How much is enough?

[FinallyFree]

That's my question. How much is enough? I've read through post after post and I'm having a really hard time gaging the answer to that question.

Here's my delema. I'm fairly new to sailing. I picked it up quite recently because my career basically tanked. I've taken courses and am continuing to do more week long live aboards. I'm 47 years old, maried (wife doesn't work), one son in University in another province (I'm paying for it) and board silly. Lucky for me while my career was going well I made good money and stashed it all away like a squirrel in a peanut factory. But, i have to live off what I did over the past 20 years for the next 30 or 40. My house is paid off, I have no debt and a solid investment portfolio that generates a sizeable income.

I've been obssessing with the idea of picking something up like a Beneteau 58, hiring a captain to live aboard to make sure that I don't kill my wife and myself in my first two years or so and say goodbye to land for the next decade at least. I'm challenged though with figuring out the budget. I'm not crazy. I didn't get to where I am by making wildly rash decisions with no information so I need some advice on what this life is really like from a dollars and cents perspecive.

I've seen posts where people are talking about living for 500 per month and 5000 per month on 80 thousand dollar boats but I haven't seen anyone talking about the expenses I'd be incurring at a differnt level. So, I've carved out a little budget that I'm hoping people could chew on and tell me if I'm way off.

Boat cost -

$800,000.00 (Initial downpayment $160,000.00, Balance owing $640,000)

Monthly Payment -

$6,000.00 (120,000.00 per year - Boat paid for in 10 years give or take)

Monthly Maintenance -

3,500.00 (42,000 per year - figure this is high up front but will be low towards the end)

Docking/Mooring Fees -

1,800.00 (21,600 per year) How much with this vary from port to port? BVI vs. Mediterranean vs. South Africa, etc.

Fuel Costs -

500.00 (6,000 per year - Could a sailboat need more?)

Captain Salary -

3,300.00 + Room & Board (39,600 per year)

Groceries -

600.00 (7,200 per year)

Clothing / Life Essentials -

500.00 (6,000 per year)

Boat Insurance -

(??? I have no idea)

Health Insurance -

(0.00 - Self Insured + Canadian HealthPlan)

Entertainment OffBoat -

2,000.00 (24,000 per year - maybe high)

Costs back home -

2,000.00 (Drastically reduced :-) )

Other -

(??? help me out - what am I missing)

Total Monthly - 20,200.00+ (242,400.00+ per year)

This budget as laid out above I can afford. If it's much more than that I'd have to make some adjustments, rent out my house back home, find a suplemental income while away (not an unappealing thought for me at all, I've even thought eventually it would be nice to do charters for people), something. I'm hoping you will all tell me that I'm too high on some of my estimates but maybe not. If I'm not budgeting enough for a new boat, by all means say so. My top end would likely be $1M though. Am I crazy to buy new vs. used. (My fear with used btw is cost of renovation and repair).

Should I be planning on warranty being a bigger part of maintenance for the first few years?

If I'm way off let me know. I wouldn't focus so much on thoughts about lifestyle or anything. My wife and I are not really big extravigant spenders. We don't eat at the finest restaurants (we actually don't like to eat out), ware the best clothes (her favorite stores are Old Navy and Target), go to the opera or anything like that. We'd like to have a nice place to live and see the world and absorb it slowly at a nice casual pace.

Let me know what you all think.

[Time2Go]

FYI
Two Years ago my friend inherited a chunk of money
and bought himself a drop dead Jenneau 45 Sun Odessey
with just about every bell and whistle He could think of.
We are talking EVERYTHING from Bow Thrusters to Radar
Electric Winches to Fresh Water Heads to upgraded 74 HP diesel,
Generator,Watermaker,AutoPilot, Intergrated Raymarine Electronics, 2x40"LCD's
and the list goes on
He spent a little less that 400,000 on the boat, Brand New
So I think you will be fine
Shitcan the 58 go with a 45 and put 400,000 away for a rainy day
What a Problem???

[boatman61]

^^^^^^+A1^^^^^^
Lots more places to park as well...

[svseachange]

Originally Posted by FinallyFree

Total Monthly - 20,200.00+ (242,400.00+ per year)... My wife and I are not really big extravigant spenders.

$20000/month is enough. Most seem to be doing it in $5000/month or less.

Best way to reduce your costs is to take that $160k and pay cash for a well maintained used cruising boat. Sometimes it seems like new boats have more problems than those that are broken in.

