Funding the Dream

[zeehag]

how i did it--i was doing just fine n dandy working hhrd and earning 90k per annum as an nrn enjoying my work a lot, as i love to triage in emergency room and i love icu and associated areas.
i was minding my own business driving a 300 zx normally aspirated car across coronado bridge when bam i was hit in rear for my 11th neck injury and ta daa no more ability to work..oh well....so now i draw ssdi disability as i cannot any longer do that which i so love doing---so i draw ssdi income and sail wherever i want to go. is tough life--would more enjoy working as i go, as an rn is able to do travel jobs around this globe--that was my plan.......however, best laid plans of mice and man oft go wrong........

so now i do almost nada and enjoy my formosa 41 totally and i sal wherever i want to sail and visit.

i am in semi tropix with only 60s temps this couple of days. i am in a very quiet lagoon with no seas and some winds. anchor holding perfect--as i watch other boats drag a tad----is a tough life--someone has to live it...even if there are some disabilities to overcome.....

what i bring into my bank account is only that which i am granted by usgummingkt, as i truly am not able to work in nursing anymore, at the level i am educated and trained...lol..i rock and i am out here sailing my formosa into pair a dice.

isnt hard to do this,is only the fear of the unknown that scares most of ye off, i am thinking. life isnt that difficult out here in cruiseville. it really doesnt take too much dough to make go.

[Celestialsailor]

Originally Posted by Brogan007

How about just back-packing around the world for a couple of years?
Without a boat. Give you a break from your personal rat-race, allow you to see the rat race the rest of the world lives with, and maybe find your Shangri-la.
Having personally worked in several third world countries, as an employee, I agree with previous posters...opening a biz overseas is a massive task.
Remember, if it's hard to make it work ( ie be profitable) at home...it'll be much harder in a foreign land. Much less stress to work for a dive shop.
Who knows, if you choose more beach oriented destinations, you might find a cheap boat.

I agree with this concept wholeheartedly. i have traveled with backpack on and off for years. I can fly into SEA for under a grand and pack around a month for under $500. Great way to see if you like the meandering lifestyle.

[Danibug]

Originally Posted by belizesailor

Passive income is wonderful thing. Bonds are the ultimate passive income because they are totally passive. Tax exempt bonds are becoming more scarce but they are out there yeilding 4-5%. Only buy high grade bonds issued by entities w good financials (I avoid corporate bonds all together because I dont trust any financials from a USA company these days...ditto for stocks).

Debt. Having personal debt is like having financial cancer. Get rid of it...especially the really malignant variety for depreciating assets like cars (foolish waste of money...I still drive my 1989 Jeep) and consumer goods. Most Americans spend most of their income on debt service...they are in financial prison...free yourself.

YES!! This is what we are doing. It is so hard for me to understand the need for fancy cars, giant houses, expensive clothes, the newest gadgets. So many people I know spend whatever they have after the typical 401k or IRA and then proceed to tell us how they could never have enough money to do what we are doing and that we'll surely end up destitute.

Zero debt, save as much money as possible, invest and go cruising. It can be done on many different income levels. If you don't make as much you can't expect to have an expensive boat, or live at the marinas or drink $12 martinis in the bar, it's all relative.

[ErBrown]

Originally Posted by Danibug

Zero debt, save as much money as possible, invest and go cruising. It can be done on many different income levels. If you don't make as much you can't expect to have an expensive boat, or live at the marinas or drink $12 martinis in the bar, it's all relative.

Yep that's pretty much the plan. Our only current debt is our home but it's easily covered and due to the location and view will become rental property when we leave (and will also be paid off). Plus it's nice to know it will be there as a safety net if we need to come back for any reason. So yeah passive income planning was the reason behind the OP, trying to get a feel for how much we needed to be able to live on. Really appreciate the feedback.

Oh and Dani...love the blog, I'll be following y'alls progress!

[Danibug]

Originally Posted by ErBrown

Yep that's pretty much the plan. Our only current debt is our home but it's easily covered and due to the location and view will become rental property when we leave (and will also be paid off). Plus it's nice to know it will be there as a safety net if we need to come back for any reason. So yeah passive income planning was the reason behind the OP, trying to get a feel for how much we needed to be able to live on. Really appreciate the feedback.

Oh and Dani...love the blog, I'll be following y'alls progress!

That is very exciting! We have alloted $3k a month for 3 years with some money to come back too. BUT From everything I've read $3k is A LOT of money to live off of the way we want to, so we may be able to cruise for longer if we live off of less. At $2k a month we can go for 4 years, $1,500 for 5 years etc. We live frugally now, I seriously doubt we'll go crazy while out at sea.

Good luck! Only 20 months left for us. Please keep the time moving quickly now and moving SLOWLY when we start cruising.

[David_Old_Jersey]

Originally Posted by ErBrown

We appreciate all constructive feedback, but can do without the Captain Ron comments.

I will try my best - no promises though .

Been a while since I read anything in management style gobbledygook - cheers for the flashbacks.

