84 months of costs to live/use the boat

[mvweebles]

The only real reason to me of maintaining a land house while cruising is that you truly are planning to stay there. I sold my last land house when I started cruising 7+ years ago and put the money in a balanced account and it has made way more than the amount the house would have appreciated, not even counting the cost to maintain the house. Now I have that money and the price of my planned replacement house is less that what I sold the last for.

Sometimes people who learned we didn't have a land house would said "Don't want a place to return to after cruising?" I would respond "No, it turns out there are houses for sale everywhere I go and I can get one when the time comes."

A healthy perspective. But I have met several folks who sold everything and didn't save. Now elderly, they are struggling aboard. One fellow although healthy at the ripe age of 84, said he had simply aged out of sailing. Financially, he was stuck. I know, personal choices, but still, it can be very difficult to re-enter a housing market as your income stagnates while markets increase.

We view our current cruise as a lazy delivery. A couple years but focus on getting Weebles to Florida where we can make multi-month trips to Bahamas, Mexico, parts of the Loop. If we wanted to truly cruise, we'd buy a different boat with more waterline. But that's not our goal.

Costs Don has posted over the years on CF have been very helpful. I really appreciate the generosity in his sharing and will miss his contributions if he does exit the forums along with boating.

Thanks Don.

Peter

 

[ABfish]

For what it's worth, owning a home is not a path to wealth in all communities. My hometown had a 10-year period of stagnant home values in the mid-2000's. And my house has a carrying cost of 2% (taxes, insurance, yard maintenance) plus another 2% average in maintenance and repairs.

I look at a house as a forced savings account for many people who lack the discipline to invest otherwise, and there are lots of intangible benefits of homeownership. But it's not always the best place to park a bunch of money.

 

[Don L]

Doesn't matter where you park your money if you are just money stupid. We retired at 56&55 and full timed on the boat for over 7 years. According to some forum posters we have spent way too much money during our cruising years. But

We have more more total assets now than when we started and that doesn't count the boat (I have always counted the boat as $0)

 

[PierreR]

Doesn't matter where you park your money if you are just money stupid. We retired at 56&55 and full timed on the boat for over 7 years. According to some forum posters we have spent way too much money during our cruising years. But

We have more more total assets now than when we started and that doesn't count the boat (I have always counted the boat as $0)

You never know what the future will bring and when. If you notice, my costs above are already high in comparison to what others are posting. We are in our sixties and already experiencing increased costs due to disability. We could have paid 10 times more for a boat but did not. We can afford to loose this boat.

My wife can only negotiate an 8" step without overlap. That necessitated a boat and size that would accommodate stair cases without overlaps stepping. An increase in expenses. My wife cannot get into a dingy or out of a dinghy without great difficulty. That means marina's, preferably with ADA features, every time we go ashore together. That raises the costs considerably and is the reason for the high cruising budget. We seldom eat out and the cruising budget is still high.

We have a high likelihood of a significant NO-GO period of time near end of life. My wife has not retired yet, I am still pushing her to retire. Our financial planner says we can spend at our current COL adjusted, before retirement rate till age 100 and still end up with a higher net worth. My wife feels useful with her job but we are running the clock forward.

When we really get out there cruising next year, we might very well find a boat that meets the requirement far better than our current boat. In the mean time I have my retirement/hobby job with this boat.

Our current dirt home is not the home we want going forward.

 

[dannc]

For what it's worth, owning a home is not a path to wealth in all communities. My hometown had a 10-year period of stagnant home values in the mid-2000's. And my house has a carrying cost of 2% (taxes, insurance, yard maintenance) plus another 2% average in maintenance and repairs.

I look at a house as a forced savings account for many people who lack the discipline to invest otherwise, and there are lots of intangible benefits of homeownership. But it's not always the best place to park a bunch of money.

I agree. Some places have no or little price increases and others are going down in price.

Just went and looked at the home I used to own and it's price, according to Zillow, would be over 2.5 times what I sold it for decades ago. Sounds impressive but if the money had been in the stock market, earning historical averages, we would have 7 times as much money. :lol:

AND that is in an area that is doing well market wise and will do so for the foreseeable future.

Course, one has to LIVE somewhere so there is a cost to shelter that has to factor into the equation, and given the area rents, the house mortgage is, or should be, the better investment.

Looking at our current house, the numbers are similar though I think the prices are starting to accelerate.

