Is a $100k Loss on a $400k Boat in Two Years About Right ?

[lorenzo b]

Just imagine what happens when you buy a 10 million dollar boat. Boats are not good investments and if you can't afford to just piss money away you should not own one. What you can do if you want adventure and want to see the world is pack all you need into a
one backpack and take the next bus anywhere. You can go for years anywhere you want for less than $50 a day and live like a king. That's less than $20 K a year. If you want to sail, crew on someone else's boat and get paid. But owning a boat is very expensive and you will never recover what you put into it.

[atoll]

HOW TO BECOME A MILLOINAIRE AND OWN A YACHT!

start off as a multi-millionaire..........

[Ram]

I have made money on more than 1 boat, in 1992 I bought an Albin Trawler it had 124 hours on it,like new at less than half price of new- I used this boat as a commerical dive boat 10 years and paid her off- Now if i look at the same boat online nearly 19 years later its worth about the same price i paid for it or even a little more- so if you keep her long enough and get her for a deal you may make money- but not in 2-5 years-

[Kettlewell]

"To be truly challenging, a voyage, like a life, must rest on a firm foundation of financial unrest. Otherwise you are doomed to a routine traverse, the kind known to yachtsmen, who play with their boats at sea--"cruising," it is called. Voyaging belongs to seamen, and to the wanderers of the world who cannot, or will not, fit in." --Sterling Hayden, Wanderer

[Doodles]

Originally Posted by Ram

I have made money on more than 1 boat, in 1992 I bought an Albin Trawler it had 124 hours on it,like new at less than half price of new- I used this boat as a commerical dive boat 10 years and paid her off- Now if i look at the same boat online nearly 19 years later its worth about the same price i paid for it or even a little more- so if you keep her long enough and get her for a deal you may make money- but not in 2-5 years-

You are forgetting about the time value of money and something called inflation. A dollar in 1992 is not the same as one in 2011.

[scook1]

Your estimates do sound pretty reasonable to me. Bear in mind that the rate of depreciation is exponentially negative. The older the boat and the less its value, the lower percentage you will lose on it. I think it is a great idea to be somewhat pessimistic when estimating. It will be better to bet on the low side and end up higher, than bet on the high side, and end up low.
Of course, if that is going to keep you from cruising, then forget it. Someone with your apparent financial savvy, or at least interest (No pun intended), will figure out a way to make it work. I have heard so few regrets from the cruising lifestyle, and so many from the non-cruisers.
Spencer

[Wand]

Originally Posted by Doodles

You are forgetting about the time value of money and something called inflation. A dollar in 1992 is not the same as one in 2011.

As a rule of thumb, I reckon a well-maintained boat retains its nominal value over time (except those bought new). That is, a used boat bought at market value for $x will have a market value of $x a decade later, provided the upkeep has been good and the general economy has enjoyed steady growth. That's the optimum imo.

So it's easy to see how even a best case scenario cannot stem the losses. But at least it's a better bet than the stockmarket

If the vessel is used commercially (ie, it actually makes coin) and tax advantages claimed, then that's entirely a different equation. That might be why Ram is a happy chappy.

[AfterHoursNLCT]

Wow...$400 thousand, That's 8 boats for me.......LL

[Aussiesuede]

Well let's compare to a luxury automobile:

A 2008 Jaguar XJ Super sold for $94,000.
Now at the 3-4 year mark, it's value is $41,000
In 2 years time, it's value will be approx: $26,000

Buy the boat that makes you happy, go cruising, and be happy you didn't waste your money on that Jaguar that can't get ya to Tahiti, nor is very comfortable to sleep in even if it could. Your loss at resale will definitely not hurt as much as with that luxury car purchase.

[barnakiel]

We got our boat 8 years ago and I can sell her today for nearly the same amt. Actually, since the ccy appreciated we would gain something.

b.

[CSY Man]

Money is nothing compared to living:

Bought my first boat in 1985 having no idea about returns or depreciation or tax advantage this or that or anything else except wanting to sail the warm waters.

Spent all my dough on the boat back then: $30K cash, 29 years old, no savings, no good job, no nothing.

Had the 3 best years of my life.

Looking at the numbers I bought the boat for $30k, put $30k into her and sold her for $30k.

Man, it is boats, not some damn financial investment or a secure retirement plan.

You want that, go see Bernie Madoff.

[Teeto]

Lovely Dean 44 for sale here in Australia. 3 years old and $639 thou.
Over 1 million to replace, so I can't see how you could get one for 400K. Good luck however!

[Doodles]

Several here under $400K:

Dean boats for sale - New and Used Dean for sale

[Dame.n.Jess]

I dont understand why you need to spend so much on the boat in the first place. Im not advocating buying a rust bucket and slumming it. Some seam to do this and be happy but if you so concerned about losing 100k (out of 400k) why not buy a boat worth 100k and put 300 in the bank, that way you will get some of your lost 100k back (unless you sink it without insurance) plus you will have a good amount of cash to come home to without the stress and hassle of hoping your boat sells for 300k.

just a thought, but it did seam logical.

P.S we spent 15k on our boat then 15k on a full refit and we are planning to sail for 5 years minimum on that rebuild. lost of money does not mean you get what you paid for.


Damien

[CSY Man]

but if you so concerned about losing 100k (out of 400k) why not buy a boat worth 100k and put 300 in the bank, that way you will get some of your lost 100k back

\

Good words, good advice.

Too many folks think big money gets you big boat with big happiness.

Not so, get a good simple boat, enjoy sailing and living, then save the excess dough for old age, or give it away instead of worrying about a boat lossing value.