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Old 28-10-2014, 12:42   #46
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Re: $3,000/mo cruising budget planned

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Originally Posted by Ndavies View Post
There is a huge cost of not going. And that is that things change and you may never go. I was fortunate and went at age 52/53. But I did a 7 month sabbatical. My biggest problem........and maybe biggest mistake, was going back to work! We met amazing people from all walks of life. I would say the common theme was that most had left it too late and regretted that. The Canadians have this figured out better than the Americans - they tend to start doing this in their early 50s. Of course I am generalizing - but you tend to be better equipped for the physical side of things in your 50s than 60s.
Your story sounds like ours. We're leaving again in May, 2015 and we're planning on staying a lot longer this time. We will be 57 and 56. It's a lot better this time. Instead of saying "I don't see how you will be able to do that," people now have to say, "I don't see how you will be able to do that.... again."
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Old 28-10-2014, 13:09   #47
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Re: $3,000/mo cruising budget planned

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So how much of that is cash and how much 401k? In a regular ol' savings account drawing 0.05% interest $200K can get you $10K/yr in interest (or $833/month) giving you over 1/4 of your budget.

I'm starting to understand why people can not come up with a cruising budget
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Old 28-10-2014, 13:15   #48
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Re: $3,000/mo cruising budget planned

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I'm starting to understand why people can not come up with a cruising budget
Between the math you are responding to and the "what about emergencies?!" I wonder how people are living on land.
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Old 28-10-2014, 13:30   #49
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Re: $3,000/mo cruising budget planned

So how much of that is cash and how much 401k? In a regular ol' savings account drawing 0.05% interest $200K can get you $10K/yr in interest (or $833/month) giving you over 1/4 of your budget. If there's an emergency you can dip into the sum of it.

Math correction: replace "0.05%" with "0.5%"
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Old 28-10-2014, 13:50   #50
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Re: $3,000/mo cruising budget planned

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Originally Posted by GuidoY View Post
So how much of that is cash and how much 401k? In a regular ol' savings account drawing 0.05% interest $200K can get you $10K/yr in interest (or $833/month) giving you over 1/4 of your budget. If there's an emergency you can dip into the sum of it.

Math correction: replace "0.05%" with "0.5%"
It's NOT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

0.5% (half a percent) is 0.005 and on $200k that is $1000

so if you know a "regular ol' savings" account that instead pays 5% please let me know (PM it to me as I don't want to cause a bank run)

I have over $100k in a "regular ol' savings" account and I make more each month by using my credit card and taking the cash back than I make each month in interest.
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Old 28-10-2014, 14:02   #51
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Re: $3,000/mo cruising budget planned

I'm always confused, are we talking before or after taxes?

Say I retire and live on SS, but my Wife keeps working, pushing us into a higher bracket.

I would like to know what the basis is.
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Old 28-10-2014, 14:09   #52
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Re: $3,000/mo cruising budget planned

I'd really recommend reading chapter 2 of Beth Leonard's The Voyager's Handbook: http://www.amazon.com/Voyagers-Handb...dp/0071437657/

It has detailed budget breakdowns, equipment maintenance and refitting costs, and compares 3 canonical couple's / family's spending levels: "The Simplicities", "The Moderations, and the High-Lifes.

Keep in mind most people don't want to cruise forever - some do, but that's by far the rare exception. So you probably shouldn't plan on being cruising every year till you're dead, but rather a few years on water, a few years on land, etc.

So the question of whether you can retire comes down not to your cruising expenses but to your land expenses. Land expenses usually far exceed cruising expenses, especially when you consider healthcare as you age.

Your retirement savings sound a bit low to me if you plan to live on land some of the remainder of your life and assuming you have no other assets (like a fully paid off house), but I'd still say the time to go is now. You're not getting any younger (54 it sounds like, given you're 8 years from the SS earliest withdrawal date of 62). And as The Voyager's Handbook points out, many people who wait too long find that an unexpected and unfortunate health issue prevents them from realizing their dream.

It's good to have a backup plan - the book discusses some options for how people find ways to make money while they cruise. Do you have skills from your career that could be monetizable if you had to go back to earning money 5 years later? Maybe not the same job or rate of pay but enough to fund cruising.

