Might or Might not have made the biggest Mistake of my life

[jaygatsby]

Long story short, got a divorce (no kids) age 33 last year, I got the cruising bug and spent about 6 months searching for a good boat without a budget in mind.

I lived on and worked on private yachts from age 18 - 25 where I met said ex wife.

Got lucky with a company I helped start and sold it late last year (said ex wife got nothing, thanks lawyers far and wide)

I made a few hundred thousand south of 7 figures and cashed out 2 weeks ago decided to pull the trigger compulsively on a 1989 Little Harbor 53 FSBO for about 390k, she is loaded and was recently refitted including new teak decks, standing, running rigging, sails, full electronics package, topsides repainted and interior all stripped and varnished. She was repowered in 2014 and also rewired. In 2015 had all her canvas and upholstery redone.

Surveyor convinced me I was getting the deal of a lifetime and the boat would easily list at 550 - 600k on the market as is.

I have about 410k left total with a income of about 3100 - 3500 a month I get from part-time (remote) consulting I do for the company we sold off.

Everything works and the boat is dry as a bone having been taken care of by a professional (full-time) Captain for the past 10 years.

Now I'm having buyers remorse. Ex-wife got the house, I have no assets right now. I'm thinking of selling off the remainder of junk I've acquired over the years. Leaving my place in Texas and just taking off cruising.

My worry is the money I have left is not enough to keep me sustainable for the long term cruising life. Now contemplating maintenance + dockage expenses (will need wifi to keep consulting/income) ect.... other expenses, unkowns ect... ect... ect....

I don't know what to do now. I think I've bitten off more than I can chew. I have a lot of life left at the age of 33 - no where near retirement age. I'm sure I could sustain cruising for a few years with what I have left plus the consulting income. But I'm afraid once I come to the end of that what will I do next..... work wise to maintain such a vessel... lifestyle .... ect....

What position are people at in life when they make the leap...? The questions and anxiety running through my veins is crippling me right now. My family thinks I've lost my mind completely but I have no real desire to do anything else at the moment. I know I'm very lucky and have a good opportunity with what little finances I have left but I don't want to be that guy... 5 - 7 years from now looking back and saying to myself (broke) (unemployed) living on a giant liability at age 40 saying what in the **** was I thinking!

Suggestions? Advice? heard of similar experience or had one like this? How dumb was I?

I've been sitting at my computer all day contemplating calling a broker.

Thanks in advance for any advice, suggestions ect...

[Don C L]

Wow, well, first of all welcome here. Second of all of course you could always turn around and sell it. If it is in the condition you say, you will probably break even. Now you do want to liveaboard, right? Every boat, whether it is sailing or not has its own cash flow requirements for maintenance, aside from slip fees etc. Before you give up on this boat, see if you can get a handle on how much that cash flow requirement is and if it is worth it as a home. You may be happily surprised. If you don't go anywhere for a while, and you keep the sun off of all sensitive things (like the whole boat!), it will stay as it is for quite a while. A boat, of course, is not a great investment, but it can be a wonderful way to live... which is what you were shooting for right? You are young, you haven't shot your whole wad, new opportunities will emerge and there are many ways to invest what remains in other smart ways or in a new company. You've done it before, you can do it again. Does the boat make you happy? Do you enjoy living aboard her? Those Little Harbors are absolutely beautiful boats, I think you probably did fine on the purchase. You should know though that I bet every new boat owner goes through some degree of "oh no, what have I done?" whether it is a $2,000 boat or $2M. You have probably spent a lot of time judging business investments and maximizing returns so suddenly here is boat reality... but you must factor in the joy the boat brings you, not so tangible or quantifiable perhaps, but still real and a potential wellspring of inspiration.
edit, you know I went back and read your first paragraph... wow, that's a lot of good stuff taken care of... I'm not an expert on what those boats go for, but I bet you'll do fine if you decide to turn around and sell it. But, wow, what a great boat!

[nuclear1]

You are in a state of shock.
This happens after bad things and even good things happen.
You seem to be thinking in extremes...you don't need to sail around until you are penniless and old. :-) There are less extreme options.
Take some time to relax so you can process things.
Don't make any more major decisions for at least six months.
You have money in the bank and a boat and part-time consulting income.
You are doing fine.

[JPA Cate]

Don't sell the boat, yet, but, fwiw, I think you need to take a good hard look at why you would want to punish yourself. You've bought a beautiful boat, an expensive mistress, in a sense (did the other Jay Gatsby do this? is this actually a troll?).

If self punishment is not a factor, possibly you really do want a sea change. The PO of your boat had a full time captain to take care of her maintenance. I bet you don't know how much he or she was paid? I bet you didn't run the numbers first. back to the first question: what are you punishing yourself for? If you figure that out, it may lead to the next choice, about the boat.

