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Old 18-04-2017, 13:22   #1
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How would you spend $1millon - with a twist

Hi All

First time poster on this forum, so will put in a bio sometime soon. In the meantime - while I'm sure everyone here can easily come up with a few options to blow (wisely spend?) a million on a boat, here are a few challenges to this (hypothetical) scenario:

- $1,000,000 to fund both your boat and full-time cruising, with the balance above what you spent on your vessel yielding 5%* return
- Your vessel has to be capable of circumnavigating - safely, with average crew under average conditions
- For the purpose of this exercise ignore large unexpected expenses, but normal maintenance costs would have to be covered by investment return
- Just try to make broad, reasonable assumptions on maintenance cost for the size and age
- By no means a requirement, but would be interested to hear thoughts for multihulls (the missus is prone to sea sickness)
- Include insurance cost if you like, though this gets more complicated as has to adjust by boat value
- Can include actual listings or just a theoretical, fair value vessel

So, a nice new $500k yacht would mean only $25k p/y for all other costs - though maintenance would be lower on a new, high quality, small vessel. $200k would mean $40k p/y spending but higher maintenance cost and repair time if used, or less safety/comfort doing longer passages.

I'm not trying to find the ultimate cost/comfort/cruising kitty combination, as this will be vastly different for each individual. Rather, I'd like to hear what your specific ideal scenario would be, to basically sail in perpetuity on $1mio.

*Long term 4% is more accurate but I like to skew a bit towards capital protection

Cheers!
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Old 18-04-2017, 13:37   #2
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re: How would you spend $1millon - with a twist

I'd go to Thailand and build an Oram 48C. That would leave around $700K cruising budget.
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Old 18-04-2017, 13:44   #3
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re: How would you spend $1millon - with a twist

Stay simple. Spend $150k - $200k on a nice 40ft - 45ft monohull. Loaded with toys (scuba gear, camera gear, drones, fishing poles, etc). Keep plenty of cash in reserve so I don't have to think very long on if I want to do something (jump into a marina for a week, anchor out for a week, based on what I feel like doing not what my budget is). Have the freedom to put the boat up for a bit to take a "vacation" from my permanent vacation if I desire (jump on a jet to somewhere else for a week or two).
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Old 18-04-2017, 14:12   #4
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re: How would you spend $1millon - with a twist

Buy the Lagoon 380 owners version in the classifieds for $200k and get going.

It's a lot of boat for the money, in good condition, an a great platform for cruising the world. Also won't cost you a fortune to maintain.

Boats are depreciating assets. If the $1mm needs to last a long time, you're best off spending as little of it as possible on the actual boat.
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Old 18-04-2017, 15:04   #5
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re: How would you spend $1millon - with a twist

Quote:
Originally Posted by dwedeking2 View Post
Stay simple. Spend $150k - $200k $250k-$300k on a nice 40ft - 45ft monohull. catamaran. Loaded with toys (scuba gear, camera gear, drones, fishing poles, etc). Keep plenty of cash in reserve so I don't have to think very long on if I want to do something (jump into a marina for a week, anchor out for a week, based on what I feel like doing not what my budget is). Have the freedom to put the boat up for a bit to take a "vacation" from my permanent vacation if I desire (jump on a jet to somewhere else for a week or two).
There, fixed it for you.
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Old 18-04-2017, 15:27   #6
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re: How would you spend $1millon - with a twist

If you have the money to spend up front on a new(er) nicer boat, do it. You'll spend more time enjoying it and less time fixing it. If you start with an older boat you will end up spending time and money fixing all the problems that come with an old boat and you'll still have an old boat.
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Old 18-04-2017, 16:22   #7
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re: How would you spend $1millon - with a twist

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Originally Posted by LoudMusic View Post
If you have the money to spend up front on a new(er) nicer boat, do it. You'll spend more time enjoying it and less time fixing it. If you start with an older boat you will end up spending time and money fixing all the problems that come with an old boat and you'll still have an old boat.
But even if you buy a new boat, in a few years, you will still have an "old boat" and you will have taken a big fiscal hit from depreciation.

