How much can I responsibly afford to spend?

[D-Vector]

Hello all, new registrant here. Like many on this forum, I have dreamed of living aboard a multihull for quite a few years now, and I have worked towards the day that I leave the rat race and become a cruiser. To this end, I have prepared financially by saving money and by developing a passive income that can support a cruising lifestyle.

Once I take the jump, my plan is to cut my teeth in the Caribbean for at least a year before setting sail for other destinations. I'm writing today because I would like your opinion on whether or not I am financially prepared to take the leap, and for your thoughts on how much money I can responsibly spend on a boat, given the up front and ongoing operating costs.

In sum, here's where I stand financially. Excluding retirement funds, I have $1.2M in the bank, a passive income of conservatively $120K / year, and I expect annual increases of at least 5%. I am 47 years old and plan to live the cruising lifestyle for at least a few years.

At this point I don't know anything about the vessel I will purchase, other than it will be a multihull. I figure that I need to know how much I can afford to spend before I seriously consider any options.

Thanks for considering my question, and I look forward to your feedback.

Kind Regards.

[Sandero]

no... you need $5MM in cash and an annual income after taxes of $400K

[jdazey]

I think we need to know a lot more about what kind of boat you want and what lifestyle you hope to enjoy afloat. Lots of people have gone cruising on a lot less, and for some us being responsible is less important than maximizing what few years we may have left.

[Lizzy Belle]

Originally Posted by D-Vector

I'm writing today because I would like your opinion on whether or not I am financially prepared to take the leap,

Welcome to CF!

Well, to be honest .. I don't know you well enough to answer that question for you.

There are people happily sailing around the world on a $500 / month budget and a 28' boat. There are people sailing around on 45' boats with a $3k / month budget and still feel more money and a bigger boat would be nicer.

In other words: it depends completely on what you (and any crew coming with you) need to be happy. Some of us don't need much, others need a floating apartment and pretty much unlimited funds.

Some are happy to take a bus and cook dinner aboard, others want hotels, rental cars and restaurants. Some keep their own boat afloat, others have it hauled out and worked on by others while they fly back home. Etc. etc. etc.

Either is fine - there is no right or wrong here, just different people needing different circumstances to be happy and comfortable.

What I'm trying to say: your personality won't change once you sell the house and move aboard. So figure out what you need, and if you can afford that.
If you're happy with very little now, you'll be happy on pretty much any boat with any budget. If not, you won't be while cruising either.

In the end, we all get to watch the same sunsets and anchor in the same places. Any boat & budget can give you that. Whatever else matters to you, what more you need to make you feel happy & content is completely up to you.

With even a quarter of your current budget, I would have been half way around the world by now and never look back. But that's me - I'm the "go small, go now" kinda gal because I learned 'later' doesn't happen for everyone, and I don't need a big boat to be happy -- on the contrary - I don't need or even want the headache

You obviously want more "security" (for whatever that's really worth in life) and whatever else you're waiting for. That's fine too, but only you can answer when you have enough stuff and money to feel comfortable enough to leave.

Once you know (if you don't already) why you're still saving up and waiting, and not out there sailing yet, you'll have the answer to your question.

[boatman61]

As much or little as you can comfortably afford to lose..

[WindwardPrinces]

"How much can I responsibly afford to spend?"

That's a financial question, not a cruising one.

I see that question as related to "How much do I need to cruise?", to which the answer is "All you've got."

Like someone said above, you can get by on $500/month and a 28 foot boat, so anything over that is gravy.

[TheThunderbird]

You will come up spending 80% for the boat, 20% on yourself, plus any extras of personal use
It much depends on how fast you FORGET your spending habits...

In that, a limited space available much helps....

Also, you seem to be new to sailing... start with a charter boat, or as crew to check different sizes of cat
Do not spend more than 100k for boat before being sure this is your lifestyle to come

As you find a woman, any plans will be due to change. I hope she never reads here how much you have left aside :-)

All in all.... 93% of people would envy your financial status, but are already afloat

[Liam Wald]

Originally Posted by Sandero

no... you need $5MM in cash and an annual income after taxes of $400K

That will never do. Sailing is very expensive indeed. More like $10MM and $750 a year might do it. But you better know how to catch fish if you plan on living that way very long.