Or, maybe now you want to learn to do different kinds of work, more contemplative, and enjoy sailing. Do you sail? get seasick? enjoy being on the water? what is your sailing experience?

Never been?

It's not too late to learn. But do you want to, or was the purchase of the boat a big rude gesture towards someone with whom you are very angry?

Time will tell.

Your post was not a request for a specific type of help, which CF is better at. Sorry, but if I accept the legitimacy of your post, I think you have a whole lot to learn before you can make a reasonable decision relative to keeping the boat. And, if your story is in great unlikelihood true, seek counseling. Your "problem" is beyond the scope of casual internet thought for fixing.

If you want to keep the boat ( if you have it), post a reality based plan for how you might be able to do it, and cruise, for a while [only rarely does it become a lifetime lifestyle], I am sure the members of CF would be glad to give you input.

Ann

[Stormboy]

No it's not a mistake, unless you discover that you hate sailing..!!
My advice ( as Nike would say )....is ....Just Do It,
and when you are steering through the night with a warm breeze on your face, you will know a bit more, and if its too difficult to take your boat, then get to the Caribbean, Med or Whitsundays and rent a boat for a week or so, it might help if you take a sweet girlfriend along, and during this sojourn your questions should be answered.

[jimbunyard]

Uhh...Let's see, you're 33, unmarried, have almost half a million dollars you've probably already paid taxes on, an almost new, paid for, 53' classy sailboat and an annual income of 30-36,000? There're about 7.399999 billion people who'd like to be in your position...my first impression is this is some kind of obscure joke...but hey, idle hands and minds and affluence can produce strange results.

53' is a bit overkill for singlehanding, so find some one, or two, or three, to help, and sail her somewhere. If you find out you like the life but not the company, sell it and get a boat of a size more manageable for singlehanding. As they say, 'the possibilities are endless'. It's easy enough to go back to a day job...

[malbert73]

Is it the 1987 in RI? Matches in every way- a beautiful boat- enjoy it!

[UNCIVILIZED]

Originally Posted by jimbunyard

Uhh...Let's see, you're 33, unmarried, have almost half a million dollars you've probably already paid taxes on, an almost new, paid for, 53' classy sailboat and an annual income of 30-36,000? There're about 7.399999 billion people who'd like to be in your position...my first impression is this is some kind of obscure joke...but hey, idle hands and minds and affluence can produce strange results.

53' is a bit overkill for singlehanding, so find some one, or two, or three, to help, and sail her somewhere. If you find out you like the life but not the company, sell it and get a boat of a size more manageable for singlehanding. As they say, 'the possibilities are endless'. It's easy enough to go back to a day job...

Yep, the above is pretty much what ran through my mind as well. Especially since on that level of income the OP can head off cruising indefinitly on a boat that's a bit easier to care for. And by care for, I mean both in the fiscal sense, & physical sense. Since 50'+ boats tend to have expenses which fall into the category of "If you have to ask how much, then you don't have enough $". Plus keeping them up can quite easily be a full time job. That or more, if they're used much.

BTW, make sure to take care of those decks. Since if they start to leak, or get too dry, major issues will likely follow. And the boat's value will plummet.

[TwoLegged]

Originally Posted by Ann T. Cate

Your post was not a request for a specific type of help, which CF is better at. Sorry, but if I accept the legitimacy of your post, I think you have a whole lot to learn before you can make a reasonable decision relative to keeping the boat. And, if your story is in great unlikelihood true, seek counseling. Your "problem" is beyond the scope of casual internet thought for fixing.

I agree with Ann. It seems after two big life changes (divorce and sale of business) that you have made a big decision without thinking it through. You weren't dumb, but maybe a little impetuous. Now you have to do the thinking afterwards, and a good counsellor would be able to help you work through what you really want.

That's not any sort of disaster. It seems that the boat could be sold without significant loss if you needed (tho I'd be wary of placing too much weight on the surveyors valuation), so no way is the purchase any sort of irreversible step.

The big picture is that whatever you decide about the boat, you are way richer than most people on the planet and even than most people in developed nations, and you have an above-average income stream and some good skills. This is a good place to be. You have plenty of options, but need a good sounding board to help you work through them -- and a web forum isn't enough for that.

Back to the boat. You really need to do some sums on the costs of running it. Even the fixed costs like insurance and berthing are high on a boat of that size, and the maintenance will be expensive. Something as routine as a haul out will be serious money even if you just want a scrub, and new antifoul will be expensive -- that's too big a boat for a one-man DIY job.

Even a boat that's just been refit will still need ongoing repairs. Sails will tear, machinery will break, rigging will fail, electronics will rot, etc -- and on a big, well-equipped boat, the repair costs will be high.

I have never had to manage a boat that big, but others have suggested that it's wise to budget up to 10% of purchase cost as an annual budget for running a boat like this. You have run your own business, so you are obviously capable of doing the homework and figuring out what a realistic budget might be to run your boat for say 5 years.

