Make Money While Cruising - List

[Certeza]

Originally Posted by ImaginaryNumber

I'm having trouble understanding example #3.

1000 tosses of a weighted coin. Expectation that 550 will be heads and 450 will be tails.

Credit of $1.25 for win, debit of $1.00 for loss.

Always call 'heads'

(550x$1.25) - (450x$1.00) = +$237.50

What am I missing?

(Just to keep this somewhat boating related, is this anything like the capsized monohull vs multihull debate? )

Sorry, typed it quick. Meant payout for winning with the less likely outcome is 1.25. Choosing the less likely outcome still has a 1.25% edge.

Point is, quantified expectancy is the difference maker. This concept carries through many different arenas. It is the core principle of the insurance world, and permeates the banking and finance world as well. Imagine an insurance underwriter just arbitrarily assigning random premiums to people without asking them anything about their circumstances. How long would they stay in business? Same goes for Investments and trading.

[jostalli]

Originally Posted by Vino the Dog

Thank you folks for explaining why stock market, futures, and all other names you call it, are without question, gambling... and nothing more.

Just like blackjack, craps, and poker, there are "systems", and for each system, proponents who can string a pseudo-logical sequence of statistics that prove the system player is not gambling.

This thread has been pretty much taken over by gamblers, and I wonder how many of them even have a boat, and of those who do, how many leave the dock for more than a couple weeks at a time?

I liked the thread better when there were cruising sailors thinking about how to make a few bucks to keep cruising, than now, when it seems like mostly fairly affluent business men hoping some day to strike it rich enough to buy a boat.

Whoa, buddy. Why so negative? Perhaps instead of complaining about the thread you could offer better ways to "Make Money While Cruising"?

[ArtM]

Originally Posted by jostalli

Whoa, buddy. Why so negative? Perhaps instead of complaining about the thread you could offer better ways to "Make Money While Cruising"?

Unfortunately the world is now so closed to the global traveler that it's almost impractical.

Here's a new thread idea: "How to earn money legally while in foreign countries".

I've seen what the Africans have to do in Barcelona, and they're just trying to survive.

It's illegal to work for money in most countries (that I know of) unless you have a visa. I'd love to know the exceptions.

[ArtM]

Originally Posted by Sondor

Anyone who argues against the fallacy of the Martingale system is missing a beat...

Do you think someone is arguing against it?

I'm only clarifying what the fallacy is. Also, I'm pointing out the "positive expectancy fallacy" which is the fallacious belief that you can be saved from total failure through positive expectancy.

The reality, though, is that this kind of analysis can be applied to ALL ventures in life. No matter how skilled or clever the person, there is always a "finite possibility" that everything he attempts will fail due to nothing more than bad luck.

In real life we try to mitigate that by limiting our exposure to "bad luck". The same is true for all investment systems, which is the only thing that actually separates it from "gambling". Gambling, assuming the player has maximized every edge, has a fixed rate of return. It cannot be improved through any measure of care, analysis, or education.

And that returns us to the original purpose of this thread, which is about how to make money while cruising with the best possible expectancy and minimizing the likelihood of total failure.

[ArtM]

Originally Posted by Certeza

Sorry, typed it quick. Meant payout for winning with the less likely outcome is 1.25. Choosing the less likely outcome still has a 1.25% edge.

Point is, quantified expectancy is the difference maker. This concept carries through many different arenas. It is the core principle of the insurance world, and permeates the banking and finance world as well. Imagine an insurance underwriter just arbitrarily assigning random premiums to people without asking them anything about their circumstances. How long would they stay in business? Same goes for Investments and trading.

What you're missing is that, even with a weighted coin, there is a specific probability (which is not zero or infinite) of losing on every single turn until you are out of money. The only solution is to get more money, or to bet such a small part of your stack that the probability gets so very, very tiny that the likelihood of failure becomes "nearly" zero (but not zero), which also has the effect of limiting your gain on each flip.

You're also missing that you will not be able to flip that coin as much as you would like. You will be limited.

Also, you're leaving out that if you start with $5.00, and lose the first 5 flips, you are out of the game. You do not get to have your other 995 flips.

