What is a responsible percentage of net worth to have in a trawler/yacht?

[psneeld]

Starting to get a bit off topic...but still a bit relevant.

Anyone fearing that they may never experience good cruising before they cash in......

Buy the cheapest, decent boat with your minimal list of necessities that can cover the waters you are interested in and go do it. If retired, no issues. If still working, then cruise in chunks. Lots of people have done it both ways.

If you love it all after the first couple major cruises or a loop, you will have a better idea of your finances and your cruising likes/dislikes. Go from there.

My 2 closest friends have always been jealous of my cruising life, constantly saying I am living the dream and they wished it too. My start was a matter of finances and work. I had a seasonal job and just enough money to barely afford a cheap trawler and a pension that allowed me to snowbird on a shoestring.

So if you minimize expenses up front and early cruising years,, you can usually keep saving and investing (like I did) to get to the point where you can upgrade and expand you cruising dreams.

Unless you have decades of cruising and think you will pick the perfect boat first go around, maybe even the second, you are way short on experience or one of the lucky ones. For every ten that claim to be one of the lucky (smart) ones..... maybe believe one of them.

 

[Jeff F]

Is it better to stretch the budget into something that will hold value or better to just spend less up front and only buy the minimum you need for immediate crusing plans?

The idea that by spending more you somehow guarantee higher % residual values is a bit of a fallacy, I think.

It's hard to imagine a good financial case for buying beyond minimum needs for immediate cruising plans. I've been happily living aboard and looping on boats that meet my needs quite nicely, and were purchased and equipped for well under $100k. I can comfortably absorb a 10-15% annual depreciation in my five-year budget, as well as the lost earnings on capital.

I agree that % of net worth isn't the best metric. When I was younger I had super expensive boats relative to income and assets. Now I'm retired and by necessity more conservative in looking at financial risk.

 

[l00smarble]

The idea that by spending more you somehow guarantee higher % residual values is a bit of a fallacy, I think.

It's hard to imagine a good financial case for buying beyond minimum needs for immediate cruising plans. I've been happily living aboard and looping on boats that meet my needs quite nicely, and were purchased and equipped for well under $100k. I can comfortably absorb a 10-15% annual depreciation in my five-year budget, as well as the lost earnings on capital.

I agree that % of net worth isn't the best metric. When I was younger I had super expensive boats relative to income and assets. Now I'm retired and by necessity more conservative in looking at financial risk.

Not disagreeing with you but to play devil's advocate:

If one plans to own a boat for 2 years lets say. If one bought a $100K boat depreciating 15% per year that is $100,000 - ($100,000*.85*.85) = $27,750 "spent" on depreciation.

Hypothetically if one found a $300,00 boat that only depreciated 5% per year it would cost $300,000 - ($300,000*.95*.95) = $29,250 spent on depreciation

The difference is negligible and one would hopefully be in a much more comfortable boat for the cruise if the purchase budget is 3x. (yes, yes....I hear you guys typing already....I know the 3x price boat will likely require higher expenses to own and run.)

3x might be an extreme example but I'm sure I can find real 2x examples of purchase choices that could result in same depreciation with two boats, one double the cost of the other.

Obviously the 3x example is perhaps exagerated but it points to the concept I am contemplating. I don't mind "parking" part of the nest egg in a depreciating, but comparatively stable asset if all the financial planning is done to allow this safely.

 

[socalrider]

When you get into higher cost boats you really need to consider opportunity cost of capital as well. If you assume, say, 7% your $$ could be making in the market you're weighting against the more expensive boat again.

Depreciation in a boat is hard to figure. On a 20yo vessel it's basically zero. If you bought a brand new vessel in 2018 and sold it in 2023, you might find that you sold it for more than the purchase price. Very hard to say, but I've heard that boat prices are currently dropping fast.

