I think our 7 year plan could be a 2/4 year plan

[WanderingSoul]

Greetings from a newbie! I’ve been lurking for quite some time and want to thank everyone for the great information.

About a year ago, my husband and I (47 & 49) started hatching a plan to become liveaboard cruisers by my 55th birthday. I had in mind that was the age when we could cruise for a few years and I wouldn’t have to get a full time job when we returned. We were thinking about a 2.5 year sabbatical – 6 months to find and outfit a boat and 2 years to cruise.

This may just be a cabin fever dream given the current state of the world, but after reading a lot of information here and crunching the numbers, I think we might be able to do this in 2-4 years, and not have to return to life on land unless we want to. Our kids are 20 & 21 and somewhat launched already. They’ll really be off on their own in another 2 years. There is something to be said for starting early!

Please poke holes in my plan!

Assuming the real estate market doesn’t completely tank (I know, big assumption right now), we can probably net $200K on our current home. I’m looking at a $100K budget to purchase and outfit a monohull (about 40’) for cruising. I figure another $18K in startup costs for things not attached to the boat like registration, household supplies, clothing, gear, tools, spare parts, initial provisioning, etc. That would give us about $80K to put towards an investment – probably a down payment on a house we wouldn’t mind living in if we don’t become lifelong cruisers. We would rent the house. We’ve been long distance landlords before, so it doesn’t really scare us.

In 2 years, we could sell our house and our current 27’, purchase our cruising boat, move to Florida and live aboard for 2 years while we get the boat ready and still work at least part time. My husband is an RN and retired military, so he gets a nice retirement check every month and is certainly in an in-demand field in FL. I work in nonprofits and can likely pick up some freelance work. Just getting rid of the mortgage and associated utilities, etc., would allow us to save about $75K over two years – this would be our cruising emergency fund for when big boat things break. We also have a separate investment portfolio that I don’t want to touch. This plan would give us FL residency, so we won’t have state income tax.

I think we can cruise comfortably – not lavishly, but also not uncomfortably frugal - on my husband’s retirement pay plus another $500 a month. So I need to figure out how to earn that extra $6K a year or cut costs somewhere. We’ll hit age 59 ½ in 2031 and 2033, and if we only take the annual return on our IRAs and other investments (I assumed 5-6%), we won’t need the additional $6K/year, and can increase our budget a good bit.

Here is what I’m currently working with for monthly costs:

Boat Insurance: $334 month (I guessed $4K/year from reading here. My husband could fairly easily get his 100 Ton Captain's License if that would help lower the cost)
Fuel: $50
Port Fees/Customs: $100
Marina Fees (we’ll mostly anchor): $50
Cell service: $275
Satellite Radio Subscription: $20
Weather Service Subscription: $70
Life & Health Insurance: $150 (I know, I know. Thank you Uncle Sam, taxpayers, and 24 years of our lives!)
Groceries: $700
Alcohol/Bars/Restaurants: $500
Entertainment: $100
Shopping/gifts/personal care: $150
Misc. spending cash: $200
Laundry: $20
Short term savings for minor repairs and travel: $500
Storage unit for household goods I can’t part with: $150

So . . . sell the house in summer 2022, move to FL and live aboard until hurricane season ends in 2024, then head out to find the horizon? Maybe??

[JPA Cate]

Please, no offense intended, but let me show you where I think you've underestimated costs.....