Also, you seem to be assuming that there is a 100% chance of winning at this game, even if you discount the other issues. That is nowhere close to being true. To come out ahead you must win at LEAST 445 of the flips. I won't attempt the math here, but the likelihood of winning FEWER that 445 flips is not extreme. Though the odds are in your favor, there is still a good possibility of total failure - meaning losing all your money, or worse.

Insurance companies can and do go out of business. The bank failure was the result of a total failure of positive expectancy. They needed a cash infusion to ride out the statistical anomaly, which they got, and they recovered the cash very quickly after that. But the statistical anomaly did happen, against all calculated odds, and it can happen again.

The insurance company cannot write as many policies as it wants. The bank cannot make as many quality loans as they want. The gambler cannot pull the free slot handle as often as he would like. The blackjack counter cannot make the dealer turn hands at an unlimited speed. The Martingale player cannot spin the wheel any faster than the casino will allow.

The cruiser cannot work any more than the law, his health, or the constraints of time and space will allow. If he fails to get work often enough, he will not be able to pay his slip or repair bills and he risks total failure. His only options are to minimize his risk of repeated failures (to get paying work) by obtaining a wider range of skills and work qualifications, and to maintain a higher cash reserve to account for the anomaly of possibly going for several months with little or no paying work.

[Certeza]

Originally Posted by ArtM

What you're missing is that, even with a weighted coin, there is a specific probability (which is not zero or infinite) of losing on every single turn until you are out of money. The only solution is to get more money, or to bet such a small part of your stack that the probability gets so very, very tiny that the likelihood of failure becomes "nearly" zero (but not zero), which also has the effect of limiting your gain on each flip.

You're also missing that you will not be able to flip that coin as much as you would like. You will be limited.

Also, you're leaving out that if you start with $5.00, and lose the first 5 flips, you are out of the game. You do not get to have your other 995 flips.

Also, you seem to be assuming that there is a 100% chance of winning at this game, even if you discount the other issues. That is nowhere close to being true. To come out ahead you must win at LEAST 445 of the flips. I won't attempt the math here, but the likelihood of winning FEWER that 445 flips is not extreme. Though the odds are in your favor, there is still a good possibility of total failure - meaning losing all your money, or worse.

Insurance companies can and do go out of business. The bank failure was the result of a total failure of positive expectancy. They needed a cash infusion to ride out the statistical anomaly, which they got, and they recovered the cash very quickly after that. But the statistical anomaly did happen, against all calculated odds, and it can happen again.

The insurance company cannot write as many policies as it wants. The bank cannot make as many quality loans as they want. The gambler cannot pull the free slot handle as often as he would like. The blackjack counter cannot make the dealer turn hands at an unlimited speed. The Martingale player cannot spin the wheel any faster than the casino will allow.

The cruiser cannot work any more than the law, his health, or the constraints of time and space will allow. If he fails to get work often enough, he will not be able to pay his slip or repair bills and he risks total failure. His only options are to minimize his risk of repeated failures (to get paying work) by obtaining a wider range of skills and work qualifications, and to maintain a higher cash reserve to account for the anomaly of possibly going for several months with little or no paying work.

Actually I'm not missing any of those points, and I can do the math. The probability of profit given 1000 tosses in the referenced example is roughly 64% if you called tails every time and got a 1.25 payout. Increasing to 10,000 tosses increases the probability to almost 90%.

Nobody here is claiming guaranteed profit. In fact, I joined the discussion only to point out the risks involved with various investment methods. I've simply defined the difference between "gambling" and calculated risk taking. Keep in mind that you are talking to someone who does these calculations for a living. I'm very aware of even the smallest risks involved. You are correct in that the risk will never be zero, but you seem to suggest that in order to get the risk to a very low number the potential for gain must approach zero as well. That is not true. Again, expectancy is the difference maker.