I think rather than artificially guessing at a depreciation %, you'd be better off figuring:

1. Actual cost to keep the boat in its post-sale condition or better (real cash out of pocket including a major maintenance reserve), plus
2. Opportunity cost of capital, plus
3. Exit scenarios (good/bad/mid) or something like that

You could spreadsheet out a few candidate boats across a spectrum of size and price to see where you land.

The compounded opportunity cost of capital over 5yrs on a $1m boat at 7.5% is close to $500k!

Per the OP's earlier comment this is not to dissuade anyone from spending $$ on a boat! Just that one needs to go into it eyes wide open. I'm all for YOLO but you can YOLO pretty damned near as well on a $100k boat as you can on a $1m boat. We'd all take the latter if we had the choice but again you don't want that dream to turn into a nightmare and have to do something horrible like *shudder* go back to work!

 

[CharlieO.]

I am definitely at the lower end of the net worth demographic of this forum. I've said it before and I will say it again. I figured if we are going to be poor we might as well be poor with a boat.

 

[SteveK]

Congratulations on retiring! I’m always intrigued when someone on this forum starts relating their age to their ability to boat. What makes it harder for you in the last year? Is it the boat or you? I want to extend this lifestyle as long as possible. I’m thinking the robots will help with the washing, waxing, and maintenance in the future, so just need to make it that long.

I seem to be less in balance, harder to get up after kneeling down to get something done, so slower more thoughtful movements, instead of jumping/twisting at will.
Operating the boat has not changed.
What was the question?

 

[Uisce Beo]

Recently saw something, hope it wasn’t on this thread!, that stuck with me. And possibly relevant, I don’t know.

If your dreams don’t scare you a little, are they big enough?

 

[SteveK]

Mentioned again that those of you that have had a boat for more than say 10 years appear not to see any depreciation, it seems those of us selling in less time see depreciated value and/or in my case I buy high and sell low.

 

[Mac2]

I seem to be less in balance, harder to get up after kneeling down to get something done, so slower more thoughtful movements, instead of jumping/twisting at will.
Operating the boat has not changed.
What was the question?

You answered it. If it was a boat thing, then maybe a smaller boat would help. If it’s a physical thing, then it’s going to be specific to each person. Im always getting asked about how long I plan on cruising. I always say “as long as possible”

 

[Pprior]

Not disagreeing with you but to play devil's advocate:

If one plans to own a boat for 2 years lets say. If one bought a $100K boat depreciating 15% per year that is $100,000 - ($100,000*.85*.85) = $27,750 "spent" on depreciation.

Hypothetically if one found a $300,00 boat that only depreciated 5% per year it would cost $300,000 - ($300,000*.95*.95) = $29,250 spent on depreciation

The difference is negligible and one would hopefully be in a much more comfortable boat for the cruise if the purchase budget is 3x. (yes, yes....I hear you guys typing already....I know the 3x price boat will likely require higher expenses to own and run.)

3x might be an extreme example but I'm sure I can find real 2x examples of purchase choices that could result in same depreciation with two boats, one double the cost of the other.

Obviously the 3x example is perhaps exagerated but it points to the concept I am contemplating. I don't mind "parking" part of the nest egg in a depreciating, but comparatively stable asset if all the financial planning is done to allow this safely.

You are omitting the opportunity cost of the extra $200K as well. If that remained invested you would be raking in extra income, which you will not instead spend on extra insurance, etc. So the swing is wider, in fact the opportunity cost is probably more than the depreciation costs.

 

[Marco Flamingo]

My financial calculation was made way back. Dad was amazed to learn how much his "slacker" son was making. Not "swimming pools and movie stars," but an office looking down on Seattle and a computer right on my desk!

One day I did a search on the world wide web for "when to retire." Lots of calculations on home appreciation, investment accounts, medical costs, post retirement travel, etc., etc. Even how often I would buy a new car. I put in rosey numbers and found I could retire at 64 and park my Mercedes right on the yacht moored in front of my mansion (when I wasn't cruising the world).

