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Since national statistics, however revealing, tell us little about
the day-to- day lifestyles -- not to mention the financial dreams and
fears -- of a country's citizens, MONEY's reporters traveled around
the globe to interview three affluent, well-educated families in the
world's largest economies: the Kukiharas of Fukuoka in Japan, the
Hagels of Salmbach in the former West Germany and the Orrocks of Eden
Prairie, Minn. Their stories, beginning with that of the Kukiharas,
start here.

In Japan, where the schools you attend largely determine where you
will work and how much you will earn, Tetsuo Kukihara, 36, had it
made. In 1978, he graduated with a degree in business management from
Tokyo's Gakushuin University, the prestigious private college that is
Emperor Akihito's alma mater. But unlike many of his hard-driving
fellow graduates, Tetsuo passed up the chance to work for a major
corporation in Tokyo and instead hightailed it back to his hometown
of Fukuoka, a city of 1.2 million that lies on the Hakata Bay, 730
miles southwest of Tokyo. The reason was simple: there, far from the
hassles of high-priced Tokyo, Tetsuo could afford a better quality of
In Fukuoka, he took a job with the city government, where he still
works as coordinator of the 1995 Universiade Games, the Olympics for
college athletes. The post pays him 6.4 million yen a year ($46,720),
slightly above average for a Japanese man his age, but about 10% to
20% less than he might make in a comparable position in Tokyo. (All
subsequent monetary figures are quoted in dollars using a
late-August 1991 exchange rate.) Still, Tetsuo has no regrets.
''Food, land and houses are all much cheaper in Fukuoka than
Tokyo,'' he explains -- often five to 10 times cheaper. ''And I also
enjoy nonfinancial advantages, like the fact that my subway commute
to work is only 30 minutes long.'' Compare that with the jam-packed
hour-or-more train ride most commuters face twice a day in Tokyo
(pop. 8.3 million). Tetsuo's decision to forgo Tokyo's fast track for
the slower pace and lower cost of his hometown is common enough among
young Japanese to merit its own phrase: the U-turn phenomenon.
Apart from seeking a lower-stress way of life, Tetsuo had another
good reason to return to Fukuoka. His parents had purchased land
there before Japanese big-city real estate prices, fueled by
speculation, more than tripled in the 1980s. Tetsuo, his wife
Shizuka, 35, and their two daughters, Miyuki, 9, and Nozomi, 7, thus
consider themselves lucky to share a seven-room house with Tetsuo's
mother Eiko, 64, a retired schoolteacher. If it weren't for this
accident of birth, Tetsuo would not be able to house his family
nearly as comfortably on his income, which includes an annual $526
housing subsidy, $1,156 to cover his commuting costs and a $3,916
family allowance. Even in Fukuoka, cramped four-room,
800-square-foot condominiums sell for $220,000 to $440,000. Given
Japan's stratospheric real estate prices, it's not surprising that
14% of all households there shelter three generations under one roof,
compared with about 3% in the U.S.
The Kukiharas' two-story, 1,776-square-foot house in a densely
populated residential neighborhood is virtually the same size as the
average 1,766- square-foot abode in the U.S. Yet that makes the
Kukiharas' place more than + 800 square feet larger than the typical
Japanese dwelling. At 5,683 square feet (about an eighth of an acre),
the Kukiharas' neatly landscaped lot is about twice the size of most
plots in Fukuoka. Value of the house and land: a cool $1.05 million.
That figure doesn't make Fukuoka sound like a bargain, but consider
that a comparable house in Tokyo -- if you could find one -- would
fetch a breathtaking $10.5 million.
Tetsuo's mother and her late husband Takashi, a grade school
principal, bought the land on which the family's house now stands for
roughly $73,000 in 1971. At the time, the plot was surrounded by rice
fields. They spent another $73,000 to build the house, which is now
hemmed in on all sides by other homes and apartment buildings. Says
Eiko, a plump, gregarious woman with jet black hair: ''My husband and
I worked together to buy land. It would have been much more difficult