If you're interested in reducing your cost of living (on land or sea), which will stretch your savings far more than most people realize, while still leading a happy life, I recommend reading the Mr Money Mustache blog: Mr. Money Mustache — Early Retirement through Badassity
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Old 28-10-2014, 14:10   #53
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Re: $3,000/mo cruising budget planned

Yup... Regular old savings account make almost no money per year... Not sure how the math got messed up above, but..

$200,000 x 0.5% per annum = $1000/year or $83 and change a month..

I'm lucky.. My savings account here in Canada pays 1.25% per annum.. Still quick math..

$200,000 x 1.25% per annum = $2500/year or $208 a month

Although nothing to sneeze at, I'm pretty sure the most frugal couldn't cruise on $208 per month..
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Old 28-10-2014, 18:28   #54
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Re: $3,000/mo cruising budget planned

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Big difference though between 3K and 4K.

Said another way, do you living expenses on land roughly equal those on a boat?
Mine I see as being a whole lot less?

$3k vs. $4k - Doesn't matter. It's not a contest to see who can do it cheapest. If I don't spend $4k - hooray! But my track record suggests I spend everything I have along the way -

Many of these threads have "lots" of overthinking in them.

If you retire on land you will have costs. If you own the house you will have maintenance.

If you can retire on land you can retire on a boat.

If you own the house rent it out. Bonus income.

If you are "afraid" of running out of money, you will always be afraid.
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Old 28-10-2014, 19:11   #55
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Re: $3,000/mo cruising budget planned

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I think you are making a big mistake by first thinking that social security will continue to pay at the level you put down and second only thinking there will be 2% inflation per year moving forward. That being said, I still think you should go and just find a way to make it work.

So here is how I see our budget breaking out:
  • Food - $100 per week for $400 a month;
  • Insurance - $200 per month;
  • Fuel - Dingy and big boat $200 per month
  • Eating out - shouldn't but I am sure we will $400 per month
  • Entertainment - local travel, movies, etc. $400 per month
  • Cell Phone - including some data $100 per month
  • Boat Maintenance - won't be this every month of for budget $200 per month
  • Moorings/Slips - $200 per month
  • Annual costs split out per month (flying home once a year, storage while we fly home, birthdays and holidays, excise tax, USCG fee, vet bill for the dog, mooring fee for home port) $350 per month
  • Alcohol - $100 per month
  • Laundry - $20 per month
  • Water - (if we don't add a water maker) Avg. of $0.25 per gallon for 200 gallons (50 gallons per week) for $50 per month
So that's $2,420 per month. We have been budgeting based on $2,500. Our plan to be as cheap as possible when we get out there and hopefully be less than half of this. We would rather budget high and work to be low than budget low and work to meet it. It's a mental thing and everyone is different.

Just cutting our eating out and entertainment in half and going a little less on the alcohol and cell phones and we can be below $2,000. That's a savings of over $5K per year.

We also know that our not working is only temporary. A couple of years probably. After that we will have to go back to work.

What is the breakdown of how you got to $3,000 per month?
I've been cruising 7 months/yr. for several years. The budget above is workable and maybe a bit generous. I'm in the lesser and greater antillies where food,booze and entertainment are very inexpensive. We have no dockage and use 10-15 gal. of fuel a month and I have a emergency fund for the big stuff if it ever happens. This should be at least $20K. We should start a web site for this type of info. I'm sure it would benefit a lot of sailors.
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Old 29-10-2014, 07:00   #56
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Re: $3,000/mo cruising budget planned

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$3k vs. $4k - Doesn't matter.
You kidding? The difference between $3k & $4k per month of spending is a HUGE difference in lifestyle possibilities.
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Old 29-10-2014, 07:12   #57
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Re: $3,000/mo cruising budget planned

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Originally Posted by JK n Smitty View Post
I think you are making a big mistake by first thinking that social security will continue to pay at the level you put down and second only thinking there will be 2% inflation per year moving forward. That being said, I still think you should go and just find a way to make it work.