If it does end up as 10% of purchase price, then you're looking at about $39K per year, which is pretty much the whole of your annual income. So you'd need to find some way of making the boat pay its way (e.g. by chartering), or expand your income in other ways, or draw down capital to maintain it, or reduce your costs by allowing the boat to degrade from its current top condition.

You are in a lucky position. Young, plenty of options, and rich -- tho maybe not quite as rich as you would like.

Now, here's some advice that I read recently which the economist David McWilliams passed on from Jack Welch, the former boss of General Electric:

There are three things to do in a crisis, or when faced with a challenge.
First, define your reality, not as you would like it to be but as it is.
Second, do something about it.
Third, face into the challenge and it won’t be as traumatic as you first feared once you have defined your reality.

You are still in the defining-reality phase. But you have taken the first steps to defining it, so you are on the way. Keep going!

[Crazy Talk]

The question at this point is unanswerable. What is your goal for the future? To never work again? To sail through the Carribean meeting women until the money runs out? To sail for a a few years then start another business?

You have enough to do one or more of those things but you would go about doing each of them differently from a financial perspective.

I know what I would do, but our circumstances are different. My advice to you is to take a few weeks, absorb everything, then formulate a plan.

[a64pilot]

This is just an opinion, but I think your after opinions anyway.
My opinion is you have too much boat first of all for a 36K a yr income, and its too big too.
The income, is it pretty much guaranteed for life? Or is it something that will likely go away?
It takes an unusual person to single hand, I would not like to do it, I would become lonely.
I'd investigate possibly selling that boat if you can come close to breaking even and getting something cheaper to own and maintain and easier to single hand.

Or, don't do anything for a year, try it and see how it works out for you, it may be fine, may in fact be sustainable and what you like.

Your cash should return about $1,500 a month in interest, which I think you will need, but would be better if you had a less expensive boat, and more money, in my opinion.

[dwedeking2]

I once made a decision at a crossroads like you're at and looking back I wish I would have taken a week or two off, flown somewhere without a phone and just figured out my next move. Instead, I went with my normal modus operandi, which is act now and decisively (which works a lot of the time).

I'm with most of the other posters that your boat choice was on the large size, mostly from a "cost / being able to sail it yourself" point of view. A smaller boat would give you a lower cost opening up your options on how to manage your money long term. I just finished up reading a book about a guy sailing around the Carribean, and he would really struggle with trying to line up crews to help him get from one location to another on his time schedule, where if he had a smaller boat he'd be able to make those trips and be where he wanted to be (which is what he eventually did, move to a smaller boat that is).

Luckily you have the means to adjust your plan if you want.

[rourkeh]

Gatsby, I do not see much of a problem.
You have to live somewhere. You have taken care of that by buying the boat.
For $390K you could not buy even a cheap condo, and then you still have maintenance, insurance, and utility bills every month. Same deal with the boat but cheaper.
You still have a part time job with minimal income so if you manage your money well you can afford to live reasonably well on that. And you have a substantial reserve fund in case of emergencies.
Take your boat and go cruising for a year and see what happens. Worst case you spend a small amount of your reserve cash over and above your income and have a great adventure. Then maybe decide what you want to do and go back to work.
Most North Americans of your age have no savings and a lot of debt and no chance of a great opportunity to go and live a dream like you have, you might be overthinking this.

[Tailwheel]

There's a saying: people tend to regret the things they didn't do, not the things they did.

[ol1970]

Well having been in similar position both at your age 10 years ago, and once again in the same position 10 years later I can give you the following advice:

You are young talented and at the peak years of being hungry and busting your a$$ to get stuff done. You had a successful run building a company, got some loot at the same time of having a negative event happen (divorce). Instead of cashing out I doubled down and spent a few more (10) years building and I'm damn glad I did, I "retired" at 43 but it doesn't mean I won't do activities in the future that bring me income, but they will most certainly be on my terms. If you get out of the game for 2-3 years your desire and ability to get back in will be greatly diminished.

Money, you don't have nearly enough. You consulting gig through your old company will absolutely end. You can replicate it or even grow the number doing another gig, but at 33 you are fortunate enough to have a long way to go in life, you have to remember that the journey is the fun part. Here is a very simple rule of thumb that I use for people in their 30's and 40's...your home (in this case) your boat should never constitute more the 20% of you net worth. I couple that with not having depreciating assets be more than 5% of my net worth. Ok so lets say because you are living on your depreciating asset you can bump that up the number from 5% to 10 or 15%. Based on the numbers you have given us, you should be living on a $100k boat max.

Sell the boat, get something super easy to singlehand if that's your passion, live on it in an area where you can keep you career going and maybe try a hybrid lifestyle where you can cruise a couple months a year, while still adding to your future retirement pot. Barring external issues that we are not aware of (history of health issues type stuff), simplify your life and I would bet you'll be a ton happier! Good luck.