When we perform investment analysis, we use a certain risk threshold across the entire portfolio. For example, you might spec a 10% VaR (value at risk). That is the maximum allowable peak-to-trough drawdown. That determines account values and position sizing. From there we determine the frequency at which such a max loss event might occur. For example, you might spec an acceptable 20-year frequency to a 99.9% confidence level. Once the risk is defined, we determine the probability of profit and expectancy ratio. For example, you might spec an 80% probability of profit and 2/1 expectancy ratio. (purely hypothetical round numbers in the above example)

The client can then begin to quantify their investment, while recognizing that there are of course no guarantees. In the above hypothetical, the investor would understand that, statistically, in any given year there is an 80% probability of making at least some money. There is an assumed 1/1000 chance of hitting the 10% max loss point. At that level of risk, the expected average annual return is 20%. In such a situation, the investor is not gambling. The odds are well defined and highly in his favor. Not simply the odds of making or losing money. The probability of getting a return that more than adequately compensates him for the assumed risk.

Gambling is not simply the assumption of risk. Risk is present in literally every aspect of life. Whether working for someone else, starting your own company, or investing in publicly traded companies, the risk remains. In that sense, even the very act of living would be gambling. In reality, gambling is the voluntary assumption of negative expectancy (usually in the hopes of an improbable but large payout).

A "betting system" or money management technique cannot create positive expectancy where it doesn't previously exist. It simply changes the velocity of returns. If the game or investment has negative expectancy, speeding it up or slowing it down doesn't really matter. The end result across the masses is still a loss, regardless of whether it is a slow loss or a fast loss. However, as you aptly demonstrated, poor money management can obviously ruin a positive expectancy investment. Previously in this thread a few of us referenced a maximum value-at-risk of around 25% as being the typical rule of thumb for absolute max risk assumption in even the best investment programs. The higher the expectancy ratio, the closer to that you can get. The lower the expectancy ratio, the further away from that 25% you should stay.

The MRCI system has an approximate 1:1 ratio qualifying it as a decent program. But that also means it would probably be wise to shy off of that 25% VaR mark which would be reserved for programs that present closer to a 2 ratio. But limiting the MRCI program to a 20% max drawdown requires capital balance of over $150K. That's why I've repeatedly stated that while it is a decent program, using it as suggested is excessively risky. In fact I've already had a few people contact me and confirm that they participated in that program for a bit in a smallish $40K account, but the wild swings were too nerve racking.

[Cormorant]

Certeza -- I know you invest for high-net worth clients, and you probably can't specify anything in particular here, but . . . are there any investment methods with a better reward/risk ratio than MRCI that you would recommend for the average middle-class cruiser? Anything that could be done via laptop while coastal cruising, or turned over to a broker while off in the South Pacific? I'm genuinely curious what it would look like, even roughly speaking.

[boatman61]

Originally Posted by Vino the Dog

Thank you folks for explaining why stock market, futures, and all other names you call it, are without question, gambling... and nothing more.

Just like blackjack, craps, and poker, there are "systems", and for each system, proponents who can string a pseudo-logical sequence of statistics that prove the system player is not gambling.

This thread has been pretty much taken over by gamblers, and I wonder how many of them even have a boat, and of those who do, how many leave the dock for more than a couple weeks at a time?

I liked the thread better when there were cruising sailors thinking about how to make a few bucks to keep cruising, than now, when it seems like mostly fairly affluent business men hoping some day to strike it rich enough to buy a boat.

Hey.. Tossers Rule.. bit slow if you have not realised that..

[Certeza]

Originally Posted by Cormorant

Certeza -- I know you invest for high-net worth clients, and you probably can't specify anything in particular here, but . . . are there any investment methods with a better reward/risk ratio than MRCI that you would recommend for the average middle-class cruiser? Anything that could be done via laptop while coastal cruising, or turned over to a broker while off in the South Pacific? I'm genuinely curious what it would look like, even roughly speaking.

Over a public forum I'm pretty restricted as to what specific advice I can give, so I'll have to be VERY rough.

If you are looking for something that is going to give 100% annualized (yearly average) returns for low risk, you are wasting your time. The best long term programs out there will have at least 50% max drawdown for those type of returns. I say long-term because anyone can hit 100% in any random year. I don't even allow my clients to leverage up high enough to make 100% annualized returns possible.

If you have realistic expectations, and want annualized returns of 15-20% at around 10% risk, then there are some options available to the average investor that require very little oversight. That is about double the reward/risk as the MRCI system. Some of those cannot be leveraged while others might be slightly levered in a retail account to accomplish 30% annual, without dramatically increased risk.