Rally?
I am guessing by this guys post that it wouldn't be very long at all before he is separated from his money no matter how much he has!

Troll alert!

[Lizzy Belle]

Originally Posted by WindwardPrinces

That's a financial question, not a cruising one

Not really ... the money is there, and plenty of it. Yet the OP is still on land, waiting.
Money -or a lack thereof- isn't what's stopping the OP, but only he knows what is

The answer to the real question being asked here is whatever the answer is to "what are you waiting for?".

[Redreuben]

Originally Posted by Lizzy Belle

Not really ... the money is there, and plenty of it. Yet the OP is still on land, waiting.
Money -or a lack thereof- isn't what's stopping the OP, but only he knows what is

The answer to the real question being asked here is whatever the answer is to "what are you waiting for?".

Totally agree, if only !

[WindwardPrinces]

Originally Posted by Lizzy Belle

Not really ... the money is there, and plenty of it. Yet the OP is still on land, waiting.
Money -or a lack thereof- isn't what's stopping the OP, but only he knows what is

The answer to the real question being asked here is whatever the answer is to "what are you waiting for?".

Actually, you're agreeing with me. It's not a cruising question, but was put in the form of a financial one.

[Redreuben]

Originally Posted by WindwardPrinces

Actually, you're agreeing with me. It's not a cruising question, but was put in the form of a financial one.

Ok, I agree with you too !

[boatpoker]

The question is irrelevant. One can always find a reason not to go. The kids are in university, mom's in a nursing home, dad's going to be joining her in a couple of years, the dog is fifteen we have to wait til' he dies, If I work for another year it'll add thirty bucks a month to my pension.

Keep coming up with excuses and one day you will wake up with a genuine reason not to do it. You only get one shot at life ..... Just Do It.

[Lizzy Belle]

Originally Posted by WindwardPrinces

Actually, you're agreeing with me.

Not agreeing or disagreeing with anyone

What I'm trying to say is that the OP's question isn't about money. Something else is keeping him from cruising, and whatever it is, is what he needs to sort out so he can actually get himself on a boat and sailing.

[D-Vector]

First, thanks for all the responses - whether helpful or snarky, they all serve to inform in one way or another.

A little more about me, briefly. Yes, I am new to sailing - I fell in love with it years ago when working in the Bahamas, where I rented a Prindle 16 beach cat every weekend. Since that time, I have rented sailing vessels in numerous locales, usually small daysailers. Over the past several years, I have chartered cats in the US and British Virgin Islands, and have taken a week-long sailing course. I know that I am extremely green, but everyone needs to start somewhere, and my current location doesn't afford many sailing opportunities, so I do the best I can.

Why now? It turns out that I do project work, and my latest job, which I have been working on for years, is coming to an end in 2016. That and the fact that I am getting a little older are motivating me to consider the cruising lifestyle now.

I should note that I have no love loss for my profession and frankly do not intend to continue in my field beyond 2016 no matter what I end up doing, cruising or otherwise. As such, I have been preparing to move on with my life for years, and again, it finally feels like now is the time.

I agree with TheThunderbird who suggested chartering more boats or serving as crew before taking the plunge. This is great advice, and something that I have been considering before purchasing a boat – and frankly, is the approach I will likely take.

Regarding my original question, let me see if I can elaborate. What I’m trying to determine is the maximum amount I should consider spending on a vessel, including acquisition and restoration/refurbishing costs, if any are necessary. I’m not saying that I would necessarily max out my budget, but what I'm trying to avoid is setting my sights on something that I cannot responsibly afford, as I would like to be realistic when considering my options. Once I have a budget in mind I can start looking, but at the moment, I don't know what my budget should be, and that is the root of my question. Further, knowing what I can afford will also be instructive as I decide how to move forward at this pivotal point in my life, as it will give me an idea of how I can afford to live while cruising.

Finally, as WindwardPrincess said, this is, “a financial question, not a cruising one.” I agree, but at the same time I’m guessing that finance and budgeting are an important part of cruising. With that said, if I’ve posted my question in the wrong area of the Cruisers Forum, please excuse me.

Thanks again.