Then I put financial numbers like my Grandpa experienced. Depression numbers. After getting through the depression, he learned that his retirement account at the mill didn't really exist. His "retirement" was working as a night janitor.

My depression numbers were similar. What if things didn't go rosey? Real estate recession, stock market crash. I could retire at 64, drive a nice car, have a nice boat, travel as I wanted, as long as I died by age 66, because I'd be broke.

I retired the next year. There's more to life (and death) than percentage of net worth. I had more things I wanted to do than things I wanted to own. Others have hinted in this thread about the Grim Reaper. I saw him on my computer screen.

 

[cfr]

I can tell about my experience. I retired with 50, bought a boat of 100 k and invested 50. I sold my house and put it into a conservative investment calc with 3 pct roi. I calculated for 20 years to zero because i will inherit a little bit sometime. After now 12 years its still working. 70 pct is left of the invest and we lived 6 month on board and 6 month in a rented app in the mountain. so do your calculation..

 

[SteveK]

I can tell about my experience. I retired with 50, bought a boat of 100 k and invested 50. I sold my house and put it into a conservative investment calc with 3 pct roi. I calculated for 20 years to zero because i will inherit a little bit sometime. After now 12 years its still working. 70 pct is left of the invest and we lived 6 month on board and 6 month in a rented app in the mountain. so do your calculation..

Lot of information. I could do the calc if I knew the average annual expenses that used up 30% of your savings/investments.
For now I will guess at 7%

 

[DDW]

Several here have recommended cash only. I think that is arguable. Boat loans are actually quite cheap right now, less than real estate in this area anyway. 20 year boat loan at 6.5%, 20 year home loan is 7%+. S&P returns over the last 80 years have averaged better than that, over the last 20 much better. Of course getting a 90% loan to value on a boat has some risk, as market conditions may degrade its value at the point you want to sell, and very likely the stock market will follow (or is the cause of) that trend, the two "investments" tend to track a bit.

Still, selling a bunch of stock or a house to put cash in a boat has tax and other consequences making the answer not so clear. There is a very good argument for buying on credit.

 

[Jeff F]

My view is that cash or credit isn't really a material factor in the total cost of ownership. A realistic budget has to include cost of capital, whether it's interest costs or lost interest income.

Not disputing arguments either way, just saying it doesn't really matter in terms of cost of ownership.

 

[FWT]

Cash or credit is hugely personal and depends on your entire financial picture.

To me no rate today is cheap enough to use it.

But.

A few years ago I bought a new truck. Went in to pay cash. But when they offered 2% loan I went that way. Maybe I should have taken the 7-8 years offer but instead said nah, just make it 4 years.

 

[kapnd]

I am definitely at the lower end of the net worth demographic of this forum. I've said it before and I will say it again. I figured if we are going to be poor we might as well be poor with a boat.

X 2!
I’m retired, but still work side jobs so that money spent on the boat does not come out of retirement funds.
Buying a boat is like a trip to the casino—don’t invest more than you can afford to loose!

 

[BevinB]

I read somewhere years ago that when buying a boat you should budget for 10% of your wealth. But in the end it’s just another opinion. As for running costs the rule of thumb I was told is $1,000.00 (or one boat buck) per foot per annum all in. Which if I’m totally honest with myself isn’t not too far off the mark.

 

[Still Boating]

The best advice I received was to get the smallest boat you can be comfortable on, and consider it an expense. I see a lot of loopers with boats large and extravagant compared to mine, and the owners are no happier than we are.
Our boat is too old to depreciate, there's little I can't fix, it uses 4 litres at 6.3 knots an hour and the opportunity cost of 1 1/2% of my net worth is not material.
VEQT and chill. The liquidity positions I keep cost more returns than my boating cost by a large margin.
I spend 4 months a year cruising at a boating specific cost comparable to my unoccupied slip cost.
I prefer the admiral's cooking to restaurants, and we usually anchor.
It's not a common strategy. I know that because over the last 3-4/years I haven't seen anyone else doing it.