The scenario posted was for a long term cruise... many years in duration.

Jim
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Old 18-04-2017, 16:28   #8
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re: How would you spend $1millon - with a twist

See the current boat depreciation thread....might make you think twice about dropping serious cash on a new boat....unless you have another mil stashed.

Im with the buy a more modest used boat and keep cruising sustainably crowd.

There are lots of good boats, both monos and cats now that you could get into (including refit) for $200K or less.

Put the remaining $800K in good conservative income producing investments (which are a bit more challenging to find these days) and have $40K a year at 5%. And you preserve the $800K...the $200K in boat...well... at least it was fun.
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Old 19-04-2017, 08:43   #9
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re: How would you spend $1millon - with a twist

A million ain't what it used to be ...

A 300k cat leaves you just shy of 3k/mo to cruise on at 5%.

Certainly doable. We did the cat thing for a decade, no regrets. The details work themselves out.

Tell us you got a mill ready to go then call that kid who just started brokering :-)
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Old 19-04-2017, 08:48   #10
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re: How would you spend $1millon - with a twist

Quote:
Originally Posted by 44'cruisingcat View Post
I'd go to Thailand and build an Oram 48C. That would leave around $700K cruising budget.
That was my initial thought, though a George buehler design like the Big Mel or Alca I
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Old 19-04-2017, 08:55   #11
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re: How would you spend $1millon - with a twist

Way I did it was to figure 4% on a return and buy a close to $100K boat, then spend almost what you paid on the boat replacing everything that moves, many things that don't and upgrading things to what YOU want, interior, mattress etc.
That gives you an investment of $800,000 that will return at 4% $32,000 a yr or $2,666 a month, which I think is pretty bare bones, others will differ, they are not right or wrong, there is no right answer.
I picked 4% cause I'd rather be a little conservative
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Old 19-04-2017, 09:33   #12
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re: How would you spend $1millon - with a twist

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Originally Posted by a64pilot View Post
Way I did it was to figure 4% on a return and buy a close to $100K boat, then spend almost what you paid on the boat replacing everything that moves, many things that don't and upgrading things to what YOU want, interior, mattress etc.
That gives you an investment of $800,000 that will return at 4% $32,000 a yr or $2,666 a month, which I think is pretty bare bones, others will differ, they are not right or wrong, there is no right answer.
I picked 4% cause I'd rather be a little conservative


Thats the way. Spend less on the right boat purchase and replace everything .

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Old 19-04-2017, 10:50   #13
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re: How would you spend $1millon - with a twist

Depends on your sailing experience.

Assuming no experience 25k max. Can sell it after a year or two and go bigger. No shortcuts in life.
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Old 19-04-2017, 11:36   #14
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re: How would you spend $1millon - with a twist

It also depends on your age. If you are over, say, 60 then I wouldn't feel bad about spending up to 300,000 on the boat. 700,000 will take you 23 odd years to go through at 30,000 a year with no interest earned. So should last till your death bed with interest earned.
I'm in my early 40's so to retire now I need enough to be able to live off mostly interest if not fully.
So for me in this scenario, I would spend 150,000 on purchase and refit, then try to spend below the interest earned to build the principal back up. If things go well, you can always upgrade.
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Old 19-04-2017, 13:29   #15
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re: How would you spend $1millon - with a twist

I had a friend who used to fight this battle with himself. I asked him "Tony, why do you want to live on the interest? You're 53 and not living forever. Pick a realistic date where, if not dead at least not cruising anymore and calculate it down to about 100K left at that age. Then you will have more to spend while younger and can enjoy it while still having enough at X (maybe 85?) to buy a weekly supply of Depends so you don't have to get out of your rocking chair every 30 minutes!"

I figure why should I scrimp in order to give to the kids, who I know won't scrimp with my money!
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