I see your posts never mentioned either any previous boat experiance or anything that attracts your eye for the future. So I am assuming nothing in your history - in which case I would suggest going on a Charter or 3 for a few weeks. Not everyone likes either being on a boat or within 10 feet of "loved ones" 24/7 . Could save you a fortune in boat and divorce costs .


Anyway on the boat thing, use 10% as your starting ballpark - it is not based on anything, could be higher and could be lower........depends on how long the piece of string is . But the good news is that you get to help define the string length . At first sight that might not appear terribly helpful - but it is.

3 things will determine your boat budget:

1) condition of boat (and likely that age related, but not automatically so).

2) use of boat (where and how)

3) You (skills and knowledge - and ability / willingness to get hands on)


As a broad rule of thumb - the less you know the more it will cost.

And boats is all about self-reliance, which is useful as you really don't want to be relying on any of the "professionals" within the marine industry (home and abroad) - at least not to the extent of not knowing WTF they are doing and why. It's a blank cheque thing, be kinda rude not to abuse it . There are of course good people in the marine industry (some of them even here on CF ), but you won't go far wrong starting off with low expectations until proved otherwise....but to do that will need to know arse from elbow, learning curves always cost - how much is a personal choice .

As per the posts on this thread, can do your adventure on both 10% or your budget and 10 times it - but whether you can (and also want to) is simply down to you. as is how much of your budget being spent on own learning curve.........

[ArtM]

Originally Posted by ErBrown

I've been reading fairly extensively and will continue to do so, but in the mean time I need to start somewhere. For a worst case scenario lets assume we go with a $200k boat and are planning for between 10-12k per person per year. If you where planning for a 3-4 year cruise, what's a decent rough guide for ongoing maintenance.

It's human nature for people to assume that other people are like themselves - that they have the same wants, needs, and goals.

In cruising, your needs will be driven specifically by your own interests, capabilities, and goals.

If you want to keep it very basic, travel very little, and plan to stick to simple sailing and cruising scenarios, you can assume much lower needs for outfitting and maintenance.

If you want to travel in high seas, maintain high sailing performance, and navigate complex and crowded routes, then your needs will be MUCH higher.

In the very simplest scenario, any boat that floats and is comfortable to live aboard will meet 100% of your needs. Everything from there is gravy.

[Lin Pardey]

Interesting chain of comments. No one else has exactly the same wants, desires or maintenance abilities as you do. So budget suggestions are just that. But we do know time slips away quickly so don't spend any extra time trying to earn money to cover every contingency you can dream of. To repeat the advise some have posted, go for an older, smaller boat and get out there as soon as possible. Get out sailing lots right now on as many boats as you can to get your skills level up and see what works and what doesn't. Learn to love sailing - not just the idea of being a cruiser. It will keep the dream alive.

As for actual costs, cruisers we've met down here in New Zealand in the past six months were having a great time on budgets ranging from $800 to 2500 a month (for a couple) including flying home once every year or two.

But there is little talk here about the other costs associated with cruising, physical, emotional such as being able to handle the boat, gear and its maintenance. (In one of our books we wrote several chapters on these aspects.) All of these are easier the sooner you get away, and if that means going on a tighter budget, then do it.

As for opening a business somewhere along the route, we have many cruising friends who have done so. Often the businesses sort of fell into their laps such as small resort type businesses where the current owners had health problems, other times they saw a need and filled it. Success rate? Only a bit lower than for businesses in your own country, but with often frustrating, often interesting problems to solve. One thing we have noticed is, cruising folks who decide to work in a new place often do not expect the same high financial returns they did before they set off - so it's easier to feel their new business is a success.
Good luck,

[rognvald]

ErBrown,
Great idea! A few things will make the money end of your cruise successful: debt free home or none, debt free credit cards, debt free boat and a solid cruising kitty to provide for any unseen expenses. Lifestyle can be lavish or lean depending upon what you like and how much you're willing to spend. It doesn't sound as if money is a problem and that's good. You'll get a feel along the way what's your comfort zone and will adjust accordingly.
Although it is not the focus of your question, you haven't mentioned you and your wife's sailing experience. Your ability to sail well and self maintain your boat will be key factors to your ultimate expenses since breakdowns are inevitable, even on a well found boat, and will prevent you from being held hostage by unscrupulous yards, riggers, towers and mechanics while saving you untold dollars, frustration and preventable headaches. The money is a very important aspect to your dream and is the key that unlocks the door, but being competent and well prepared will be ingredients necessary for ultimate success and fulfilling your dream to cruise.
A final thought, also relating to money, is that you don't have to spend up to 250K to buy a solid, well found boat. There are many boats well under 100K that will accomplish your goal with additional funds left over for additional years of cruising. And, if you are new to sailing, a boat in the 30-36 foot range will be easier to handle and maintain while you are honing your sailing skills. A two week cruise in the BVI's on a 50 foot boat in protected waters is not the same as long range cruising on your own vessel. Good luck, good sailing and much success on your great dream.