 

[Slider70]

First off, I own a boat. I own a home. I own the boat to cruise with which we do about five to six months yearly. In Canada my home, so far, has appreciated in value. My boat has depreciated. Given a free choice I would like to live fulltime on a 50' boat, my partner not so much. Hence, we own a home plus a 38' boat.

Further, no matter what the costs are to live aboard, in B.C. it is getting extremely difficult to fine a marina that allows new live aboards. (Heck, it is even hard to find a marina that has space for a new, larger full year berth for a vessel.) In 2023, I know of four larger marinas that have served notice to no longer allow live aboard vessels. They gave those presently there nine months notice to vacate the live aboard aspect of their vessel usage. Only one of those marinas still allowed a few live aboards that have been grandfathered but with no option to re-sell this privilege.

My point here is costs are one consideration but a far bigger one is finding a marina that will allow you to live aboard right now and into the foreseeable future?

 

[Mambo42]

I have enjoyed the YouTube channel called "In Too Deep". Very realistic view of what it takes to acquire and refit an older boat. He does not talk too much about actual cost but you can see that despite some very significant sweat labor he is pumping a lot of cash into the boat. He is an incredibly industrious young man who has a passion and drive that is not so common.

I have great respect for him, the things he is capable of doing and the energy with which he does it............just incredible. He admits he is putting in a lot of money, but it is money he earns first and then spends.
When I see his videos I can only wish I still had the ability and energy he has, it would make my life so much easier. Now I have to deal with so called mechanics that basically have no clue what the hell they are doing.

 

[a_real_journey]

Thanks, Don (and others) for sharing about your costs and financial/property decisions along the way. I’m a boatless dreamer right now, but I read these forums with interest (especially in February in MN when it’s zero degrees outside).

This thread is mainly about costs of ownership/operation, but there’s been a fair bit of conversation about financing the dream. I sit down (in my cold living room) and run numbers on my ideal boat as a hobby. Here’s one of the things I’ve found, and I thought I’d pass it along for anyone interested:

I’m not exactly old, but AARP started sending me literature last year. For about the past 15 years, I’ve put a sizeable bit of money into a whole life account. (When I say “whole life policy” some people grow apoplectic with rage and assure me it is a terrible idea. If this describes you, don’t keep reading this post :- )

If there are any readers here in the around-40 crowd dreaming about a boat someday, this could be one way to finance (in whole or part) the boat you’d like to have without having to trade in your dirt home or divert your retirement savings too much.

I am not in the insurance industry, btw. This is not a commercial. Just one guy’s efforts to live wisely. Here’s how I’d describe my strategy:
I am “investing” enough into a whole life policy that I accrue some significant cash value. That being done, I’ll be able to take out an unstructured loan from the life insurance company against the cash value of the policy. (You are technically borrowing from the company that holds your contract, using your policy’s cash value as collateral for the loan.) Since you haven’t taken your own money out of the policy, its entire value continues to grow apace (for me it’s been a 4.5-6.25% over 15 years). If you don’t pay the loan + interest off, the death benefit of the policy is reduced accordingly if you die. (Very important little caveat, there.) So, it’s wise to have a plan and the means to make interest payments regularly and pay the principal back eventually (e.g. when you sell the boat).

This is not a strategy for everyone. Some people will rage at the idea of a whole life policy. They should not get one. Others are not in good enough health to obtain favorable terms. Others will find their combination of age + discretionary income makes funding a policy unattractive.

For me, it’s been a good option. I followed the counsel of a trusted advisor in my early 40’s. He encouraged me to consider the “living benefits” of the cash value, not just the death benefit on the policy. It’s been a good approach for me.

I have money in a dirt home, 401(k), Roth IRA, HSA, etc. My wife and I have been pretty frugal and lived within our means. We’ve also had one windfall that pushed us father ahead that careful planning could have. The whole life policy is one part of an overall financial strategy, but it’s one that makes buying a boat more feasible.

Just thought I’d share this for any who are at the front end of asking: “How am I going to afford the boat, even if I could afford the living expenses?” Hope I haven’t steered the conversation too hard to starboard. I’m grateful for this forum. Helps me dream.

 

[Don L]

I feel if you run the numbers you will find out that by far it would be better to get a term life insurance plan and invest the other in a real investment method than it is to do a whole life.

BTW I am now on month 101 of tracking. The last year plus has been land living instead of the boat. What I am finding is it costs us the same.

 

[tiltrider1]

Investing is like boats. There is no one answer for everyone. What’s right for you depends on so many factors as does the right boat for you.

