Planning for finances

[CatInHand]

Hi All!! *waves with a big cheesy grin*

I'll fess up right away and tell you that I've never sailed, although I have been taken sailing. Be prepared for some pretty dumb questions, but please be gentle.

Here's the plan: The boyfriend (who owns the boat) and I are planning on ditching this mundane conventional life in a few years and spending potentially the rest of our lives sailing. He will have a source of income, so I'm trying to figure out how to cover my share of the expenses. Once I hit 60 - 12 years from now - I'll be able to access my retirement funds and everything will be hunky-dory. It's just the next 12 years I need to worry about.

In order to plan this I'm trying to come up with a generalized (and therefor incorrect) budget for the future. I was hoping to hear some chiming in on this.

I've read, with great delight, the threads on cruising on $500 a month.....and that won't really work for me. But neither am I the $5000 per month cruiser. Something in-between, with mainly anchorages, long stays in one country if we need to watch funds for a bit, and the occasional splurge for inland sight-seeing. I proposed $2K to the bf and he said that was way more than we needed.

So, I dunno. $1500? He can fix anything, and we'll do as much preventative care as possible before we leave. Maybe plan to expect $500 for the boat (fuel, repairs, etc) and each of us live on $500?

Do I sound way off base here?

[maxingout]

You can do it on the cheap or spend megabucks.

From Turkey to Trinidad, I stayed in only one marina. We anchored out the rest of time time and cruised on $500 to $1000 per month.

As long as your yacht is in awesome shape and you stay away from land, cruising is cheap. If you have a broken down yacht and spend your time onshore, it's going to cost much more money.

It will cost however much you want to spend and the lifestyle you select. It is not the high cost of living that gets you. It's the cost of living high.

[jrambo316]

Originally Posted by CatInHand

Hi All!! *waves with a big cheesy grin*

I'll fess up right away and tell you that I've never sailed, although I have been taken sailing. Be prepared for some pretty dumb questions, but please be gentle.

Here's the plan: The boyfriend (who owns the boat) and I are planning on ditching this mundane conventional life in a few years and spending potentially the rest of our lives sailing. He will have a source of income, so I'm trying to figure out how to cover my share of the expenses. Once I hit 60 - 12 years from now - I'll be able to access my retirement funds and everything will be hunky-dory. It's just the next 12 years I need to worry about.

In order to plan this I'm trying to come up with a generalized (and therefor incorrect) budget for the future. I was hoping to hear some chiming in on this.

I've read, with great delight, the threads on cruising on $500 a month.....and that won't really work for me. But neither am I the $5000 per month cruiser. Something in-between, with mainly anchorages, long stays in one country if we need to watch funds for a bit, and the occasional splurge for inland sight-seeing. I proposed $2K to the bf and he said that was way more than we needed.

So, I dunno. $1500? He can fix anything, and we'll do as much preventative care as possible before we leave. Maybe plan to expect $500 for the boat (fuel, repairs, etc) and each of us live on $500?

Do I sound way off base here?

Actually, you can take distributions early from ira, for example, if you take "substantial equal periodic payments". No 10% penalty. Google SEPP ira.

[CatInHand]

Originally Posted by jrambo316

Actually, you can take distributions early from ira, for example, if you take "substantial equal periodic payments". No 10% penalty. Google SEPP ira.

I'm trying to avoid that, or more precisely, keep that option as an emergency back up rather than part of the plan. My dad was a fiance guy and I'm pre-wired with making sure my finacial safety nets have safety nets.

maxingout: That's great to hear, especially the 'we' part as I recall the $500/month was geared toward the single sailor. I want to plan for touristy things, but not so much the bars and nightlife.

The boat's in good shape, and I'm hoping it'll be in great shape by the time we leave. Departure date is 3 to 5 years from now - a couple years to build resources and a a couple years to make everything happen. I plan on selling my house for my share of the funds and I need to decide how much I want it to appreciate before attempting to sell. Bf would happily leave in two years but that's not really fiscally responsible (in my eyes, as I won't have any source of income should some aspect of the plan go astray). I've given him my word that five years out is my longest possible set sail date, regardless of how much the house sells for.

