Funding the Dream

[zeehag]

boat purchase--10kusd.
repairs--so far, over 4-5 yrs-----total is around 7 k usd.....

predicted repairs have no monetary comparison as fabrication is main way i replace my parts--i have a really decent friend.....we cruise together, so far...repairs are easy this way. he has own boat, as do i. dont have to sleep with mechanic to do it right....lol

you will need to remember to consider the liability isurance for the places you intend to visit, and the docking fees and fuel pricing. food is easy and usually inexpensive. varies place to place.
if you need comprehensive insurance and replacement insurance, you will have a limit on cruising range and areas and timing. and is pricey.
the largest factor is the boat purchase initially. that depends on your desires nd individual needs.
happy sails.

no one can actually predict in real dollars what you need to save fro cruising as everyone needs different things for survival and comfort.


y0u nay want to charter a few times in places you havent yet been to see if you are happy with this way of being--many do give up early into this lifestyle as it is not an easy one all the time, nor is it always cheap or predictable.

[Kenomac]

Originally Posted by tookish1

I agree with CaptForce - if you budget $200k, spend $150k on the boat because it will be $200k when you are ready to sail away - at least that's how it worked out for us. Opening a business in a foreign port is very difficult - there are many threads on earning a living outside the US. Ultimately, I think having some passive income (interest/dividends/rental real estate) should make up 50% of your living budget. Then you can work as you need to keep the cruising kitty topped up. Emergency cash also important depending on your risk tolerance.Good luck pursuing the dream!!

100% Great advice. I couldn't agree more. The successful cruisers I've met all seem to have one of three things in common: 1) Passive income back at home (business, bonds or real estate) 2) Receiving a great pension 3) Able to work over the internet.

I'd say forget about trying to start a brick and mortar type business outside your own country; you'll meet up with lots of resistance from the local population. One good friend of mine got himself kidnapped down in Mexico after appearing a little too successful while operating his own boating related business.

Budget: A fellow I know who's been cruising full time for 11 years on $500k yacht and living modestly and comfortably, says plan on spending around $25k per year excluding major repairs. He anchors out during the peak season in order to avoid the high mooring fees.

[endoftheroad]

Personally I wouldn't know what to do with all that money and might feel guilty writing all those checks.
To me that's a very easy budget for a comfortable cruising experience.

Here is a very nice young professional couple that are very good at estimating as it's related to the type of work they do for a living.
They are spending money now on things that many people might just do without or fix along the way. The time for them to "cut the lines" is getting closer and they should be cruising in comfort with a well refit boat.
Cost to sail around the world | Sundowner Sails Again

endoftheroad

[belizesailor]

Re dreams and budgets.

Re-reading your OP, I realized "the dream" was a lot like mine originally...and we did it...sailed off and started a business in another country.

I agree that your budget for the boat is good and that 20% is high for annual costs. I do think you should plan on at least 10% though (matches my experience).

I also agree w other comments alerting you to the realities of establishing a business as a foreigner in a (presumably) "developing" country. Ive been there and done that. It is not impossible, even though it will probably seem that way at times. Budget suggestions for that part: 200% of your best estimate plus 30% of that total...plus loads of time and frustration...and be aware that it is very possible to lose it all...failed dreams liter the landscape here in "paradise". I would budget a minimum of 1 year to get the business up and running (thats one year before it produces a dime of revenue...and you are bleeding cash like a stuck pig) The oft heard joke in Belize: How do you make $1M in Belize? Start with $2M !

Rather than depending on the dream business, which can easily turn into a nightmare, to fund your lifestyle I suggest putting less money in the boat and more in the "bank".

I started forming my dream in my 20's and planning to make it real. I punched out at 40 and Im still "out here" 13 years later.

So yes it can be done.

[ErBrown]

So for the sake of argument, let's say we'll be seeding our investment account (the start of our cruising kitty, business startup funding from an alternate source) with around $250k. As I'm preparing my plan for review with an investment adviser, he's obviously interested in our risk tolerance. My initial thought is that I'm fine with a little more risk while we're ensconced here on land and gainfully employed. We'll be adding to the fund as rapidly as possible and given the time range 5-7 years my thinking is a higher return early on is worth a little more risk...for a while. As we get closer to a purchase and departure date then stable income from the fund becomes more critical to me.

I'm just curious how those of you who have done it, how does this match-up with your strategies. Anything you wish you had done differently, and why?

Thanks again folks

[seandepagnier]

junk rig: has no standing rigging to replace, and sail can be made from fabric that lasts 20 years (without the sail cover) you could then plan on 0%

[nimblemotors]

My suggestion is to call it quits on making more money to have a bigger boat.
$250k will be just fine for two people, $100k boat leaves you plenty in the bank.
Investments advisors are trying to find you 2% vs 1%, don't bother with it,
stop paying your land-based expenses and "the man" with your time, and you'll "make" a heck of a lot more.

[FLLCatsailor]

I went through the whole process of opening an entire business on a caribbean island, and even with the support of a major global company with connections on the island it still proved difficult at times.

