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Old 30-04-2013, 17:07   #1
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Funding the Dream

Howdy Folks,

My wife and I have been talking for a while about leaving the rat race and cruising for a while to slow down and see the world a bit. In addition a long-term dream has been to move somewhere tropical and open a dive shop, and bar. Since we've yet to chose a place, cruising seems like an excellent option for making our exit and scouting for the right place/opportunity.

Which brings me to my real question. We've started to get more serious about actually making this happen and are adjusting our lifestyle to get more aggressive about funding the dream. We're working with a financial adviser to formalize a plan and I'm looking for a little guidance on how to build a somewhat accurate model. We don't yet know what size boat or price but are thinking something in the 100k-200k range. I've been reading fairly extensively and will continue to do so, but in the mean time I need to start somewhere. For a worst case scenario lets assume we go with a $200k boat and are planning for between 10-12k per person per year. If you where planning for a 3-4 year cruise, what's a decent rough guide for ongoing maintenance. The only way I can see us getting up to $200k is if we bought a decent used boat and did the refit before departure or shortly thereafter in a foreign port to save cash. So if the boat is fairly clean to start is the 20% boat value model I keep hearing accurate?

Thanks in advance, and my apologies for the length of my first message

-EB
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Old 30-04-2013, 17:34   #2
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Re: Funding the Dream

EB, I read your post twice with a hope to contribute something useful. I don't have your easy answer. I do think that you can purchase a boat for a three or four year cruise for something between 100K & 200K without expetactions of big refit and maintenance costs. This is expecially true if you are aiming at a boat in the 36' to 42' range. Shop with patience and obtain a survey before the final purchase. Opening a business in a foreign land seems to be a much greater step than a three to four year cruise and I have no expertise to adress that; however, the boat can suit you well for that time period and price without significant added costs. I would find the 100K boat and put aside the rest for contingency.
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Old 30-04-2013, 18:16   #3
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Re: Funding the Dream

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!!
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Old 01-05-2013, 05:43   #4
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Re: Funding the Dream

Greetings and welcome aboard the CF, EB.
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Old 01-05-2013, 06:01   #5
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Fly and Buy... get more 'BANG' for your bucks...
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Welcome to CF... good luck with the dreams
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Old 01-05-2013, 06:27   #6
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Re: Funding the Dream

How about just back-packing around the world for a couple of years?
Without a boat. Give you a break from your personal rat-race, allow you to see the rat race the rest of the world lives with, and maybe find your Shangri-la.
Having personally worked in several third world countries, as an employee, I agree with previous posters...opening a biz overseas is a massive task.
Remember, if it's hard to make it work ( ie be profitable) at home...it'll be much harder in a foreign land. Much less stress to work for a dive shop.
Who knows, if you choose more beach oriented destinations, you might find a cheap boat.
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Old 01-05-2013, 06:44   #7
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Re: Funding the Dream

We are currently doing what you describe(except the business). We will treat this as an extended vacation. In 2010 we budgeted $250,000 for our boat which includes initial purchase and refit. We were looking at mid 80s 45 footers and could not find anything we liked that was in decent shape. We ended up going smaller and newer and bought a '97 Caliber 40LRC. It was actively being cruised. We literally bought it right here in Maine in the middle of the owner's cruise and sent them back to Texas.

It had everything we needed but I wanted to do some things to minimize maintenance, simplify systems and add redundancy and some conveniences as we would be living aboard for a couple of years to save our cruising kitty and get to know the boat inside and out. The boat was in such good shape I budgeted $30k for the refit.

We have pretty much completed all of the major work and are right on budget. Our 5 year plan to refit and leave to do some cruising is ahead of schedule. With all the work we have done and spares we have accumulated we hope to reduce expenses while cruising. Our yearly budget will be roughly $30k. This includes living expenses, insurance and boat maintenance. We do all our own work. We only pay boatyards for hauls.
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Old 01-05-2013, 06:44   #8
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Re: Funding the Dream

Let me start by saying that I wish you the very best of luck. Honestly, I do. But I'm going to toss a cold bucket of reality on a couple of your comments here.

