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Old 04-04-2017, 08:42 PM   #21
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Regardless, don't believe borrowing money for toys is a wise thing, unless the toy will be your only residence. (By the way, California's governor Brown is proposing the elimination of tax deductions for a second home, which for some, is their boat.)

Still, enjoy life.

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Old 04-04-2017, 08:45 PM   #22
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My education and early background was financial so certainly that plays a huge role in how I look at things. I ran companies with budgets and with plans.

We don't obsess over home or boat expenditures, but we do like having an idea of how much we'll probably spend. Nothing stops us from spending more or less. It has nothing to do with what we can afford, just liking to know where money is going, how we're using it. Some aspects are interesting. We've spent less on maintenance than we anticipated and definitely spent less the first few years on fuel. I remember budgeting $4/gallon.

My wife's introduction to accounting all came from me, but she understands financial statements of our business and she likes being able to see where we're spending money personally.

While I personally don't like the idea of assuming debt for recreation (don't really like debt period), I will not go so far as to say one shouldn't. For many that's the only way to get into boating. I will just say they need to look carefully at the total costs and not put themselves into a position that the boat becomes a key part of stress in their lives.

Budgeting and tracking also allows us to make smarter future decisions or to change things positively. Must we budget? No. It's just something we like doing. Staying within a budget isn't critical for us. However, it is for many, especially first time buyers, and I've seen too many people sour quickly on boating over the shock of dollars going out. When purchasing too there are many areas that one can directly impact by decisions they make up front.
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Old 04-04-2017, 09:04 PM   #23
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Originally Posted by ksanders View Post
Why not???

Simple fact is that we are all going to grow old, and we are all going to die.

If you have plenty put away for a nice retirement, why not spend the rest?

We all get this one shot at life, and the old saying is true... You cant take it with you.

So why not put the excess in a boat, or a RV, or spend it on good whiskey, or whatever else you want...
Exactly!
That's why they call it discretionary spending!

I think the point is we all have to somehow figure when we have enough tucked away and how we want to spend the rest on our passions.
We don't need to count every nickel - just have an idea of our comfort level for the discretionary things
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Old 04-05-2017, 06:37 AM   #24
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I know this will piss off a bunch of people but I remember something from Clark Howard's personal finance radio show probably fifteen years ago that stuck with me - about vehicles - "If you can't afford to pay for it in two or three years, you can't afford it". Rapidly depreciating assets should not be leveraged heavily. It is absolutely insane to me folks who spend 10-20% of of their nest egg on something like a boat (or RV)
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While I personally don't like the idea of assuming debt for recreation (don't really like debt period), I will not go so far as to say one shouldn't. For many that's the only way to get into boating. I will just say they need to look carefully at the total costs and not put themselves into a position that the boat becomes a key part of stress in their lives.

Following is heavily influenced by several life events.

Life's too short, and then you die.

We could have saved for maybe 20 years or so, retired, bought the boat, and died the next year.

Financing isn't for everyone, and the eventual over-all cost of a financed boat is... well, I don't wanna look at that number....

But then we didn't want to retire and die the next day, either.

Borrowing to buy a boat isn't financially sound, for many.

But then many retire and die, boatless. Not only boatless, but without several boating years under their belt.

I can't recommend the trade-off; I can only suggest that trade-offs exist, situations differ, and the decision ends up being unique and personal...

-Chris
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Old 04-05-2017, 07:02 AM   #25
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There are so many possibilities for people owning boats that any one set of views is nearsighted.

Buying and living aboard a boat allowed me to keep and make my then current job easier.

It allowed me to stay near where my son lived....

And it allowed me to build back my finances after a terrible stretch and live a great lifestyle. All my rich friends kept telling me I was living the dream while they toiled at work....despite my toiling of reviving a pretty beat up boat....but capable of going to Florida every winter thankfully.

That worked for me in my situation...certainly not for others. If you followed some posters logic...you can see that thinking outside the box isnt there.

But the premise that it needs to be thought through, and many more angles covered that it appears to newbies is certainly valid. How it is accomplished is where even some experienced boaters who have never done it don't get it.
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Old 04-05-2017, 08:10 AM   #26
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Originally Posted by BandB View Post
My education and early background was financial so certainly that plays a huge role in how I look at things. I ran companies with budgets and with plans.

We don't obsess over home or boat expenditures, but we do like having an idea of how much we'll probably spend. Nothing stops us from spending more or less. It has nothing to do with what we can afford, just liking to know where money is going, how we're using it. Some aspects are interesting. We've spent less on maintenance than we anticipated and definitely spent less the first few years on fuel. I remember budgeting $4/gallon.

My wife's introduction to accounting all came from me, but she understands financial statements of our business and she likes being able to see where we're spending money personally.