for us if I hadn't worked.'' Today, roughly 40% of Japanese women are
in the work force, vs. 34% in 1970. The U.S. figure today is 57%.
Eiko, in fact, is something of a real estate tycoon. She also owns
a smaller house worth roughly $765,000 that she rents out, plus a
six-unit apartment building, both in Fukuoka. She built the apartment
house with $73,000 of the $135,000 she received as a lump-sum pension
payment when she quit her teaching job in 1978. When the one-room
flats are filled, usually with students from nearby Kyushu
University, Eiko collects $1,100 a month in rent.
Since Tetsuo and Shizuka aren't burdened by a mortgage, they can
afford luxuries. Their greatest indulgence was a $65,700 renovation
of their whole house undertaken in 1988. Drawing $25,550 from his
savings, Tetsuo borrowed the remaining $40,150 of the total cost from
a bank at 5.5% interest. He's now paying back the 25-year home
improvement loan at a rate of $2,745 a year. The Kukiharas modernized
the bathroom (many Japanese houses and public buildings still have
porcelain pit toilets) and enlarged their kitchen by adding a
skylighted, bay-windowed family room. Its furnishings include a
kotatsu -- a low, electrically heated table that the Kukihara clan
covers with a comforter and huddles under on cold winter nights while
they watch television. The Kukiharas' house, unlike 80% of Japanese
dwellings, has central heating. But the family uses kerosene space
heaters instead, because they prefer to heat rooms only while they
are occupied.
Like many Japanese, the Kukiharas have mixed Eastern and Western
design throughout their house. Tetsuo and Shizuka also follow the
Japanese custom of sharing their futon-furnished, 12-foot-by-16-foot
bedroom with their seven- and nine-year-old daughters. Mimicking a
mother hugging a baby, Shizuka somewhat sheepishly explains: ''The
girls are just about the age when they should move to their own room,
but I've been reluctant to let them go.''
If the Kukiharas' sizable house didn't mark them as affluent,
their two cars certainly would. Only 20% of Japanese families own
more than one auto, compared with 65% in the U.S., and residents of
densely populated areas must prove they have a parking space before
they are allowed to buy a car. Tetsuo and Shizuka drive a compact
1981 Mazda Familia bought used four years ago for $1,825. Last year
Eiko paid $18,250 cash for a new four-door Nissan Laurel sedan.
The Kukiharas do most of their shopping at Daiei, a three-story
emporium that sells appliances, groceries and moderately priced
clothing. Discount stores like Daiei are unusual and controversial in
Japan, where retailing is still dominated by full-price department
stores and mom-and-pop shops. The Kukiharas eat local fish more often
than pricier meats. When they do buy beef, they choose American or
Australian steaks, which, even at $12.38 a pound, cost about half as
much as Japanese beef. Home-grown beef is more expensive because it's
relatively scarce: the Japanese devote only 2% or so of their land to
pastures vs. 36% in the U.S. Despite such economies, the Kukiharas
still spend 11% of their income on groceries, considerably more than
do the German (5%) and American (7%) families profiled on pages 108
and 122.
The Kukiharas keep their leisure expenditures modest -- about
$4,000 a year, chiefly because Tetsuo doesn't have much time off. He
gets six days of paid vacation in the summer and another six at
year-end, and actually uses all 12 days. That's unusual in Japan,
where workers generally take off only half of the time they are
entitled to, partly to express their devotion to their employers.
Until 1989, Tetsuo toiled six days a week; he now gets two Saturdays
off each month and next year will work only five days a week.
Unfortunately for Tetsuo, he'll still have to put in his usual 40 1/2
hours a week, compared with 39 a week for the typical American. So
having Saturdays off will mean only that he must work longer hours on
weekdays. Nevertheless, he finds the notion of a two-day weekend
extremely appealing because he'll have more time to play golf,
which is Japan's national passion. But he will not tee off every
weekend, because a round of golf costs $70 to $170 at the private
clubs where he plays.
Like many Japanese parents, the Kukiharas spend a fair portion of