There are certain institutions that take programs like ours and overlay them over a stock portfolio. Over the long term, that type of combination can handily beat the market while dramatically reducing vulnerability to market crashes. They create what is called a structured product and sometimes make it exchange traded so that they are available to the average retail investor. So while our program isn't directly available to the retail investor, a similar structured product might be.

The problem with structured products is that there are certain regulations that prevent them from being fully efficient. So the product will have lower returns than if you had direct access to the underlying programs. For example, there is one that is a bit similar to what I have my clients create in their portfolios.

Structured products are so much better than typical mutual funds that I wouldn't even consider hiring an adviser that isn't an expert with them. A properly constructed portfolio that uses certain notes, structured products, and a bit of diversification into certain commodities (or commodity products), would be able to average 20% annualized with dramatically reduced risk. I can't post them on this thread because I don't want some random viewer to accuse me of advising them.

[Cormorant]

Thanks. I confess I had never even heard of structured products before, but now as I begin Googling them, I see there's a lot of information. Good thing to know about.

Finding the right one might be like finding a needle in a haystack, but at least now I see the haystack. . . .

[Vino the Dog]

Since this thread was won by a poker club, and it is original version is old, strewn with dead horses... no, no, naysayers, I do not wax negatively - only state that there have been a number of good ideas here that would fit the interest of a wide variety of currently cruising sailors. As everything tends to go, the diversity of ideas upon which the thread has proceeded has found a much narrower field of interest. That is normal. The ideas previously posted have been discussed enough that they do not need repeating, and the new ideas tend to be of a different mentality.

Thus, I suggest someone with an idea for a similar thread aimed at sailors of modest means who need to continuing bringing in some money to keep cruising - possibly starting such a thread would have merit. I would do so myself, but I live on a boat and have limited access to the internet to do the effort justice.

Hey, you investor guys, don't get your shorts tied in a knot, it is just a poetic description. No insult meant to anyone, just that "investment" is a specialized interest and deserves it's own thread for those interested.

[StuM]

Originally Posted by Vino the Dog

Thus, I suggest someone with an idea for a similar thread aimed at sailors of modest means who need to continuing bringing in some money to keep cruising - possibly starting such a thread would have merit. I would do so myself, but I live on a boat and have limited access to the internet to do the effort justice.

Someone did:

http://www.cruisersforum.com/forums/...+when+cruising

[Cormorant]

I went back and started reading this thread again from page 1. There are dozens if not hundreds of good ideas for both labor and capital among its 63 pages so far. I suspect we've covered 99% of all the good ideas for cruisers, plus plenty of bad ideas (like drug smuggling). This thread is now an infinite loop -- jump in at any point and read till you come back to where you started.

[HankOnthewater]

Over the last 10 days I read all the posts in this thread, that has been going for over 4 years now. Many good ideas were posted, some hilarious ones, and some dubious/illegal way of making money.


First some observations:
- All cruisers need money to survive:
o some have it before they start
o some have money that works for them
o some make/earn this during their travels
o some cruise parttime and work in between shorter cruises
- It has been noted that very few successful money making people listed their skills here……. They are keeping quiet. And thank you to those who shared!
- Very similar thread on CF has been started, see post # 942 … how does one insert a link?

If nothing else read these posts: # 44, 98, 166, 352, 505, 563, 665,697, 738, 821.

Over the last few months this thread was dominated by a discussion between Delfin and Certeza (mainly to do with Commodities spread and MRCI as I understand it). If you do not know what this is, please read the posts, or google it. In short how to make money in investments. Quite in depth, but as others already said: not suitable for all of us (cruisers).