While I personally don't like the idea of assuming debt for recreation (don't really like debt period), I will not go so far as to say one shouldn't. For many that's the only way to get into boating. I will just say they need to look carefully at the total costs and not put themselves into a position that the boat becomes a key part of stress in their lives.

Budgeting and tracking also allows us to make smarter future decisions or to change things positively. Must we budget? No. It's just something we like doing. Staying within a budget isn't critical for us. However, it is for many, especially first time buyers, and I've seen too many people sour quickly on boating over the shock of dollars going out. When purchasing too there are many areas that one can directly impact by decisions they make up front.
here the same education and working life had a big turnkey projects where the budget is always the responsibility, first to calculate the offer, then build and control the schedule and budget of each and every battle, that the budget to keep. I think the same life in general, and boating. I have never bought on credit cars, boats, etc. toys, rather saved up and bought the money to buy. This strategy worked as well through my life.

I have a boat and the annual budget, it must have been pretty well as long as I can remember (over 10) For several years, the budget remained unused and transfer it for future years, for this reason I can buy new if someone breaks down and I can stay in my budget
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Old 04-05-2017, 08:28 AM   #27
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Originally Posted by psneeld View Post
There are so many possibilities for people owning boats that any one set of views is nearsighted.

Buying and living aboard a boat allowed me to keep and make my then current job easier.

It allowed me to stay near where my son lived....

And it allowed me to build back my finances after a terrible stretch and live a great lifestyle. All my rich friends kept telling me I was living the dream while they toiled at work....despite my toiling of reviving a pretty beat up boat....but capable of going to Florida every winter thankfully.

That worked for me in my situation...certainly not for others. If you followed some posters logic...you can see that thinking outside the box isnt there.

But the premise that it needs to be thought through, and many more angles covered that it appears to newbies is certainly valid. How it is accomplished is where even some experienced boaters who have never done it don't get it.
nicely stated.
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Old 04-05-2017, 08:33 AM   #28
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Many of us budget for the important things in life: our house, our retirement, our kids education, our vehicles, so why not our boats?

With a low interest rate, there is nothing wrong with financing. The key is to never be underwater on the loan, so that you can sell the item if your situation changes. Bought my last vehicle (RAM 1500) four years ago for 24% off the MSRP. With 1.9% financing, I stretched out the loan for six years. Could have gone with a shorter loan, but with a kid in college made more sense to bank the money for her college expenses.

I get a kick out of financial advisors who say in order to maximize your retirement income, you should work until you turn 70. What bupkis. You should retire when you are financially comfortable to do so. Personally while I'm eligible to retire now, I'll reach that comfort point when I turn 62.

With our last house payment coming up this year and our daughter graduating for college next month, I'm beginning to plan for our new (to us) boat. Estimating all the boating costs, will help decide how much money we can spend up front for the boat.

In 1988, my Dad bought a very nice 2 year old sailboat. We guess the boat was used about six times and then the owner defaulted on the loan and the boat went back to the bank. We believe that the boat went back to the bank because the owner could not afford to keep her. Likely scenario was that the owner went to the boat show, was smitten by the boat and believed the salesmen when he told them the boat would cost x dollars a month. While it did cost x dollars per month for the boat, it also cost y dollars per month to keep her.

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Old 04-05-2017, 10:11 AM   #29
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Thanks BandB, you've reminded me to add a few items to my spreadsheet. For my wife and I, budgeting the Capex and 1 year Opex is critical since we're not financing and we don't like being ignorant of our savings and cash flow.
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Old 04-05-2017, 12:42 PM   #30
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Have never budgeted for any boats I have owned, and probably never will. I went thru your list as it pertains to my newly purchased boat and stopped at $80k outside of purchase price If I had numbers like that in front of me before I thought about doing what I'm doing. . .I wouldn't have done what I have done

To be fair though, some of that list is "budget" and some of it strikes me as "crap hitting the fan" expensive stuff breaking.

When I went boat shopping, I had an idea of what some of the major maintenance items were, some upgrades I wanted to do, and had the costs in the back of my head of a couple expensive items that might need to be replaced. I'm used to spending on dockage and insurance for my sailboat, so that's basically factored in since it is a minor increase. But that's it

