So do people actually pay that for this boat and then just eat that kind of depreciation?
I could not justify that kind of depreciation for anything in this world.
So back to the OP's opening post.
One has to keep in mind the sorts of folks who spend this kind of money on a boat (or a plane or.....). First of all, there is a good chance--- and this will make Mule very happy--- that the expenses of the boat are being written off, either partly or entirely. So the depreciation might actually be a good thing for some buyers. It can represent a "loss" if the boat is owned by a business or used for a business.
And of course, using a boat for business doesn't mean it actually has to be
used for business, it means that the owner, or more likley his/her/their finance, tax, and legal folks are very clever at figuring out how to make it
appear the boat is being used for business in the eyes of the IRS (in this country).
And.... there's nothing to say that the boat has to even
be in this country even if it is. Most of the really big yachts I see in this region, the kinds with helicopters and stuff on them, are not flying US or Canadian flags.
Now to these folks, a $1.6 million dollar boat like a SeaRay is chump change and is just a present to give to their uncle Boris on his 65th birthday.
But even to the people for whom $1.6 million is a hefty sum, there are all sorts of ways to make that money much easier to spend. Or not spend, as the case may be.
Everything is relative, I think. For some people, a $15,000 trailer fishing boat is a major expense in proportion to their income or savings, and their other expenses--- house, transportation, etc.
For the person for whom a $1.6 million dollar boat is a feasible expense, all the other numbers will be in proportion: income, home(s), transportation, and so on. So they will view that $1.6 million boat the same way the other fellow views a $15,000 trailer boat.
Where it seems wierd is when the person to whom a $60,000 diesel cruiser is a major expense but one he/she can just manage to pull off tries to contemplate buying a $1.6 million boat. Because he or she is going to relate spending that kind of money to what he or she has. It's the only thing they can relate to, right?
If the CEO of the company I work for, for example, decided he wanted a boat of his own for whatever reason, he may very well view buying a $1.6 million boat as a very reasonable cost for the kind of boat he wants. He may even view it as a fairly inexpensive boat, as boats of the type the crowd he moves in tends to buy.
In the same way that I don't hang about with the ski boat or pontoon boat or kayak crowds, the CEO of our company does not hang about with my crowd. So to him, a $1.6 million SeaRay may be the absolute rock-bottom "price" of entry to boating with
his crowd.
It's all relative. I can say, "I'd never buy that kind of boat for that much money and take that kind of depreciation hit." But.... if I was the kind of person to whom that kind or money and depreciation hit was par for the course, it's very likely I woud be a very different kind of person. And
that person might very well view a $1.6 million SeaRay as the coolest boat on the planet.
And I would look with great pity on the people who had to plod around at 8 knots in old, cheap, un-cool diesel cruisers, if I bothered to look on them at all.
And last but not least, people talk about the top one-percent or ten-percent or whatever-percent of wealthy people. Sounds like a small percentage compared to the middle and poor class percentages, right?
But the overall population is a really big number, even bigger when you roll in other countries with a very wealthy class like China, India, Russia, and so forth. So that top one percent or ten percent is actually a hell of a lot of people. Which means SeaRay's market for their high-end boats is actually a very, very large market on a world-wide scale.
Which is why, when we were shooting a job in Xiamen, China a few years ago, a city on the southeast coast of China, there were huge SeaRay billboards all over the place. And not for their runabout-type boats, either, but for their really big ones.