So here is how I see our budget breaking out:
  • Food - $100 per week for $400 a month;
  • Insurance - $200 per month;
  • Fuel - Dingy and big boat $200 per month
  • Eating out - shouldn't but I am sure we will $400 per month
  • Entertainment - local travel, movies, etc. $400 per month
  • Cell Phone - including some data $100 per month
  • Boat Maintenance - won't be this every month of for budget $200 per month
  • Moorings/Slips - $200 per month
  • Annual costs split out per month (flying home once a year, storage while we fly home, birthdays and holidays, excise tax, USCG fee, vet bill for the dog, mooring fee for home port) $350 per month
  • Alcohol - $100 per month
  • Laundry - $20 per month
  • Water - (if we don't add a water maker) Avg. of $0.25 per gallon for 200 gallons (50 gallons per week) for $50 per month
So that's $2,420 per month. We have been budgeting based on $2,500. Our plan to be as cheap as possible when we get out there and hopefully be less than half of this. We would rather budget high and work to be low than budget low and work to meet it. It's a mental thing and everyone is different.

Just cutting our eating out and entertainment in half and going a little less on the alcohol and cell phones and we can be below $2,000. That's a savings of over $5K per year.

We also know that our not working is only temporary. A couple of years probably. After that we will have to go back to work.

What is the breakdown of how you got to $3,000 per month?
There are few items different (we spend more on marinas and less on eating out, nothing on water) but otherwise this is pretty similar to out budget.

$3k/month is very doable including budgeting for repairs and maintenance. The only item of concern I would see is an exit plan. At some point most people are physically unable to live on a boat and 20-30yrs later the boat likely has minimal resale value. Not a deal killer but something to be aware of.
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Old 29-10-2014, 07:44   #58
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Re: $3,000/mo cruising budget planned

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$3k vs. $4k - Doesn't matter. It's not a contest to see who can do it cheapest. If I don't spend $4k - hooray! But my track record suggests I spend everything I have along the way -

Many of these threads have "lots" of overthinking in them.
I agree with Dan.

The difference between $3,000 and $4,000 per month will probably have very little effect. You certainly wont have money in the bank at the end of the year.

My year this year has been saving up for davits and a whole series of things, big haulout etc. If I have an extra $1,000 per month the stuff would have been done more quickly, and I cut my list, but my year would still have been a non active cruising year.

On $1,000 per month you dont eat out
On $2,000 rarely and cheaply
On $3,000 you can select any main course
On $4,000 you can have desert too.

So its not a huge difference. Most of your budget goes in other things anyway, food and booze are not negotiable, they are necessities.
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Old 29-10-2014, 07:58   #59
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Re: $3,000/mo cruising budget planned

I can't see where looking at what others say they spend is all that helpful. Someone says Hay I cruised on XXX/month for years and lived great. Then you see they were in a single cheap country the whole time. If that is your type of cruising then fine. If you want to cruise to lots of countries, then those numbers just don't apply. I saw another cruisers monthly budget listed online. Lower end costs -- they just didn't include the $12k repower after year 3.
You can make what you have work just fine as long as you have the desire to keep going, the skills to fix the boat and you go to places that a)are in your price range b)are places you want to see, i.e. keep you interested.
The decision to leave is just that. It is a commitment for a year, or 2 years or whatever. You will make many more decisions down the line.
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Old 29-10-2014, 08:12   #60
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Re: $3,000/mo cruising budget planned

First, I meant the difference between funding 3k a month for perpetuity and 4k is a big difference, if 4K is required, then that is a whole different problem.

Looking at other is helpful in that you can get an idea of how they are living, by how much they spend on different items, and from that get a rough estimate on costs.
It is like living on land, I think almost exactly like it, If you live in a big expensive house and buy a new SUV every other year, then that cost is way more than people that don't, but you can determine the life style based on car / house payment, insurance costs etc.

And at least for me, it's not a year or two, once I quit working, it's for life. Yes I will eventually be driven back on land, but not back to work.

I've come to a conclusion that assuming a decent 40ish ft mono, you should be able to do it frugally for a couple for 2K a month, but you are living frugally, but not in poverty. For me to not feel poor, I think it will take 3K a month, for others it may take more or less.

Only way to know is to try I guess.
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