But on the other hand, since I live on my boat, I don't have to split my boat money out of housing/mortgage/rent money for a land based dwelling. There is more discretionary spending available at the end of the month for me, so it doesn't hurt as much if if something comes up
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Old 04-05-2017, 01:07 PM   #31
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Each person finds their own way to make things work. The point is to go into it with an understanding of what you're getting into and a plan to make it work for you. There's not a right or wrong way except the risk of not knowing being prepared for what one is doing. There are no magic formulas or one size fits all answers. It's like the rest of life. A couple mentioned retirement. We always had it in mind so when we could, we did for the most part. However, I know people who their job is their hobby, they enjoy it more than anything else in the world and they'll work forever. Probably the most dramatic example I'd point out is Warren Buffett. He doesn't work for the money. He'll never retire.
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Old 04-05-2017, 01:36 PM   #32
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Agree there are a lot ofdifferent ways to make it work...I do however believe there is a wrong way!
We have friends that have owned 5 boats...always bought new and financed. Never having paid obe offthey always rolled over the (upside down) balance. 4 of the 5 were Tiaras.. They had good taste!
At one point wanted to get out of boating but couldn't sell and pay it off.
They can't pay for vacation cruises so put it all on plastic and worry about it later..
Usually end up withdrawing from 401k or IRA to eventually pay off the cards.
Not knowing or caring about true costs is OK if it doesn't create a problem but head in the sand when you clearly can't afford it is a problem...at least in my book.
Lots of ways to get on the wayer qnd enjoy the good life w/o having the biggest, newest, and most expensive boat in the marina.
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Old 04-05-2017, 02:19 PM   #33
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I agree generally that its best not to leverage/borrow to purchase these toys - especially if buying new. We are currently looking at boats to purchase one (been boatless for a while now). Plan is to get a fully depreciated mid/late 80's Taiwan trawler, keep it in Columbus,MS on the Tenn Tom Waterway. That's about two hrs from our home. From there we plan to cruise the TN River and other inland rivers, maybe go down to the coast. And then do the Loop for a year or two. We will not be full time liveaboards. Plan is to then sell the boat after 4-5 yrs. So my plan is to put down 10-20% and finance the rest - I have plenty of low cost credit available. I could pay cash, but I can borrow at 4-5%, and I'm earning much more than that via investments. I know I'll probably take a haircut when selling - but maybe not - I'm pretty handy re woodworking/mechanical/elec and will be able to make improvements. But a brokers fee will probably eat that up. As long as you are disciplined, leverage can work well.
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Old 04-05-2017, 03:06 PM   #34
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but I can borrow at 4-5%, and I'm earning much more than that via investments.
Don't bet too heavily on that continuing to be possible. Over the long term it has generally been but there are repeatedly significant periods where it isn't likely. For many years now, we've been able to earn more, but I never bet on that to happen the next five or next ten years.
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Old 04-05-2017, 03:22 PM   #35
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BB - point well taken. But we are not talking about really big money here - boats we've seen that would work well for us - 40' TT's - sell for $55-80k. I can get 5-7 yr fixed loans at those rates, but you are correct that the investment returns are not guaranteed - except for some older, higher rate bonds I still hold
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Old 04-05-2017, 06:08 PM   #36
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It is amazing how much one can save for some months or several years what one would otherwise spend to accommodate/maintain a boat previously acquired. If one isn't able to do this, one can't cover ownership costs of the boat in question.
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Old 04-05-2017, 07:01 PM   #37
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I find it amusing that that folks will stand up on a soap box and tell others that they should never finance something as expensive as a boat.

I have no problem admitting that I financed our boat. Heck it cost way more than my house, and I wasn't ashamed that I had to finance that.

Yes I could have saved dilligently through my 50's and bought the boat with cash right before my planned retirtement.

Instead I have been enjoying, and improving the boat for five wonderful seasons. In four more seasons I will have it paid off and will have had a fantastic time using the boat all those years I could have been saving, and dreaming of someday owning a boat this size.

Instead of "keyboard cruising" my wife and I have been actually cruising, having spent over 60 nights aboard last season alone.

Frankly thats allot funner than checking my bank balance, hoping for "someday". Sitting behind my keyboard while others go to sea.

Nope, no regrets at all.
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Old 04-05-2017, 07:02 PM   #38
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I second "You can't take it with you"
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Old 04-05-2017, 07:28 PM   #39
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"Have never budgeted for any boats I have owned, and probably never will. I went thru your list as it pertains to my newly purchased boat and stopped at $80k outside of purchase price If I had numbers like that in front of me before I thought about doing what I'm doing. . .I wouldn't have done what I have done "


Cool Beans - How could that possibly be? We have followed you on the other site thru your purchase and saw no evidence that it would be anywhere near that amount.
What the heck happened?
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Old 04-05-2017, 07:47 PM   #40
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I chuckle at the house is different than a boat and ok to finance comments. You finance a house in most cases because you don't want what you can afford. So you finance what you want, not what you need.

For those that will say, "the house appreciates and the boat depreciates", you will do far better buying a small house and investing the monthly mortgage, than the appreciation over time of the house. So, do what works for you. For the record, I didn't finance mine.

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