The best way to make an extra buck while out cruising is to get into freelance captaining for charters or deliveries.

In terms of budgeting for your boat. I would definitely say that try to stick to the lower amount of your budget for initial boat purchase, and have money to spend on refit/cruising kitty.

I would also go with something that is very easy to maintain like a newer production boat... You would be surprised what you can find for 125-150k in something like a Jeanneau or Beneteau...

[molo0928]

Originally Posted by Kenomac

100% Great advice. I couldn't agree more. The successful cruisers I've met all seem to have one of three things in common: 1) Passive income back at home (business, bonds or real estate) 2) Receiving a great pension 3) Able to work over the internet.

I'd say forget about trying to start a brick and mortar type business outside your own country; you'll meet up with lots of resistance from the local population. One good friend of mine got himself kidnapped down in Mexico after appearing a little too successful while operating his own boating related business.

Budget: A fellow I know who's been cruising full time for 11 years on $500k yacht and living modestly and comfortably, says plan on spending around $25k per year excluding major repairs. He anchors out during the peak season in order to avoid the high mooring fees.

So.... would you say $2,800/month doable comfortably in the Caribbean on a $100k boat? That will be my pension income after I retire in 4 years.

[cheoah]

Originally Posted by molo0928

So.... would you say $2,800/month doable comfortably in the Caribbean on a $100k boat? That will be my pension income after I retire in 4 years.

I really think you could have a great time with that budget. Lots of boats out there to choose from if your needs are modest. My 34 footer cost half of your proposed budget, and with that extra money could be repowered, new sails, new electronics, and stash away a chunk for unforeseens.

You're looking at under $100/day for your budget which could get eaten up in one night at the wrong marina! Anchor out and you spend your money on other stuff. If you cook on the boat you can spend very little compared to restaurants and cocktails. Realistically, you can do some of both but it won't be an extravagant cruise. Doable, though.

Like other captain said, you have to spend some money once in a while. Transmissions go, sail and canvas work, regular haulout, and on and on. Even if you're pretty savvy and self sufficient, it's amazing how much money you can spend.

To the OP, I think you're pretty well set! Start looking at some boats, don't get in a hurry, and you might find you can do with less. Maybe not. Either way, money won't be so much the issue as all the skills it takes to run a boat competently and handle some of your own maintenance. You'll figure out along the way if life in the tropics is for you as far as the dive shop goes. Good luck with it.

[sy_gilana]

10% of boat value per year to run it. Depending on lots of variables that are very subjective.

Go cruising for a while with another couple?

[Kenomac]

Originally Posted by molo0928

So.... would you say $2,800/month doable comfortably in the Caribbean on a $100k boat? That will be my pension income after I retire in 4 years.

Depends on lifestyle. When we go cruising 6 months per year, we rarely go out to eat and spend most of out time sight seeing, riding bikes or just hanging around at anchor and socializing with new friends. We spend much less than when land based, mostly just on groceries.

Some of our friends spend enormous amounts of money, sometimes more in one day than we would in an entire week. Example: If one feels the need to be plugged in electrically at a pontoon in the Med. every night, it can cost 400 euros per night during the summer, anchoring out is free.

[endoftheroad]

Originally Posted by Kenomac

Depends on lifestyle. When we go cruising 6 months per year, we rarely go out to eat and spend most of out time sight seeing, riding bikes or just hanging around at anchor and socializing with new friends. We spend much less than when land based, mostly just on groceries.

Some of our friends spend enormous amounts of money, sometimes more in one day than we would in an entire week. Example: If one feels the need to be plugged in electrically at a pontoon in the Med. every night, it can cost 400 euros per night during the summer, anchoring out is free.

Here in Key West we don't see many boatsof your caliber anchoring out.
It would be nice though.

[boatman61]

[QUOTE=FLLCatsailor;1225121]
The best way to make an extra buck while out cruising is to get into freelance captaining for charters or deliveries.
QUOTE]

Don't bank on it....
See 'Change of Plan....

[belizesailor]

Re how to do it finacially and what has worked for others (me in this case).

You apparently have a relatively high income. Take maximum advantage of that. So did I, but I was a very low overhead workaholic...so I lived on a fraction of my inome and dumped loads into savings and investments over about a 16 year period...not relatively so much into boats.

Passive income is wonderful thing. Bonds are the ultimate passive income because they are totally passive. Tax exempt bonds are becoming more scarce but they are out there yeilding 4-5%. Only buy high grade bonds issued by entities w good financials (I avoid corporate bonds all together because I dont trust any financials from a USA company these days...ditto for stocks).

Debt. Having personal debt is like having financial cancer. Get rid of it...especially the really malignant variety for depreciating assets like cars (foolish waste of money...I still drive my 1989 Jeep) and consumer goods. Most Americans spend most of their income on debt service...they are in financial prison...free yourself.

Supplemental Income. Lots of discussion of what others do here on CF. In my case I am a sailing instructor and charter captain.