Long Term Boat Retirement Plan - Are These Numbers Right?

[sailorboy1]

If you don't wish to be able to sail NOW and are instead only interested is getting a boat to cruise once you retire it makes no sense to buy a boat before retiring. So my input is to save and invest your money and wait till you are retiring to get a boat.

[nautical62]

Originally Posted by skipmac

So are you saying that you were able to realize a positive, net income during those 7 years, over and above the down payment and monthly payments for the boat? Plus you got free time on the boat on top of that?

The other question is how much was still owed on the boat at the end of the Moorings contract but I guess that would totally depend on how much down and the terms of the financing the buyer makes with the lender.
.

They often advertise (sell) the idea of paying 25% down, and making payments which at the end of 5 years, allow one to have paid off about 50% of the boat and made a small positive monthly income.

What I chose to do instead was structure it so that the guaranteed income paid off my loan, so I owned the boat outright at the end of the contract period. I'm glad I went that way.

My boat was a smaller monohull costing 120K. I ended up paying about 60K to own it outright (The other half being paid for with guaranteed income) and on top of that got to use it for 7 years with no dockage, insurance or maintenance costs. I ended up selling it instead of continuing to cruise it, but per year it was much cheaper than either owning a similar boat not in charter or chartering would have been. The value of the boat at the end was roughly equal to what used boats were selling for, so if one is comparing that to just buying a used boat 7 years later, I basically got 7 years of chartering at almost no cost.

Originally Posted by skipmac

If you would be spending a lot on charters during the contract period that would also make the deal a lot sweeter. But if you are chartering then you can't also count the savings for insurance, dockage, maintenance and other expenses that come from owning a boat

True I was was trying to compare buying a boat in charter management and then keeping it to two separate scenarios: 1. Paying to charter for 5-7 years, and then buying a used boat. 2. Buying a boat, not putting it in charter, but paying insurance, dockage, maintenance, and having no charter income.

I can see where it sounded as if I was rolling both of those ideas into one in my attempt to not get too long winded.

[nautical62]

Originally Posted by BlueBuddha

...The one issue that I need to account for is the reffit that the charter boat would require to make it into liveaboard. That may nullify the financial benefit of the charter program...

Good point. Similarly, how does the make, model and price of 5 year old charter boats compare to other cats you might purchase? I was speaking to buying the exact same boat upfront, and enjoying it in charter management. vs. buying the same boat later.

In reality, you may be happy with some other cat, half the price of most ex-charter boats, and that may change everything.

That's precisely why I didn't upgrade to a cat when my contract ended. There are some Lagoons and other cats on the market for notably less than than what 5 year old Moorings cats are selling for, that I'd be almost as happy with. Factoring in that reduced price washed out the savings of charter management for me.

[navy davy]

look into investing in a 770 insurance plan, tax free, builds intrest at a better rate than a cd, cash it in and pay no income tax on the income from intrest/total value. Ask your investment pro. about them , also see some info on the web. Both pros and cons will be posted. Compare to a 401k.

[Mystktravler]

You are wasting time and effort planning. The only constant in the universe is change. Crunch numbers till you are blue in the face...doesn't reflect reality. Fractional ownership, whether it's boats or aircraft, amounts to someone smarter than you taking your money. Either you can afford a boat or you can't. They whip on "your" investment until it's worthless and make you buy it from them when they are finished. There is no way to know what will happen in your life over the next ten years, disciplined or not! You or your significant other could drop dead, or worse have a stroke and require long term medical care. If your plan is to cruise when you retire save the money to buy a boat and do it...when you are ready to go. Crew on a few blue water trips with your wife see how you like the lifestyle...you may be in for a shock. Talk is cheap...dreams are for dreamers...the answer is always easy...either you have the financial means AND the technical skill or you don't. It's not rocket science sparky!


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[BlueBuddha]

Thank you for your very very kind post. I will definitely take your advice to not waste my time and effort planning because I may drop dead or have a stroke.

[Mystktravler]

Yes , I love how you focused on the key points...intuitive....that's exactly why you are wasting your time and mine. Oh well.


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[SwissMocha]

Originally Posted by BlueBuddha

Thank you for your very very kind post. I will definitely take your advice to not waste my time and effort planning because I may drop dead or have a stroke.

I agree in general with the fractional ownership part, as I stated before. But the planning is really part of the fun, at least for me it is!

[Mystktravler]

http://www.cruisersforum.com/forums/...d.php?t=127123 read this...


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[Greenhand]

Personally, I would find a way to take cheaper vacations. My parents' take $10k vacations, but their retirement goal is to spend my inheritance before I can get my hands on it.

[BlueBuddha]

It's the unnecessary condescending and dismissive tone that make people ignore what you say and focus on how you say it. I bet I'm not the first one to tell you that. But some people just can't help it. Oh well.

[BlueBuddha]

Originally Posted by Greenhand

Personally, I would find a way to take cheaper vacations. My parents' take $10k vacations, but their retirement goal is to spend my inheritance before I can get my hands on it.

Ha Greenhand! Your parents are wise people :-). We decided to not have kids so that we didn't feel guilty about spending their college fund in exotic vacations

[sailorboy1]

Originally Posted by Greenhand

Personally, I would find a way to take cheaper vacations. My parents' take $10k vacations, but their retirement goal is to spend my inheritance before I can get my hands on it.

So in other words they want to spend THEIR money and not give it to you.

I agree with their plan.

[Weyalan]

Bear in mind that 99.83% of the time, a boat is a depreciating asset (and 82.1% of statistics are invented on the spot ) If you are planning to retire onto a boat (nothing wrong with that) I'd be looking at putting money into where it will grow until you are ready to purchase, throw the lines and go. Owning a boat for 5 years before you are actually properly using it is not what I would be doing. Just my 2c worth.

[rognvald]

Buddha,
Compliments on your ambitious goal for the future. Nothing worthwhile happens in life without a dream and a plan. However, life is a delicate and unpredictable balancing act where , at times, we lose the ability to control our destiny: illness, death, infirmity, financial ruin, relationship problems are a few examples. These are factors that cannot be predicted and are impossible to factor into the human equation. They are part of the human condition. Remember the lines of the Scottish poet Robert Burns from his famous poem "To A Mouse:"


"The best laid schemes of mice and men,
Often go awry."

Good luck and much success in accomplishing your dream.