Quote:
Originally Posted by ErBrown View Post
...a long-term dream has been to move somewhere tropical and open a dive shop, and bar.
It's a great dream. It's one that I have. It's one that about a million other people have. It's one that a whole lot of people have tried, and a whole lot of people have lost their entire nest-egg chasing.

Buying a business in a foreign country involves a LOT of paperwork. What's more, the profit margin on a bar/dive shop is as paper thin as it can get. Mainly because of the million other people with the same dream. You are going to have to be a very savvy businessman to make something like this turn a profit. I hope that you are.

Quote:
Originally Posted by ErBrown View Post
...did the refit before departure or shortly thereafter in a foreign port to save cash.
You are not going to save cash by doing the refit in a foreign port. The places where labor is cheaper, the cost of parts (and the shipping to get the parts there) is going to be a LOT more. Your best bet is to plan on doing the refit right here in the good, old USA. Texas is actually a pretty good place for that. There are a lot of port towns, with a lot of boatyards. Florida is also pretty good for refitting a boat.

That's the cold reality. Now for a little encouragement. Depending on how tight money is, and just what sort of boat you want, you can get a whole lot of boat for considerably less than $100k. If you can accept a 32'-38' monohull that is several years old, you can find decent ones for less than $50k. Then another $50k in refit will get you a very well-found boat, that will be setup exactly to your needs, and that you will know inside and out.

After that, a few thousand a year should cover basic maintenance. The real question, when it comes to on-going maintenance costs, is if you want to set aside for major repairs, or if you want to eat those expenses all at once. One way or another, they have to be paid, either when you actually do them, or when you sell the boat and take a hit on price because of them.

Then, too, how much you can do yourself will have a HUGE impact on what your maintenance costs are. If you are pretty handy, and can do minor electrical, plumbing, and engine work yourself, then you can get by for WAY less than the guy who hires all of that sort of stuff done.

With just a few tweaks here and there, this is a very reasonable dream. A lot of people are out there living the cruising life right now. I sincerely wish you the very best of luck.
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Old 01-05-2013, 06:46   #9
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If you go to bed at 9pm every night... have to leave parties before 11pm coz your tired... can't see what your holding when stood at the urinal.. need regular meals and routines..
Buy a VW camper van and live/tour round for a year and see how you cope..
If that goes ok and your visuals have improved then maybe you can get a boat and live a tougher life...
It aint really like Capt Ron... movie sets with 5min shoots then break for coffee... its the real thing
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Old 01-05-2013, 06:50   #10
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Re budget: save up the 200K, buy a boat for about 100k, refit and still have dollars left in the cruising kitty. Dont stretch yourself financially for the boat...many cruisers think they need the ultimate boat and get trapped ashore trying to pay for it...plenty of good older monos out there which are fine cruising boats. One example of many, you can pick up Pearson 36, a good boat for a couple, for well under 100K.

Re on going "cost of ownership" (maint, insurance, dockage, etc) I think 10-15% per year is a good approximation. Search forums for discussions.
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Old 01-05-2013, 07:05   #11
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Re: Funding the Dream

And let's not forget the Mother of Cruising Inspiration...the Bumfuzzles....who seemed to make it work, for a while.
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Old 01-05-2013, 07:46   #12
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Re: Funding the Dream

Thanks for the feedback folks. Perhaps I should have been a little less specific about the dream and just said that my wife and I are looking to capitalize on our current high paying careers by stashing as much cash as we can in the next 5-7 years so we can make our exit and focus on the important things in life vs a stockpile of $. I realize the diveshop/bar is not an original thought, but then again that's what makes it a "dream". I guess in my head it's more a symbol of something that allows us to live somewhere that much of the world works all year to save $ and vacation time to visit. We know our outlook and plans will likely change once we've been cruising full time for a while, but for us the important thing is giving ourselves a realistic chance to make a form of the dream reality, and that we actually get out and do it vs. sitting around talking about it.