 

[Stevecman]

Lots of good advice regarding long and short term financial planning is already in the comments.

Here’s a real life example of buying an older quality boat

2006 Nordic Tug 42
Age and status of owners: mid-70s and retired.
Location: PNW

Purchase price in 2020: $430K
Market Value 2025: around $400K after sales commission
Cost of upgrades and updates: 2020-2025: $150K
Annual fixed costs for moorage, insurance, maintenance $50K
Depreciation: $430k purchase + $150K upgrades = $580K cost minus 2025 market value ($400k) = $180K “depreciation”
Approximate boat value to net worth percentage : 15%

 

[PhilPB]

I have never considered a boat as an investment. Buying the boatslip in my area on the other hand was.

 

[dannc]

Travel via boat or RV can be less expensive I suppose. We had a blast putting 35k miles on our camper van but it wasn't a cheap way to travel. We enjoyed the lifestyle but to be honest, driving our car and staying in a Hilton Garden Inn is cheaper, faster, and nice in its own way. Same with a boat - even a very modest and efficient boat such as our 1970 Willard 36, which is our magic carpet. We love the lifestyle and find it to be a good value for us. But "economical" is not a word found on our list of adjectives describing our boat or our lifestyle.

Peter

I don't think "economical" is the word I would use for travel by boat, or RV, for that matter. But it could be depending on circumstances. Over the years, we have looked at getting an RV, but after looking at costs and how much time we would have to travel, it just made more sense to drive and stay at a hotel.

The point I was trying to make up thread about these boating expense discussions, is that in the end, after the number crunching is done, what one is paying for is the experience, life style, travel, whatever, so if one can afford the expense, is what one is spending, worth the amount spent?

We have spent quite a bit of our vacation time and money traveling to visit boat builders, boats, classes, and actually being on boats. It was worth every danged penny. Some of the best things we have done have been on or because of boats.

Traveling by boat is the idea/plan and while this would not be cheap by any means, spending the time we would like in other countries, has it's own expense challenges. In fact, travel we did just a few years ago is getting more challenging and expensive due to housing and other issues in countries we have stayed. One has to look at the detail and costs and see if if all makes sense for them after all of the bean counting is done. And one should be counting the beans.

 

[JUG]

As a new trawler owner, getting the vessel to a high operating standard is my goal. Where mechanical failure is not the norm. However, “Feel”, knowing your vessel is critical to your success.
A mechanical machine is only as good as the weakest link.
January of 2025 I bought a 2002 64’ Grand Banks, 6,600 hours, and a 3” thick book of receipts spent on upkeep over its life.
Prior to selling to me, the seller spent 8 months in a marina rehabbing various stuff to get it on market, spent over $250,000.
Then I bought it, and spent 5 more months fixing many known and “just happened” failures to repair. A total $ of $275,000.
Then June 3 left Jacksonville, FL 70 hours open ocean 50 miles offshore straight to Atlantic City, took on fuel, checked everything, and starboard transmission when in neutral slipping forward. Made the call to rent a slip and fix.
Lost a month, fixing transmission correctly, and in two days hopefully moving vessel north for the rest of 2025 major repair free.

My advice is spend what you can afford, while getting the boat to the highest/safest standard for transit. That final total $ amount is your answer. And from boat to boat, a complete crap shoot.

 

[Don L]

I bought the sailboat that I cruised full time for 7.5 years for $115k. Owned it for 12 year and got $85k out of it when selling. But that was a combination of a insurance pay out after a crash, selling watermaker and dinghy, and selling boat based on the damage in 4 days because I priced correctly.

But in the time I had the boat I counted the asset as $0

BTW - I have a cruiser friend with a 57' Nordhaven he has be trying to sell for 3 years. To me an asset you can not sell fast isn't much of an asset

 

[Delta Riverat]

Yeah and it's not worth what you think it is either, only what someone else is willing to pay.

Proven by your friend with the Nordhaven

 

[H2O_Doc]

Nordhavn is a great boat but a lousy looper. You have more research to do.