[Unklebuk]

Originally Posted by Lin Pardey

As for actual costs, cruisers we've met down here in New Zealand in the past six months were having a great time on budgets ranging from $800 to 2500 a month (for a couple) including flying home once every year or two.

But there is little talk here about the other costs associated with cruising, physical, emotional such as being able to handle the boat, gear and its maintenance. (In one of our books we wrote several chapters on these aspects.) All of these are easier the sooner you get away, and if that means going on a tighter budget, then do it.

I've been lurking all over the boards here since finding them, and keep seeing naysayers when someone posts about buying a boat and setting sail. It's understandable, in a sense as I'm sure there are many who have jumped in with little or knowledge/research and failed. So, I take most naysayer posts with a grain of salt, moving on to learn as much as I can from everyone....naysayers included.

Lin, The above is quite useful as my wife and the biggest item we sweat is finances if and when we choose to make the plunge and buy a boat for living aboard and traveling. We both have combined pensions, after tax running pretty close to just over double the max you stated the couple you met have budgeted; not that we plan on budgeting to max out our pensions. We spend what we want to spend, but are fairly frugal, more so no in our years now as we get older, but always stay fairly smart with out money (no comments on how buying a boat doesn't fit that statement as being a smart financial decision). With the exception of a small personal loan we're paying off fairly quickly, that's it for debt, and only tied into a lease until early 2014, so no ugly home repair bills that'll pop up unexpectedly for us either. I know we'll spend less or more than the couple you provided as an example, and many will spend less/more than us, but that bit of information you provided does put me at ease a bit more.....not entirely. I guess we won't know for sure, one way or another, until we've made the purchase ourselves.

In the meantime, we're on a steep learning curve and are looking at short and extensive courses now to gain as much sailing knowledge as possible. We won't be making the purchase plunge until our leas is up, and will then downsize for the 3rd time in as many years to a smaller and cheaper place, maybe as short as a 6-month lease, then get underway. Until the, still spending, but also saving a bit more in prep. Like I said, of anything, the financial side of owning a sailing vessel keeps my mind ticking over more than anything else as we make and adapt our plans as we go.

[ttamg]

Hi

One of the original questions on this forum was the cost of maintenance. I'm by no means an expert on this, but my understanding of the major maintenance costs you might have and can budget for over the longer term are for a 40-45ft quality yacht:

Haul-outs and antifouling (annual) = 2-4k
Rigging (once every 10 years) = 10k
Batteries (every 5-8 years) = 5k
Engine (10 year budget) = 10k
Electrics and upgrades of Nav (once every 10 years) = 10k
Sails (5-10 years but depending upon use and type of sails) = 10k
Other consumables etc = 2-4k per year

It's not very scientific, but together this would get to around 10-15k mark a year... but clearly it is lumpy so you need funds in a rainy-day fund as all may come at once.

[schuitp]

Originally Posted by ttamg

Hi

One of the original questions on this forum was the cost of maintenance. I'm by no means an expert on this, but my understanding of the major maintenance costs you might have and can budget for over the longer term are for a 40-45ft quality yacht:

Haul-outs and antifouling (annual) = 2-4k
Rigging (once every 10 years) = 10k
Batteries (every 5-8 years) = 5k
Engine (10 year budget) = 10k
Electrics and upgrades of Nav (once every 10 years) = 10k
Sails (5-10 years but depending upon use and type of sails) = 10k
Other consumables etc = 2-4k per year

It's not very scientific, but together this would get to around 10-15k mark a year... but clearly it is lumpy so you need funds in a rainy-day fund as all may come at once.

Hi tatami,

Your numbers seem a bit high and when you quote them you fail to mention what type of cruising you do. is it off shore, inside Puget Sound or are you circumnavigating the world. It also depends on the sailor and how much equipment you really need and how old is your boat. Please don't scare people by quoting costs that may be unrealistic.

Cost conscious sailor

[ShaunJ]

I have seen written here and in my experience, 10% of the boats value per year seems a pretty good starting point.

[ttamg]

Originally Posted by schuitp

Hi tatami,

Your numbers seem a bit high and when you quote them you fail to mention what type of cruising you do. is it off shore, inside Puget Sound or are you circumnavigating the world. It also depends on the sailor and how much equipment you really need and how old is your boat. Please don't scare people by quoting costs that may be unrealistic.

Cost conscious sailor

Fair comment. I agree this can be high. Although it comes from my philosophy of being cautious on budgeting so we don't have nasty surprises we can't pay for.

This is for 45 ft quality heavy disp. Think Oyster or similar. And for oceangoing liveaboard. So higher end costs.

[David_Old_Jersey]

Originally Posted by ttamg

It's not very scientific, but together this would get to around 10-15k mark a year... but clearly it is lumpy so you need funds in a rainy-day fund as all may come at once.

The numbers will always never translate for others as so many variables that are individual specific (location / use / boat condition / boat design / boat age / equipment (age and type) - and owner's skills in fixing and aptitude for preventative maintenance)..........

.......but that lumpy comment is well worth stressing , gotta budget over a longer period than just a month - or even a year!