their income, about 8%, on their children's education -- even though
their daughters attend public schools. Miyuki, a fourth-grader,
attends weekly hour-long language and mathematics classes at a juku,
or cram school, that prepares students for junior high school
entrance examinations. Nozomi, a second- grader, takes weekly
language lessons at the juku. Total monthly cost: $110. Miyuki also
takes swimming classes ($37 a month), and both girls are learning to
play the piano ($117 a month).
Unlike the average Japanese, who socks away 14% of his after-tax
income, the Kukiharas aren't maniacal savers. They put away roughly
7% of Tetsuo's post- tax pay (compared with 5% for the average
American family), chiefly in government-backed utility-company bonds
now yielding 6%.
The Kukiharas' ability to invest is aided by the fact that their
taxes and health-care outlays are quite low by American standards.
Tetsuo pays only 12% of his salary in national, prefectural (the
Japanese equivalent of state), municipal and property taxes. Property
taxes cost the family $2,453 a year, but Eiko pays almost all of
them. Like most industrialized nations, Japan has a national sales
tax, or value-added tax (VAT), but it's a modest 3%. In return for
low taxes, the Japanese receive fewer municipal services than
Americans have come to expect. For example, only 62% of Japanese
houses are connected to municipal sewerage systems or septic tanks,
compared with 99% of U.S. houses. In Japan, trucks make the rounds of
dwellings that lack sewerage or septic systems and cart their waste
to landfills. Individual taxes are also low because levies on
Japanese corporations account for 35% of total tax receipts. In the
U.S., businesses contribute only 8% of all tax revenues.
Tetsuo pays $876 a year to cover his family under Japan's
comprehensive national health insurance plan; his employer chips in
approximately the same amount. Tetsuo must pay 10% of his doctor
bills and 20% of Shizuka's and the children's charges. His
out-of-pocket medical expenses total about $220 a year.
Despite their financial good fortune, the Kukiharas do have two
major worries. One is retirement. Tetsuo fears that he and his fellow
baby boomers , will receive less generous pension benefits than his
mother got, chiefly because her generation was smaller. Compounding
his anxiety is the fact that, by law, he must retire at age 60 but
cannot begin to collect his pension until age 65. This gap between
mandatory retirement and pension payments, traditional in Japan,
forces many retirees to take lower-paying jobs for three to five
years at one of their former employer's subsidiaries or, in Tetsuo's
case, at a firm that does business with Fukuoka's municipal
government. Indeed, 36% of Japanese men ages 65 and older are
employed, compared with just 16% of American men. Tetsuo wants to
avoid working after he is forced to retire from his civil service
job, so he plans to invest in an annuity from a financial services
company when he's in his forties.
The Kukiharas' other financial fear is that confiscatory
inheritance taxes will prevent their daughters from living as well as
they do. Assuming that Tetsuo splits his mother's $2.2 million estate
with his sister, they will lose nearly half of it to inheritance
taxes. To raise cash for the tax man after his mother's death, Tetsuo
figures that he and his sister will have to sell their mother's
rental house or apartment building. After Tetsuo's gone, his
daughters will probably be forced to sell one of the two remaining
properties. Says Tetsuo, who is resigned yet wistful: ''There's an
old saying in Japan -- after three generations have passed, the
family loses everything it ever had.''


Tetsuo's $46,720 annual income includes a $526 housing subsidy,
$1,156 to cover his commuting costs, and a $3,916 family allowance,
all virtually tax- free.

INCOME (in U.S. dollars)
Tetsuo's salary $41,122
Housing, commuting
and family subsidies
and allowances 5,598
TOTAL $46,720

(in dollars and as a percentage of income)

Housing $11,790 25%
Taxes 5,606 12
Groceries 5,256 11
Life insurance 4,643 10
and vacations 4,103 9
Education 3,679 8
Savings 2,774 6
Pension plan
contributions 2,102 5
Transportation 2,059 4
Personal and
- miscellaneous 1,992 4
Clothing 1,621 4
Health care 1,095 2
TOTAL $46,720 100%