If you have a loan on your boat you probably cannot be self-insured. The lender is going to demand comprehensive insurance to protect their investment.

Congrats on breaking free of the daily grind.

[Seighlor]

My feelings are shared with Time2Go... Look for a good forty-five footer. Costs aside, handling a fifty-eight footer, particularly for an inexperienced couple, will likely detract from the experience you are anticipating.

Chances are you will not want a keel that draws much more than six feet nor a mast height of much more than sixty-two feet.

And give a little thought to the physical efforts involved in handling the sails and anchors.

All your attention appears to be focused on the financial aspects. My suggestion is to begin by acquiring more real-life experience. First, perhaps by chartering; then by sailing your own boat... one with more modest proportions. And in a few years if you still aspire to the fifty-eight footer, then go for it. I would not suggest it as a first boat.

Good luck.

[FinallyFree]

Originally Posted by svseachange

$20000/month is enough. Most seem to be doing it in $5000/month or less.

Best way to reduce your costs is to take that $160k and pay cash for a well maintained used cruising boat. Sometimes it seems like new boats have more problems than those that are broken in.

If you have a loan on your boat you probably cannot be self-insured. The lender is going to demand comprehensive insurance to protect their investment.

Congrats on breaking free of the daily grind.

Thanks.... Reason for the financing is really because borrowing is cheaper than my current time value of money. In other words I make more on money being in investments than it costs to borrow the same amount but your point about being self insured is an interesting one. It had never occured to me that I would not have full insurance on such an expensive investment. Certainly something to think about. Thanks.

If someone could let me know what typical insurance is worth that would be great.

[thinwater]

Spend a little time thinking about...

• Do you want a captain around? Sound repulsive to me, having a stranger inserted into my life. Depends on how much you enjoy having someone to manage.
• How much boat would you enjoy handling by yourself, older and probably slightly injured (s___ happens) doing the type of sailing you will actually do? I bet it's a lot less than 50 feet.
• Have you sailed a small boat in enough weather to say you can handle as much as the boat? Enough to be comfortable reefed way down and call it a "good day?" You don't need a captain to learn, you need time.

If those questions are not easy to answer, you need to sail more. Buy something small that you will sell (cheap compared to buying a boat that is wrong and there you aren't ready for--would you have enjoyed learning to drive with an 18-wheeler? No, you would have been a menace, focuse on not crashing rather than learning), and sail it nearly every day.

[Seighlor]

When cruising outside of U.S. coastal waters, I've always self-insured. The exception being the requirement for liability insurance while in Mexico. That was purchased locally, in Mexico, and was not expensive.

Insurance is just something you will have to "shop". With your lack of experience you will find it very expensive. But more likely not available at any price.

[FinallyFree]

Originally Posted by Seighlor

All your attention appears to be focused on the financial aspects. My suggestion is to begin by acquiring more real-life experience. First, perhaps by chartering; then by sailing your own boat... one with more modest proportions. And in a few years if you still aspire to the fifty-eight footer, then go for it. I would not suggest it as a first boat.

Thanks as well. I figured that I might have given that impression and I was afraid of that. Trust me this is not all I'm thinking about. It just is for this thread. I tend to analyze things one step at a time to come up with best move.

Right now I'm just trying to figure out what financing is like at this level for this type of craft. I think I did mention in my original post that I really had no intention of driving this myself without a professional captain but perhaps I'm still over reaching even then. Does this type of craft really demand more than one experience crew?

The reason for such a large craft has to do with my wife. I've taken her on a couple 45' Jenneau's and she thought they were tiny. Personally I could live in a shoe box but unfortunately that's the one thing that she's not real jazzed about.

[ranger58sb]

FF, some random thoughts:

1) An excellent used boat could cost you half that much, or less. One advantage to well-maintained used boats (aside from the different depreciation curve) is that the previous owner has likely worked out al the bugs. Installed some goodies, etc.

2) There are lots of boats bigger than 45' and smaller than 58' that may ring wifey's chimes. Sometimes the feeling of "tiny" isn't just about over-all length, but rather layout and space utilization.

3) I wouldn't work as a captain for that kind of money. Think 3x that, minimum, assuming you want somebody to manage the boat, too. (Lot's o' hands-on maintenance.)

4) You don' need to steenkin' captain anyway, at least not for that long a time. It's easy enough to have somebody come show you how to sail the boat, maintain the boat, service the systems, etc. on a piecemeal basis.