Over the years a few contributors have summarised all the ideas (post #505 comes to mind), and maybe another one here:

1. By all means target fellow cruisers for an income by providing one of these services:
a. Welding, bending pipes
b. Woodwork
c. Bottom cleaning
d. Fibreglass repair
e. Rigging and splicing
f. Mechanical
g. Painting/varnishing
h. Boat name stickers
i. Pet services: grooming, sitting etc
j. Boat minding for absent owners
k. Sail, canvas making/repair
l. Plumbing
m. Electrical
n. Electronics
o. Refrigeration A/C mechanic
p. Cooking (ie delivered to boat): bread, pizza, cold beer, dinners, waffles
q. Computer repair/advice
r. WiFI access point provider
s. Delivery skipper

But be very mindful of this kind of work because:
· You may not have a working permit in an overseas country
· Locals might get upset, and dob you in
· Cruisers are generally a tight lot, short of money as well
· Generally this kind of work does not involve money exchange, it's rewards are often a drink or a feed. “What goes around comes around” and “ karma” has been mentioned.

2. Other sources of income are also boating related but targeting others than cruisers themselves:
a. Charters
b. Fishing
c. Diving trips
d. Sailing tuition
Again and even more so, you may need a work permit, licence, insurance etc. etc. to work as above. If not you might find yourself certainly on the wrong side of the law.

3. You have some artistic skills:
a. Jewellery making
b. Painting (the artistic kind)
c. Musician
d. Street acts, ie puppeteer
e. Writing (see more under ’internet’ }
f. Photography (again under ‘internet’)
The first 4 are at times tolerated without much trouble, the others can be done anywhere anytime.

4. Trading:
a. Fuel
b. Drugs (if one is stupid enough)
c. Liquor
d. Cigars
e. Local art
f. Or just providing transport for various wares (excluding smuggling)
Most of the above would be illegal if not declared, taxes paid etc. Then often the incentive to trade disappears as the profit goes down to zero or below that. It seems that there is little income to be gained in this area.

5. Skills already present, provided to locals:
a. Any of the skills/trades listed under point 1.
b. Medical: doctors have often enormous obstacles to get accredited in a foreign country, may take 6-18 months.
c. Nursing, as above but a lot easier
d. Teachers maybe possible (definitely in some East Asian countries)
e. Hair dressing
f. Tattoos
g. Chef
Again, workpermits, taxes, licences all need to be in place, unless you want to risk your freedom (jail) or loss of your boat.


6. Internet, services and sales via the Internet seem to be most in favour to make money:
a. Writing: website, blogs, copywriter, travelguides, product, boat or marina reviews or for magazines
i. Income can be direct from a paying customer or indirect from ads on the blog/website
b. Photograhy/video: postcard making, educational
i. As above
c. Travel agency either free standing or using one’s own boat/assets
d. IT, ie programmer, webdesign etc etc.
e. Sales, whatever you have, can make, can source, can supply
f. Crowd sourcing accurate charts
g. Contribute to weather information
All the above require a regular good internet connection, in many cases being IT savvy.

7. Working your money to make money. Money you already have, used for investment:
a. Rental property
b. Stockmarket, future trading, options, foreign exchange etc. etc.

8. Items that did not fit the points above, some hilarious, some left of centre ideas or others outside the law (in no particular order):
a. Rape, marriage counsellor
b. Massage therapist
c. Making fishing lures
d. Collecting/selling shells
e. Sell carbon credits
f. Printed T-shirts, or/and embroidery
g. Brothel
h. Male escort
i. Gay nudist cruises
j. Pole dancing (around the mast was suggested)
k. Trawling for floating debris
l. Rum quality control inspector
m. Breeding puppies
n. Bunkering service for water or diesel
o. Drug running
p. People smuggling
q. Pet smuggling
r. Smuggling anything else
s. Spying
t. Invent halyard anti-slapping device
u. Invent wind generator noise silencer
v. Winning lottery
w. Breastmilk provider
x. Sell Avon products
y. Setting up own religion
z. Fred Hollows clinic (but a profitable one)
aa. Off shore Botox clinic
bb. Gambling/ casino/cards/roulette
cc. Weaving palm leaves
dd. Certified lifecoach
ee. Repairer of inflatables
ff. Opening a local business: like marina…. Hmmm not really cruising anymore


Paid jobs which can allow you to cruise a large part of the year:
a. Airline pilot
b.Oilrig worker

Sorry for the lengthy post, and the formatting is not optimal

[mausgras]

Well that has saved me a lot of work. .... now how much do I owe you or will a bottle of beer do ok.

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