We've done a good deal of travel and typically aim for things like trekking/adventure travel that take us off the beaten path and by definition means giving up most of our creature comforts. For us the important thing is getting to new and interesting places and doing our best to experience the culture and feel of the place.

I'm not really looking for anyone to validate the dream for us, but am very interested in the voice of experience when it comes to planning the financial side of cruising. The numbers I've seen here and other sources seem to bounce between 10-20% of boat cost for annual maintenance. To me (with no real experience) 20% seems really high, which is the reason for my OP to learn from folks who have been there. We're keeping our options completely open on the boat and are certainly not looking to break the bank, but as with any other financial planning...you have to start somewhere. Right now I'm most interested in doing everything I can to ensure our placeholders for large ticket and ongoing expenses are as realistic as possible.

So please keep the responses coming, particularly any with actual numbers and what has worked for you. We appreciate all constructive feedback, but can do without the Captain Ron comments.
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Old 01-05-2013, 08:08   #13
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Re: Funding the Dream

Trying to put a firm, exact number on ongoing boat maintenance costs is trickier than trying to herd cats.

Look at it this way, how much does it cost you to maintain your house every year? Well if it is relatively new or in great condition, next to nothing. But every 10-20 years you might have to put on a new roof which could be $10,000 or you might have to paint the house or replace the carpets or redo the bathroom. So how do you account for these periodic costs? Some you may never have to do like plumbing or wiring. They may last the life of the house or you could have a problem and spend thousands.

On a sailboat, if you are looking strictly at the costs to maintain and repair the boat can be very little. But the standing rigging should be replaced every 5-15 years depending on how much you sail, if you are in the tropics or temperate zone, etc. New rigging for my 42' boat was about $3,000. Same thing for sails. They could be good for 5-15 years and then you have the big bill come due. Again for my boat in round numbers about $3,000 each for main and genoa.

So my take on boat maintenance costs, not much especially if you do the routing work yourself (oil changes, filter changes, belts, hoses, etc) until the bit ticket items hit. If you want to break it down on a yearly or monthly basis assume a boat mid forties in length starting out with new sails and new rigging and you put a moderate number of miles on the boat so get 10 years out of both (maybe pushing the limit for the sails but for sake of argument) then you should stash away about $1,000 per year for the eventual need to replace sails and rigging, a bit more if you cover a lot of miles and want to keep your sails in top condition.
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Old 01-05-2013, 08:13   #14
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Re: Funding the Dream

Your numbers seem OK for purchase and refit. The refit can easily exceed 20% depending on what's needed/wanted. Keep in mind that many people buy and refit a boat for a lot less than $200K, and most of them are planning to cruise for longer than 3-4 years. Where you are going to cruise, what size boat, etc. will all have significant impacts on your costs.

We are preping to leave for the Caribbean in 2015 with no specific time frame for how long we will go. Ultimately we will not come back to New England to live and will probably not go back to our career.

We have a 31 footer. We purchased her in 2010 (she's a 2001) for $63K and have already put close to $10K into her. I have another almost $20K that I would like to spend (click link for list of expenses and projections). So we are going to be close to 50% but still under half of your budget.

I think your annual cruising budget needs to include at least $2K for maintenance and that would be just for supplies with you do all of the work.
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Old 01-05-2013, 08:26   #15
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Quote:
Originally Posted by ErBrown View Post
So please keep the responses coming, particularly any with actual numbers and what has worked for you. We appreciate all constructive feedback, but can do without the Captain Ron comments.
Point taken...
Its just this is an oft posted question and sometimes a reality factor needs inserting...
its a horrible sight watching someone's dreams turn to ashes during a short delivery... especially so if its someone you like..
one friends boat has sat in the marina here untouched for 18mths since I delivered it... the owner jumped ship 1st port after the Biscay..
Dreams of sailing the world have withered and died.. along with a bit of the man..
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