 

[Don L]

I don't disagree and have no interest in telling people what to do with their money. Yet in this case I believe a simple search about whole life will provide some answers. I of course could be wrong

 

[mvweebles]

I appreciate @a_real_journey post about using life insurance as a savings mechanism to fund a future bucket list item. I don't agree with it nor would I recommend it, but he was very articulate about how he understands the criticism yet it works for his situation. Accepting long term financial responsibility and risk is a very personal decision. He seemed to have thought through it and arrived at a balance that works for him. Cannot ask for more.

I remember when I was young and recently infected with the cruising bug. I asked a broker how people paid for their boat purchases. I was stunned that many pay cash. The idea of shelling out that type of money without a loan was unfathomable to me. Alternative solutions such as @a_real_journey laid out may bait the pundits, but is a possible path for some.

Peter

 

[a_real_journey]

I appreciate @a_real_journey post about using life insurance as a savings mechanism to fund a future bucket list item. I don't agree with it nor would I recommend it, but he was very articulate about how he understands the criticism yet it works for his situation. Accepting long term financial responsibility and risk is a very personal decision. He seemed to have thought through it and arrived at a balance that works for him. Cannot ask for more.

I remember when I was young and recently infected with the cruising bug. I asked a broker how people paid for their boat purchases. I was stunned that many pay cash. The idea of shelling out that type of money without a loan was unfathomable to me. Alternative solutions such as @a_real_journey laid out may bait the pundits, but is a possible path for some.

Peter

Thanks for that generous response @mvweebles and @Don L. I agree with you that most people should steer clear of Whole Life products, if for no other reason than they are poorly understood. They can also be a financial sinkhole for individuals and a true gift to insurance companies.

Like Don said, the best approach, bar-none, is to "buy term and invest the rest." I have followed this advice myself. I have a substantial term life policy, and part of "investing the rest" includes a whole life policy. The main attraction for me is the prospect of taking out an unstructured loan well before retirement to purchase a boat. There's more than one way to skin that cat, though. I suppose most people on this forum have found a way (and an expensive whole life policy didn't figure into the equation for 99.9% of them).

 

[Sig Machi]

So I will be getting out of boating and going to dirt soon. Part of that is understanding how much I can spend on dirt living so I am comparing it to boat living. I am on month 89, but am going to use the first 7 full years as a basis. I figure I know how we lived during that 7 years and if we spend the same amount on our dirt dwelling we basically live the same.

So for 7 years the cost of boat maintenance, repair, upgrades plus fuel, marina, electric, registration, and insurance works out to an average of:

$1399.62/mo

If I factor in the purchase cost of the boat less the agreed value I expect the insurance is going to payout it becomes:

$2054.38/mo

BTW this is for a 41' sailboat. I have done the estimate in past a estimate that for a trawler getting 2mpg the cost is $1500-2000/yr more

Thought maybe those currently living on land and thinking of switching to boat living might find it of use.

Thank you for Your posting!

 

[Sig Machi]

Thanks for that generous response @mvweebles and @Don L. I agree with you that most people should steer clear of Whole Life products, if for no other reason than they are poorly understood. They can also be a financial sinkhole for individuals and a true gift to insurance companies.

Like Don said, the best approach, bar-none, is to "buy term and invest the rest." I have followed this advice myself. I have a substantial term life policy, and part of "investing the rest" includes a whole life policy. The main attraction for me is the prospect of taking out an unstructured loan well before retirement to purchase a boat. There's more than one way to skin that cat, though. I suppose most people on this forum have found a way (and an expensive whole life policy didn't figure into the equation for 99.9% of them).

I appreciate the postings on this subject very much. BTW--if you are an AAA member (American Automobile Association- Not AA) they have a very reasonable rate structure for whole life insurance policies...

 

[psneeld]

I invested in whole life when very young and inexperienced.
It actually wasn't too bad all things considered.... till I had a situation where I borrowed against it.
The whole story is ugly about real estate and a marriage going bad during the 2009 financial crisis.
Even though I thought I was escaping with only bumps and brises....when I went to close out the whole life, I found out that because I had borrowed against the cash value to the point where I owed $20,000+ for the years the total amount didn't cover the insurance as "paid up". That was a bad bruise at the wrong time.
So it was because I didn't understand the 30 pages of fine print that these "deals" come with and while the general idea of a whole life policy isn't bad for everyone, it is if you don't understand all the details.
Plus I quickly found out that Warren Buffet was right about investing and followed his recommended strategy...unfortunately I was too late to invest in him directly.

 

[ABfish]

Thanks to @a_real_journey for posting his strategy. I'll need to noodle over that for a while.