years now... I wish I had had some viral video or something, but no such luck!
Good to know. Thanks for taking the time to answer!
If you want more control over your income and taxation, you may want to consider opening a 株式会社 and channeling your YouTube income through the company. Many expenses related to your channel, such as (e.g. if you are streaming games) PC parts, software, desk/chair, camera equipment, etc, can be deducted. This can also be done through your tax return, but can be complex and may require you to meet certain thresholds. With a company, as your YouTube income grows, it is trivially easy to reinvest it into the channel, such as by hiring freelancers to produce art assets, or going on a shopping spree for PC hardware before your FY closes. Other expenses such as coffee meetings, travel, studio/office rental, are also easily deductible. You could also allow the positive balance to be taxed as profit if you prefer. Your choice. The downside is that as the president, you will need to specify your yearly salary in advance, which can be risky if your revenue drops off. But ultimately your taxes are lower, deductions are easier, and there are fewer surprises. Whichever path you choose, congratulations on your success and good luck!
So that's actually something I'm uncertain about! With a company I'd need to pay the company tax and then the taxes on my salary, and this is something I haven't been able to wrap my head around...
Once your profits are over a certain threshold, they will be taxed. Income used to pay for things such as company expenses, including your own income, is not taxed. It boils down to a simple equation: Income – Expenses = Profit. Company income is what you receive from YouTube, sponsorships, subscriptions, affiliate income, etc. Expenses include your salary, outsourcing, camera equipment, travel, meetings at Starbucks, your new iPhone (if used primarily for your work), the next game you plan to stream. Cars can also be expensed. You can probably start to visualise the advantage. Profit is what is left over. This is taxed. Taxes on company profits are higher than all income tax brackets, so it may seem more expensive at first glance. However, the advantage is that deductions like the examples above are so much easier through a company, so if you are smart about how you manage your company's finances, you will ultimately end up paying less tax in total. Many Japanese companies strive for a profit close to (but above) 0, which is why they tend to go on spending splurges right before the end of the FY. Separately, you have a finer degree of control over your actual income. The tax you pay depends entirely on whichever tax bracket you decide to slot yourself into. You can choose if you'd like to pay yourself a 500万円 salary or a 1,000万円 salary – it's up to you. This can be advantageous for your future, since you can control which deductions you qualify for. This is not to say that this is the best or only way, but from personal experience – and with plenty of friends who have roughly the same setup – I recommend looking into it.
Thank you so much for all those details. Food for thought!
You are taking all the right steps and thinking of all the right things. Before you leave your current firm though, get your PR done if not already and if you need to buy a car or house on mortgage do it now, you will have a very tough time doing all that once you leave & congrats on your progress. Don’t worry about others saying you will make less money bc of x,y,z; it just doesn’t matter. Get it fkkn done!
Thanks so much! and good points, I already have the house, car (which I use almost exclusively for YouTube work, so expensive it with linear amortization), and PR! So all good on this front!
Yeah shougenai though, it’s still free money! Your Vlog does well, and you are getting USD revs from sponsors affiliates and advertising then you can pay it off as and when you want.
What’s your YouTube?
Sorry I don't want to reveal it... I've given a bit of information about it in other comments
Or at least share the theme/topics?
Reading all the comments and your replies, you are absolutely killing it! Well done to you! And good luck on freelancing! Keep us informed about your progress.
Thanks so much! Cheers!
I would strongly advise against due to the volatility of the Youtube income. Been around internet for a bit of time and over the past 20 years I have seen: * My Adsense revenues dropping from a few $1000 per month to almost zero. * Stock photography income divided by 10 * Youtube picking up but then also steadily decreasing You have a hobby that gives you a huge additional income, just enjoy it while it lasts but don't fully rely on it. You can save that money and retire early from your other job ! BTW, isn't the tax rate on royalties lower (similar to earning coming from stocks) ?
Thanks for the advice! mmmh as I understand it's taxed as additional income on top of my full time job salary, and not royalties...
you're right, I remembered the "non-resident" tax rate from when I was young and innocent.
My wife is also a freelance. The good thing is she can deduct a lot of expenses from her income. So she actually pays much less tax than being a company employee for the same incime.
Makes sense!
I'm full time kojin jigyou, and taxes and hoken are very expensive since you're paying 100%. Use everything that can be deducted from your taxes to keep things cheaper. Congratz on 10M YT income, that's pretty amazing.
Yep, I make sure to expense anything that I use primarily for the channel. Thanks!
How are you dealing with visa?
I have PR!
You don’t mention your visa status. That would be a big factor. If you are PR then you’re all ok of course. Consider making a GK. Pros: - easy and cheap to setup if you can make the necessary documents in Japanese. There are books that explain step by step. - control over your taxes to some extent. You can’t put all as business expenses, but you can limit your pay to what you need. Your company pays 30% on its profits after paying yourself, which is usually below your marginal tax rate. - you can invest the extra money from your company with a securities account. Doesn’t have to be sleeping. - with the taishokukin system, every year your company operates increases the cash amount that will be taxed very low when you decide to close the company. Cons: - mostly double the tax reporting burden - inflexible pay system you can only change once a year - requires business visa if not PR, which has very annoying requirements like a physical office
Thanks for this - and yes I do have PR (phew!). GK is something I thought about but the double tax reporting burden has been a big obstacle for me. I may need to look at it some more........ Mmmmmh. I need to think about that. The once per year pay system is a bit annoying for sure!