5) Unless you intend to hire out all your maintanence and service. In which case, docking in a good boatyard with on-site guys can solve that easily enough.

6) If you don't need a captain, that may influence you're idea of what size boat you can live with.

-Chris

[Prairie Chicken]

I think FinallyFree is on a different page than many of us. Congrats, by the way, on being able to leave the rat race behind.

Where we sail we see a lot of large yachts. Following a just a few random observations which may apply.
- annual expenses are generally about 10% of value of the yacht (or at least that is a formula often tossed around)
- often a full-time skipper is employed who will not only be your captain but also the manager. S/he will do much of the maintenance and hire what s/he can't do. Additional crew may be hired on when cruising depending on how hands-on you & your wife wish to be.
-boatman's comment about fitting in more places isn't facetious--the bigger you go the more difficult it can be to find room in either an anchorage or a marina.
- $1800/mo. would be way low in Spain. I have no idea what an 18 m mooring would be but it's about $1300 CAD for a 38' boat in high season there.
- your groceries also seem low. It depends so much on where you are but I'd suggest the same cost as you have now at home, plus you'll be feeding crew too. At least alcohol is less expensive in many areas than in Canada.

You may get more valid info from a professional crewing agency.

Good luck and happy sailing.

[MarkJ]

I think a big boat is great. Also look at the Jeneau 57.
You wont need a captain for that long. I would think one month would be fine.
Your big cost is in the repayments so when they are deducted you and not going crazy.

On a new boat properly set up I think you will find maintenance is less than you think for the first five years.

Spending time at anchor is a wonderful experience to be absolutely treasured, so drop the marina time down to a week per month.

So between the captains cost and marinas and maintenance your budget save: $40k, $20k and 10k respectively and your budget is $50,000 pa + $120,000 repayments = $170,000
That sounds a bit better, doesnt it?

BTW off boat entertainment isnt too high. A bit of tourism, land travel and nice dining out in wonderful places will fit neatly into that.

Enjoy your life while you are young! I retired at 48 and do not regret it for one moment!

[FinallyFree]

Originally Posted by ranger42c

FF, some random thoughts:

1) An excellent used boat could cost you half that much, or less. One advantage to well-maintained used boats (aside from the different depreciation curve) is that the previous owner has likely worked out al the bugs. Installed some goodies, etc.

2) There are lots of boats bigger than 45' and smaller than 58' that may ring wifey's chimes. Sometimes the feeling of "tiny" isn't just about over-all length, but rather layout and space utilization.

3) I wouldn't work as a captain for that kind of money. Think 3x that, minimum, assuming you want somebody to manage the boat, too. (Lot's o' hands-on maintenance.)

4) You don' need to steenkin' captain anyway, at least not for that long a time. It's easy enough to have somebody come show you how to sail the boat, maintain the boat, service the systems, etc. on a piecemeal basis.

5) Unless you intend to hire out all your maintanence and service. In which case, docking in a good boatyard with on-site guys can solve that easily enough.

6) If you don't need a captain, that may influence you're idea of what size boat you can live with.

-Chris

These are all excellent points as have been all of the other ones by other responders. Thank you all. I probably should not have mentioned a boat. I think I got you all hung up on a 60' boat by accident. Wife needs a reasonable owners cabin, salon, and a place to put her towel for tanning. Really wish I hadn't mentioned the boat now because it doesn't need to be that. Was just trying to set a budget.

I have a few friends that are also boaters (not sailors) and they are telling me that buying smaller boats and working my way up is a waist of time and money. They all advised me to buy the biggest thing I could afford and hire a captain so I was setting my goals at a final resting point right off the bat.

One thing you are absolutely correct on is that if I didn't NEED a captain, I wouldn't have one. Perhaps by the time I actually get this all done I won't need one. IMO nothing replaces hard earned experience and I don't have enough of that yet. At least several more live aboard courses and as much every day sailing on smaller craft are definitely on my agenda prior to pulling any triggers.

The general opinion seems to be that more than 50' is too much craft. I'll need to take that into consideration for sure. I'm also a Pilot so this concept is not lost on me. I do realize I'm not about to try and handle a 747 either.

Thanks very much. Please feel free to provide other suggestions and oppinions. I value them all.

[Palarran]

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.

[oldragbaggers]

Exiting thread to return to the real world.