Boat Insurance: $334 month (I guessed $4K/year from reading here. My husband could fairly easily get his 100 Ton Captain's License if that would help lower the cost)Call around, I really don't know about this.
Fuel: $50 Yesterday, we paid 1.37/liter AUD for 20 l. diesel.
Port Fees/Customs: $100 These vary with destinations, and include agriculture, immigration, and in some cases, "light fees", mostly in places where hurricanes/cyclones take out the lights.
Marina Fees (we’ll mostly anchor): $50 This may buy one night. In hurricane season, you will have more nights in marinas.
Cell service: $275
Satellite Radio Subscription: $20
Weather Service Subscription: $70Use open source wx. info.
Life & Health Insurance: $150 (I know, I know. Thank you Uncle Sam, taxpayers, and 24 years of our lives!)
Groceries: $700
Alcohol/Bars/Restaurants: $500
Entertainment: $100
Shopping/gifts/personal care: $150
Misc. spending cash: $200
Laundry: $20 This may be cheaper where you are, but we just did 3 loads, wash and dry, 6 per load for washing, drying is $1 per 5 min, we used 2 dryers and spent 3 dollars for drying. So $21 for one trip.
Short term savings for minor repairs and travel: $500
Storage unit for household goods I can’t part with: $150 Are there any relatives with whom you could store those goods? We did the storage locker thing.
It would have been better to ditch the stuff than to have to go back there now and clear it out. However, I think for just a few years it makes sense if there isn't a less expensive way of doing it.

If you stay within the US, you may be able to do it comfortably it for this budget, especially so, if it is close to what you spend now. Food is more reasonable there than here. If you guys are flexible enough to handle it if you get a renter from hell, it COULD be okay. Whether it actually will, is in the laps of the gods. We did have friends who had left from the West Coast USA into the Pacific whose cruise was ruined by having to go back and deal with a trashed property. Took about a year and a half, and uncounted thousands. So, to me, it is not a risk free plan. But there is always risk in life.

Good luck with it.

Ann

[Merkava]

Just a few thoughts for you to mull over.
I've just got back from a 9 year circumnavigation. My wife and I own a Fraser 41' built in 1981. We've flown back home every couple of years, gone out to restaurants and rented cars when we wanted. I'd say we're kind of middle ground when it comes to expenses while cruising.

You don't say where you want to cruise which is a huge consideration on how far your money will stretch. The biggest one in my mind.
If you go to the med, or stay in Caribbean, it will not go so far. If you head to more off the beaten path places, you could be banking a good portion of your husbands retirement each month.

The big expenses that jump out at me as being ones that you would work with are:
cell service - 275! a month! That sounds crazy high. Like by about 225. You can get phone coverage much cheaper than this.

Fuel. Low. We're sailors but $600/yr is not much. But like I said before, it really depends where you are. I like sailing on and off anchor too and if you're planning to stay in the trade wind belts you could totally do it. But anywhere else, not so much.

Port fees seem high. We only paid that much one year when we went to the Maldives. ($1200 in fees for a 3 month cruising permit, yikes) normally it cost us 300 to 400 per year.

A weather service subscription is not something that's needed. It's a personal choice, but I've found that the ones who don't use those services are a bit better at forecasting weather than the ones who do. We didn't for our entire voyage and never felt the need. Like many things in the cruising life, you can either upgrade your skills, or rely on someone else. And what I've found is that even if someone is an 'expert' at something, most times I can do a better job simply because I care more. A lot more.

Also, a storage unit for things you can't part with. That totally depends on how long you're gone for. 1 or 2 years is one thing. But if you can afford it (and it totally looks like you can, easy) how likely is it that you'll stay out longer? I whittled my 4 bedroom house before I left, to 8 rubbermaid containers I stored at my sister's place and I'll tell you, it was one of the hardest things I did before leaving - AND - the most rewarding. MAN! It felt so good, so light, to be done with all of that CRAP. Life instantly became much freer, and isn't that what pulls us to do something like sail around oceans? How important 'things' and 'stuff' are will greatly diminish the longer you're 'out there.' What seems so very important while living on land pales in importance once you've been living out in the most glorious nature for awhile. Also, if you start adding up $150/month by even 2 or 3 (4 or 5 if you move onto your boat to live at first) years, you can buy a lot of new stuff when you get back for that amount of money. And if you stay out a bit longer, like I did (4 or 5 years became 9) it would be crazy to pay $1800 a year for just about anything. By the time I got back, I whittled those 8 containers at my sisters, down to 3. And it was easy.

