Will It Change in 2025!? Financial Rules of the Parent Generation and Smart Ways to Use Money in the Future

Will It Change in 2025!? Financial Rules of the Parent Generation and Smart Ways to Use Money in the Future

2025年06月06日 16:23


1. Introduction: Considering Generational Differences in Money Rules

The parent generation, who became working adults before the 1990s, formed their assets while benefiting from lifetime employment and high economic growth. However, Japan in 2025 is under a complex environment of population decline, ultra-low interest rates, digitalization, and inflation. Applying the common sense of the parent generation as is may lead to opportunity losses and debt risks. Here, using the "limitations of old rules" pointed out by India's financial media NDTV Profit as a clue, we propose a new asset strategy for Japan's Millennial and Z generations.




2. The "Homeownership Supremacy" Believed by the Parent Generation and Modern Housing Situations

For the parent generation, "buying a house = success" was a symbol. The article also states that "homeownership was non-negotiable." However, in urban areas, the average price of new condominiums exceeds 100 million yen, and a 35-year mortgage carries interest rate rise risks. Furthermore, with the spread of remote work, "working styles not bound to the workplace" are progressing. There are increasing cases where renting plus asset management is more advantageous in terms of liquidity and flexibility.



2-1. Benefits of the Rent + Investment Model

  • Lower initial costs increase surplus funds available for investment

  • Flexibility for career changes and regional relocation

  • Avoid unexpected costs like property taxes and major repairs




2-2. If Purchasing, Compare "Total Costs"

Prospective buyers should always simulate "interest rate rise" and "exit strategies (renting out or selling) in case of transfers or job changes."




3. The Future of Gold Belief: The Importance of Diversified Investment

Like in India, gold is also popular in Japan as an "asset in times of crisis." The article emphasizes that "gold is a safe asset, but concentrated investment is dangerous." Domestically, gold prices are reaching record highs, but it is difficult to expect returns significantly exceeding inflation. Instead, by creating a portfolio that mixes index funds, overseas ETFs, and REITs, you can enhance returns while controlling risks.




4. Choosing Investment Products to Beat Inflation

Fixed deposits (around 0.002% interest) and Japan Post fixed savings alone cannot keep up with inflation of around 2% per year. NDTV Profit also points out that "traditional low-risk products alone will lose to inflation." In Japan,


  1. Tsumitate NISA (tax-free up to 1.2 million yen annually from 2024)

  2. iDeCo (contributions fully deductible from income)

  3. Global Stock Index Funds (trust fees around 0.05%)

    By utilizing these three pillars, you can enjoy both long-term compounding and tax advantages.





5. Means of Transportation and Asset Value: Cars as "Depreciating Assets"

For the parent generation, cars were "symbols of success," but the article reveals that "cars are depreciating assets with high maintenance costs." In Japan, it's not uncommon for annual costs to exceed 500,000 yen due to gasoline, inspections, and parking fees. In urban areas, it's more rational to replace cars with public transportation passes and car-sharing, and to invest the saved funds.




6. The Transformation of the Myth of Stability in Public Service

NDTV Profit argues that "by 2025, government jobs will still be stable but not the only path." In Japan, wage increases based on the National Personnel Authority's recommendations are slowing. In private IT, finance, and startups, there are cases where annual income can be more than double, with a noticeable trend of "skill value = income." The lifting of bans on side jobs is also progressing, making multi-track career planning a practical solution.




7. How Technology and Globalization Have Changed Money's Premises

  • AI and Automation: Risk of Replacement for White-Collar Jobs

  • Fintech: Investment Becomes Accessible with Zero-Fee Trading Apps

  • Digital Currency and Point Economy: Essential to Protect Assets Beyond Yen

    These changes are progressing at a speed that the parent generation did not experience.





8. Case Study ①: 30-year-old Single Office Worker Living in Tokyo

Items

Current Situation

Improved Model

Residence

1LDK Rental 120,000 yen

Shared Office Attached Studio 90,000 yen + Difference Invested

Transportation

Private Car + Parking 40,000 yen

Car Sharing + Train 15,000 yen

Investment

Ordinary Savings 2,000,000 yen

Full Tsumitate NISA + Global Stock ETF

Retirement

Employees' Pension Only

iDeCo 12,000 yen/month + Corporate DC

After improvement, the annual investment amount increases by 1,200,000 yen, and it is expected to increase by about 40,000,000 yen over 30 years (assuming an annual interest rate of 4%).




9. Case Study ②: 35-year-old Family with Children Living in a Rural Area

For a mortgage of 30,000,000 yen with an interest rate of 0.9% and a remaining term of 30 years, the monthly repayment is about 90,000 yen. A simulation shows that securing an average return of 4% through Tsumitate NISA + iDeCo is more beneficial for the household budget than making extra repayments.




10. Ask the Experts: A Financial Planner's Perspective

  1. Reduce Fixed Costs to Secure Investment Capacity

  2. Insurance Should Be "Term + Minimum Necessary"

  3. Investing Should Follow the Three Principles of "Time × Diversification × Low Cost"





11. The Importance of Financial Education and What Can Be Done at Home

NDTV Profit also suggests that "the success experiences of the parent generation shape the financial views of children." In Japan, financial education has become mandatory in elementary schools, but practical application at home is essential. Utilize allowance tracking apps and family NISA to let children experience the cycle of "spending, saving, and growing."




12. Dialogue with Parents: Tips for Updating Values

  • Respect the success experiences of the parent generation while demonstrating with "numbers"

  • Conduct a joint asset inventory to visualize risks and returns

  • Share life plans, including caregiving and inheritance, early





13. Common Pitfalls and Avoidance Strategies

Pitfalls

Example

Avoidance Strategies

Expensive Home

Job change leading to a loss on sale

Diversify with rental + REIT

Ignoring Inflation

10 million yen in cash savings

Gradual transition to Tsumitate NISA

Information Overload

Swayed by speculative information on SNS

Reliable primary sources and a long-term perspective




14. Asset Formation with an Eye on the Future: Financial Literacy in the AI Era

Robo-advisors, household analysis tools using generative AI, and blockchain securities—these may become "commonplace" in five years. Now is the time when a "continuous learning attitude" is the greatest investment.




15. Summary: The Ultimate Asset Strategy with Parental Wisdom × Modern Tools

  • Wisdom of Defense: Avoid Wasteful Spending, Plan with a Long-term Perspective

  • Tools of Offense: Low-Cost Investments, Online Banking, Side Jobs

  • Flexible Mindset: Shift from "Owning" to "Utilizing"



As NDTV Profit's analysis indicates, the money rule for 2025 is "adaptability to change" which will determine success or failure. While respecting the values of the parental generation, let's nurture assets with digital age strategies and maximize life choices.




Reference Links





Reference Articles

Money Rules of the Parental Generation That Won't Work in 2025
Source: https://www.ndtvprofit.com/personal-finance/money-rules-followed-by-your-parents-no-longer-work-in-2025

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