Back in 1983 when I first came to Japan on a working holiday visa, I was a backpacker with the experience of having hitchhiked half way around the world (I never made it past Turkey, what with the Iranian crisis back then). So arriving in Japan I was determined to live as cheaply as possible and use the savings to pay for language lessons and travel. Now, 25 years later, I'm pleased to be able to report that backpackers arriving in Japan these days don't pay that much more than I was back then - although of course salaries haven't moved up that much either!

It's pretty hard to be thrifty as a family in Tokyo, although it is possible in regional cities and in rural areas. It is generally accepted that the minimum a 2-child Japanese family can get by on, if mom is staying at home, is about JPY4.5M a year. This includes everything and assumes that the family is renting, but possibly saving a small amount each month for a mortgage on a house by the time the parents are in their late 30's or early 40's.

As I described last week, the lifestyle costs for expats is a different universe to most of us. I was once told by a major American IT firm that bringing a 35-45 year old expat boss on a JPY20M salary and his family to Japan costs them between JPY40M and JPY50M a year. This is clearly why most foreign firms have very few expat employees, and those that do have foreigners try to hire them locally.

Some years ago I wrote about the cost of living in Japan - mainly for the benefit of those who are being hired outside the country. By covering some of the typical structuring and perks, though, I hope this article will be useful for those of you negotiating new terms with your employers - especially if you work alongside expat colleagues who probably are on these terms. If nothing else, you can tell the boss how much cheaper it will be to give you a pay raise than to bring in another expat!

Today's topic deals with the thorny issue of going into competition with one's employer and what is, and is not allowed. Reminding readers that I am not trying to give legal advice here, if you pick up on some points here and want to know more, the best thing to do is to contact your legal advisor for the full story.

Today we answer another reader letter about the realities of someone at the top of their profession back home considering a move to Japan.

Today we answer a reader letter about whether he is cut out for recruiting.

Reader: I recently turned thirty and have lived in Japan for four and a half years. I snapped out of a dangerously comfortable situation at an "Eikaiwa" (English Teaching) job and uprooted everything to come to Tokyo a couple of months ago. I currently teach a mixture of corporate in-house classes and high-school work. I love teaching and have done it for seven years now in Korea, New Zealand and Japan. However, I know I need to diversify and I really want to try something new. I'm wondering if recruiting might be a viable alternative?

Whenever the US economy hits speed bumps, through bitter experience business people in Japan start battening down the hatches. Such is the business environment now, that is not just hatch battening, but many are also starting to think about retrenchment, both as firers and fired. Today we look at severance packages, and what you should expect.

Probably the biggest consideration for most people in wanting to set up a company is the issue of having the money to pay for it. As I teach in my entrepreneur classes, starting a company with any number of employees will always cost more than you think. In fact, my rule of thumb is to set aside about JPY5m for each person employed, quite apart from the cost of any office move, furniture, tools of the trade, company registration, licenses, etc.

As I have said previously, hiring people can be a tedious process for the new company owner or country manager, not just from the point of view of management but also for the administration work required by the government. Most of this administration is spent assisting the authorities to track and pay levies relating to health, unemployment, pension, accidents, and similar employee benefits.