[denverd0n]

Originally Posted by maxingout

It is not the high cost of living that gets you. It's the cost of living high.

Well put.

One thing to remember, if you are planning to do this for the long-haul, is that you will eventually need to spend money on things like rigging replacement (both running and standing), engine overhaul, sail repair and replacement, and that sort of thing.

Easy enough to keep your expenses to less than $500 per month so long as you can delay major repairs and replacements. But eventually all that catches up to you, and then you either sell the boat for peanuts, as is, or spend the money to fix it. A realistic long-term budget needs to include a set-aside for these long-term repairs and replacements.

[cwyckham]

What about renting the house instead of selling it? Have you done the math, including paying somebody to play landlord?

[hellosailor]

Last time I looked, early distributions from any kind of IRA take a hit--with a very short list of specific exemptions. Check directly at www.irs.gov to see that.

Cat, there are some long threads about making money while cruising, costs of cruising, zingers like medical insurance if you carry it. And if the boat is not titled in both your names, problems if he gets ill/jailed and you're not on the title or carrying papers. You might want to look into old threads on all those things, and meanwhile have a frank discussion with the bf about whether he's aware of all the costs, and that while you'd like to go dutch, you're not seeing sources of income to allow that.

By all means if you can figure out a way to do it, go now, enjoy it while you can.

[Teknav]

Welcome aboard! Any plans for the future, should be short; one year or less. The only exception to that rule is saving money for your future. Rose colored glasses look great, but you don't see many folks wearing them. Boating on the cheap is NOT doable. Consider boat chartering and taking wonderful vacations, when you're ready to do so; owning a boat is like having a bottomless money pit. Save your money! Mauritz

[CatInHand]

These are great things to think about, thanks for answering.

I have considered renting the house, but I'm not sure if I want the potential hassles if I'm going to be far away. I'm also not sure if I want the potential hassles ever. I like the idea of completely severing all responsibilities to the land.

Engine overhaul, sail and rigging replacement are planned before departure. One of the benefits of not leaving immediately. I also have a chunk of stock that is earmarked for emergency repairs and not counted in the living expenses. Safety net. I've also oversaved for how I intend to spend my retirement, so anything delayed until I hit 60 can be dealt with at that time.

Bf owns the boat and has spent the last 5 years cruising. I trust his opinions on the boat, weather, all things sailing related. I have backpacked through Europe/Eastern Europe. I trust my own opinions about what kind of reality I'm expecting.

Boat insurance seems like a good idea to me, but we'd have to discuss it when the departure date gets closer. Medical insurance - not sure I see the point once we leave the states. Maybe catastrophic.

Boat title in both names....now that is something that never occurred to me. I guess I wouldn't do that without also having a document that says something about me agreeing to not take possession of the boat in the event of something untoward happening to him. I guess, alternatively, I could up front pay him half the value. This is really good to think about, thank you.

Already working on passive income plans for me, and the bf, of course, can sell his mechanical skills to any cruiser who's got engine/motor problems. Or sail repair.
Canvas work.

Drat, why didn't I acquire any practical skills in my lifetime?

[CatInHand]

I'm also done living in the US. If the boat thing doesn't work I'm moving to Ecuador, Thailand, or just traveling. I'm slowly selling or giving away all my stuff and boy does it feel good!

[goboatingnow]

SOunds good CatInHand, a bad day sailing is better then any good day in the office.

[boatman61]

Originally Posted by CatInHand

I'm also done living in the US. If the boat thing doesn't work I'm moving to Ecuador, Thailand, or just traveling. I'm slowly selling or giving away all my stuff and boy does it feel good!

Don't suppose your into going straight to Thailand... save you time and disappointment...
I'll be more than happy to be given your boat if it'll help you out.....

[CatInHand]

Not my boat to give, and my gentleman caller will never give up his mistress.

Or maybe I'm the mistress.......not too sure.