There is not a double tax reporting burden. Sole proprietors have to report their personal income, but if you set up a corporation you will be a salaried employee of that corporation, and salaried employees don’t need to file their taxes as a Kakutei Shinkoku. You would just have to file a final tax return for the company, and at the end of the year you would do an end of the year adjustment for yourself. You don’t do a personal Kakutei Shinkoku after that. Paying for withholding tax for employees (you) is a very simple and straightforward process. Also, corporate taxes are not 30% for the numbers you stated, but rather 15% for corporate taxes and 10% residence tax. Note that because you’ll be paying yourself a salary, your corporate profits and therefore corporate taxes will likely be very low. Setting up a company is not difficult if you do so with cloud based software like Freee. It just depends on how much profit you’re planning on making. At some point, it will make more sense to set up a company and control your salary and profit rather than be fully taxed as an individual.
If you plan to retire here if you're paying into Kosei nenkin you get a bigger payout than if you are on kokumin nenkin so for the bigger picture you might want to take that into consideration. Of course you could always do other stuff to offset that like invest in NISA and ideco to make up for the shortfall in your eventual payout.
Oh that's a good point as well - I need to check on that!
>If you plan to retire here if you're paying into Kosei nenkin you get a bigger payout than if you are on kokumin nenkin so for the bigger picture you might want to take that into consideration. You did mention iDeCo. But then the difference between category 1 and category 2 for iDeCo is substantial. as category 1 insured (Kokumin Nenkin only) you get to pay ¥68,000 per month into iDeCo. Where as category 2 can only put in up to ¥23,000 per month (up to ¥20,000 depending if DC/DB)
So inspiring to see OP you achieved/ticked almost all the items in my ToDo list. Sorry I don’t have any advice but really want your guidance on how can I FIRE
I've been extremely stingy and saved every penny to be honest...
What’s your channel? I’d like to give it a watch.
Sorry, I prefer not revealing it for now. It's an extremely niche and nerdy channel :)
OK, but that is just going to make me dig for extremely niche and nerdy YouTube channels in Japan. 😂
To be honest it has nothing to do with being in Japan, I could be doing the same channel from anywhere :)
I see. Thanks for that. I was having trouble deciding if you were [Kiwami Japan](https://www.youtube.com/@kiwami-japan), [Konbini Confessions](https://www.youtube.com/@KONBINICONFESSIONS), [Wawawa](https://www.youtube.com/@wawawa1541), or [HMS2](https://www.youtube.com/channel/UCseOe3MfK8d2IjK2NoEpnaA)... 🤣
Yeah I knew the guessing game would start :D
"Last year my Youtube income was 6.6M yen" are you Dogen?
Nope! My guess is Dogen would have far more income...
how's that even possible? i heard that the payout is ridiculously low, and you'd need to have literally millions of views to earn any meaningful money 6.6M is even more than an average salaried employee gets in Japan
I'm going to speak generally, but depending on the niche the revenue you make is different. Dogen's niche, as well as Japan travel vloggers, typically make around $2 to $2.5 dollars per thousand views. Dogen, having short videos, is probably less. So from Youtube only, the income is negligible (maybe $200-$400 a month). BUT, Dogen uses Youtube as a tool to redirect to his Patreon. He has over 1600 paid Patreon members according to Graphtreon, so with his Patreon ranks that's probably around $5000 income per month from Patreon only. And then he has merchandise. So definitely more than 6.6M (I group Patreon into the overall "Youtube Income")
first off, congrats! second. I would rather not if i were you
not helping but just wanted to say congratulations and keep it up!
There is 3rd option health insurance you could use as an artist .. heard it’s a lot cheaper.. but need to know someone currently using it
This might be off chance but what about changing your work hours for a part time? If you're valued in your company they might want to keep you around as a part timer only and it would give you the safety if it doesn't go well, you just go back to full time?
Thanks for the extra information you gave OP and even more congratulations to you as the bulk of your income is not from your Youtube video revenue but Patreon, sponsorship etc. To get those bucks or that yen through creating and maintaining that support base means you\`ve got a great business sense and great communication skills with your audience and interested parties. Forging relationships are the key. Especially interesting about the level of Patreon support you\`re getting. There are some youtubers who sound cringeworthy on Patreon. There\`s one annoying dude I saw on youtube because someone I know works with him and he basically \`reacts\` to movies and thinks because he\`s been around for a while chatting about the subject, it makes him a \`celebrity\`. On his Patreon one of the things he was begging for a while ago was help with an electricity bill - this dude just smells of desperation. According to my friend he was live on youtube once when his power was cut by his electricity company because of non payment, it all went dark - and that was well before the begging for help with another electricity bill...............................No, he\`s not young and new to Japan.
Congrats on the channel!! no input to add unfortunately lol
Not being rude but are those J figures correct? 6.6 million is around 66,000 dollars US when the yen-dollar exchange rate is good? Do you mean that or is there some confusion about the yen figture? If that\`s correct, damn you\`re making amazing money off youtube especially as there\`s been a huge slump across the board for many youtubers post Covid. If you quit your job you\`ll need to do the blue form for tax and if your income becomes inconsistent you\`ll find yourself paying a big increase in kokumin kenko hoken. However, the total payable per year is capped at around 600,000 yen or so and before you think that is very expensive, no, not really considering people who are earning under 3 million yen (around 30,000 US if the exchange rate was equal) pay nearly 300,000 yen or so per year. Are you really on track to earning about 100,000 US dollars in a three month period? If so it sounds like you can afford to quit your job and PR doesn\`t restrict you from doing that. But remember that youtube has changed the rules on people before.
The figure is correct, but I think you misunderstood! Last year I made 6.6M JPY overall (so around 43,000 USD for the whole year at current exchange rate), and this year for the January-March period I made around 2.5M JPY (so assuming the same amount for each following quarter - which is conservative, as Q1 is typically the worse quarter of the year for me - that would be 10M across the whole year, or around 66,000 USD for the year)
Congratulations on your success, what is your channel?
Interesting