Yes Nordhavns hold their value but require a LOT of maintenance to keep them sellable. Don't get me wrong - I'm a big fan of Nordhavn. But they are deep-ish draft, tall, and have lousy interior ventilation - all lousy attributes for the Loop. The wing engine is a bauble. I know, I know - "if they can cross an ocean they can do the loop." Sure, but it's far down the list for loopers.

In my opinion, you really need to dream-the-dream on what you want your life to look like, then select the boat that ticks the boxes.

Good luck -

Peter

Peter - can you elaborate on why a Nordhavn would be a lousy looper? Serious question. Nordhavn (in my perception) is the pinnacle of trawlers. It seems to be our dream boat. Probably out of our budget, however.

 

[mvweebles]

Peter - can you elaborate on why a Nordhavn would be a lousy looper? Serious question. Nordhavn (in my perception) is the pinnacle of trawlers. It seems to be our dream boat. Probably out of our budget, however.

I like Nordhavn a lot. I like the fit and finish, I like the way they're laid out, I generally like the equipment selections and installations. But every boat has a yardstick that was their benchmark for achievement when conceived and executed. The Great Loop was not the yardstick for designing a Nordhavn.

First. They are too tall ("air draft") to complete The Loop. Second, most have tiny cockpits so not a lot of great outdoor social space. Third, they are a bit on the deeper draft side (though protected running gear is a bonus). Fourth, they are way over equipped for The Loop where many probably do fine with no radar let alone two and 3x PC screens or stabilizers. And finally, they don't have great natural ventilation because the windows are solid for offshore work.

Nordhavn are exceptional boats and excel when running long distances in open water. But I think a lot of people buy them thinking "if they can cross an ocean, they can get me anywhere." That's like saying the $1m Trophy Trucks that run the Baja 1000 would make a good daily driver

Another common reason people select Nordhavn is "just in case I ever want to cross an ocean." Understandable but it's always a risk to buy something for a future use case unless you're pretty savvy about it. Crossing oceans is serious business - you have to decide whether it's a bucket list item that's one-and-done, or you're going to be a full time cruiser such as MVDirona (a global Nordhavn owner who was quite prolific on YouTube).

I know of a few serial Nordhavn owners (more than one N owner) who select Nordhavn because they like the boat, not because they harbor any long range plans. I suspect that makes more sense in the PNW than The Loop. And then there's the affordability factor.

I'll close by saying a boat is a means to an end. A tool. Guys especially get a bit narrow focused on the boat and lose track of the end goal which to me is travel. It's a magic carpet that will take you where you want to go in a way that makes sense for you. A Nordhavn has its place, but it's not everyplace. If I owned one and wanted to do the Loop, I'd do the Loop with the Nordhavn I own and just accept height will keep me from closing the circle. But it wouldn't make a short list of boats I'd consider buying for a Great Loop use case.

Peter

 

[Mako]

"I'll close by saying a boat is a means to an end. A tool. Guys especially get a bit narrow focused on the boat and lose track of the end goal which to me is travel. It's a magic carpet that will take you where you want to go in a way that makes sense for you."

Nicely said, Peter. It's the basis of the very wise 95% rule: buy a boat for how you'll use it the majority of the time, not for the exceptions or infrequent.

 

[H2O_Doc]

I like Nordhavn a lot. I like the fit and finish, I like the way they're laid out, I generally like the equipment selections and installations. But every boat has a yardstick that was their benchmark for achievement when conceived and executed. The Great Loop was not the yardstick for designing a Nordhavn.
..........

Peter

Thanks. Lots of good info to consider there, Peter!

 

[BrianG]

hire a captain and trawler for a week and see what you think. I personally think you need a love of mechanical things to enjoy boating. eg I think a diesel engine is a gift for the gods. I like talking on vhf and setting them up. Bearings, grease, a clean bilge are sources of satisfaction for some. Gotta love the sea too-- and the risks and rewards.