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Old 31-03-2014, 18:37   #61
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Re: How much is enough?

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I don't like debt and then the idea of debt on a toy (yes our boats are our toys) I like even less. Even if the financial information said it made sense, I just couldn't personally do it. Even as a former accountant, my emotions overrule the logic in this matter. Yes, it's a little extra income I'm passing up, but I just am more at ease in so doing. Logic is if you can borrow at 2.5% and use that money to earn 5% or more, you do it. But I've just become conditioned in such a way I can't bring myself to do that.
I feel the same way, but I did do it a few years ago when MB were offering extremely low financing for a new car. We took their financing & made about 3x more on our investment. BUT, I'd never had car payments before in my life & every single month I looked at it and just didn't like the feeling. As soon as it was fiscally beneficial I paid off the car. I'm not saying it was wrong or I wouldn't do it again ... but I sure didn't like the feeling.
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Old 11-04-2014, 15:48   #62
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Re: How much is enough?

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Originally Posted by Prairie Chicken View Post
I feel the same way, but I did do it a few years ago when MB were offering extremely low financing for a new car. We took their financing & made about 3x more on our investment. BUT, I'd never had car payments before in my life & every single month I looked at it and just didn't like the feeling. As soon as it was fiscally beneficial I paid off the car. I'm not saying it was wrong or I wouldn't do it again ... but I sure didn't like the feeling.
You finance assets and you buy liabilities. Financial Planning 101 a boat is a Liability no matter how you use it or look at it. With that said if your itch is too great and your needs are too vast that you need to finance a boat you need to counter balance your future points gained on your assets to cover the loss through interest and depreciation.
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Old 11-04-2014, 20:52   #63
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Re: How much is enough?

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Originally Posted by Palarran View Post
The problem I have with using time value of money for comparing borrowing vs paying out right is the risk factor. The market has been smoking hot now for 4 years. Anybody could have made huge returns. Going forward it is questionable whether you can count on that. So if the market tanks, you loose major amounts at the same time that the value of your boat also plunges. Paying with cash makes you 3% but it's guaranteed. My goal at this stage of life is to be bullet proof, not just hope I am based on returns from investments other yahoo's control.

You might also try to take 4 months and really live aboard before you make this type of commitment. I would guess there is a 50% chance that after a long period you or your wife will find it isn't what you want full time. At least that is what happened to me. I never planned on being a full timer, but after spending 4 months non-stop on a boat, I was sure land and home would still be needed.
I'd like to underscore both Palarran's points. We recently had a young friend have to completely give up on his cruising for the above reason. In addition, boats never appreciate, they are money holes, and you won't get back near what you think it is worth when you sell it. That's how it is.

And, the second point is that cruising isn't for everyone. Since you can afford it, why not try the often suggested route of chartering different types and sizes of boats in places you are interested in, then decide together if you like the life enough to want to own?

FWIW, after a few coastal cruises and races, we took Jim's 30 footer to Hawaii and back to San Francisco, in order to see if we liked blue water cruising. As it turned out, we did. And we bought a 36 footer for "the cruise", at the time, a large boat for the job.

Chartering is not the same as owning, and it won't cover the blue water passage issue either, but it is a reasonable step in a progression towards either blue water cruising, coastal cruising, or perhaps looking in a totally different direction.

Ann
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Old 13-04-2014, 09:57   #64
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Location: Saint Augustine, Florida
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Re: How much is enough?

To get back to the insurance question, your lack of experience might become an issue with that size of a vessel, so make sure you get a firm commitment BEFORE you buy the boat. A contract in hand would be even better.

In any case, you'll need between $350k and $1M of underwritten liability just to be able to park the thing in most US marinas (be they private or municipal).

In marinas like many of those on the ICW, physically docking a larger boat can also be a problem. When we brought my 64-footer from Fort Lauderdale to Saint Augustine, we spent half the nights tied up to a fueling dock, simply because she wouldn't fit in the slips. In each case, we had to moor or anchor out until the fuel pumps shut down in the evening, and had to be gone before they opened for business the next day. So much for R&R...
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Old 23-04-2014, 11:11   #65
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Re: How much is enough?

My peronal opinion about a comfortable sailing boat ( I guess that's what you're wanting too ).
It HAS to have a few goodies that are essential for easy sailing and living on board. Be that for a weekend a month or the rest of my life.
1) Electric winches.
2) AC Genarator.
3) Air conditioning.
4) Enough space to store anything and everything that makes live sweet(er).
5) Lot's of tankage both water and fuel.
6) More than enough battery power for all the toys one "needs" in todays world.

The list could go on but if we consider just the above then there's no way one could reasonably fit all this into a boat that's less than 45 feet AT LEAST. Again that's my personal way of being comfortable on a boat.
In fact, I ended up with a 49 footer.

I think I'm a rather experienced sailor but the first days on the new-to-me boat were...well let's say frustrating. I was feared if I was able to handle that big of a boat. Well, let me say just this, now that we've learned that one can't do basically anything on that size boat with muscle power with all the goodies we have on board it's easier to handle the 49 feet than it was with our previous 37 footer.

I'm not trying to say that handling a big boat is for beginners but once one get's used to it I find it actually to be easier to handle a big boat than a smaller one. It's nothing that a beginner can't learn in a relatively short time.

Since this is going to be your first boat, rather than buying new I'd buy "almost new". Six years old max or eventually less than that. After six years most boats have lost about half of their initail value. Should it turn out that it's not the right boat for you, you won't loose that much money should you want to sell it.
Here in Europe you can buy a five-six years old boat for 140-200K Euro in the 50 foot range. I'd start the dream a little slower and then see how it goes.
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