Insurance is another one of those very personal decisions. But we never had any except for 3rd party when we were in a country that wanted it for us to stay in their marinas. 9 times 4/yr equals a lot of self insurance. And we also had the luxury of not talking to insurance companies from far away places and having to almost ask permission to go where we wanted to go. 4k a year seems a bit light too (depending on where you go) from what I've head from other cruisers over sundowners.

I think you're plan of moving onto your new 40' boat for two years is excellent. You'll get all the little things done that need doing before you head out on the big trip and you'll save a ton of money.

I don't like your idea of buying a place and renting it out. The stock market makes so much more sense to the cruising life. I've got stocks and I've got real estate that I am very fortunate to have some very good help with, but it's a pain while you're out there. It just is. My advice would be to invest in some good index funds (Vanguard) and put your emergency money into cascading term deposits. Divide what you want to have and open one every month or every two months so you have that money if you need it and still get the maximum interest while it sits there. Also, stocks historically go up more than real estate - without having to fix a toilet.

You say you'll have 80k to invest and that you've already got some invested. Remember that the 4% rule says you can live on 4% of properly invested (think index funds or blue chip stocks) in perpetuity. (indexed for inflation too) That means to get that extra 6000 per year you talked about, you would need to have $150000 invested.

My suggestion to make this work is to head for the far reaches right away. Go to countries that the living is cheap at first. That way you can save a bunch of that retirement money every month. If you do that, even for a few years, you'll have the money you need to cruise wherever you want for as long as you want. And you'll learn the most powerful lesson I learned while out cruising. How to live the richest of lives, on very little.

Keep your dream alive. It's a good one that no one ever regrets making. In fact, in my experience, it's one of the few things that will stand out more than anything in a life well lived.
All the best,
Mark n Rosie

[WanderingSoul]

Thanks for your feedback - it is really helpful and exactly what I was looking for.

I know the storage unit is a relatively major expense. If we are only cruising for 2 years, I'm going to want a lot of my stuff back! If we decide to cruise forever (or most of it), after 2 years I'll purge down to a few boxes that we can store in a relative's basement. Baby steps - even if it is expensive!

We're still debating the rental property. Like I said, we've done it before. We rented out a house in Alaska when we were living in the lower 48, so we even have experience with the long distance thing. It's all good until a hoarder moves in and does $40K damage. Been there, done that, and we still came out way ahead after flipping and selling the property. We're comfortable with it IF we have a property manager we can trust.

If we do this for 2 years, we'll probably stay in the Caribbean. After that we'll either return to life (mostly) on land, or head across the Atlantic or through the Panama Canal.

It seems like I grossly overestimated on the cell phones. I included our roaming data plan in that. What do cruisers do for internet?

It sounds like if I swap around my inaccurate guesses on port fees, marina fees, fuel and cell phone, I might still come out even since I overestimated some and underestimated others. I have $475 to work with there - it just might not be in the right 'buckets' yet.

Thanks again for your feedback.
M.

[chuckr]

I have been out 13 years and I think you are a bit little in many categories..go to dollars and cents on this board and i put out something like 8 or 9 years of cost data that includes USA/Bahamas Caribbean both east and west and Med

[WanderingSoul]

Originally Posted by chuckr

I have been out 13 years and I think you are a bit little in many categories..go to dollars and cents on this board and i put out something like 8 or 9 years of cost data that includes USA/Bahamas Caribbean both east and west and Med

Thanks Chuck. Your spreadsheet was one of my sources. I found it very helpful! I'm so glad people like you are willing to not only track expenses in detail, but share it with strangers. It looks like you haven't been in the Caribbean since 2012. That's where we will start, so that's the budget I'm trying to compile. For now . . .

M.

[Monohull]

Originally Posted by Merkava

You say you'll have 80k to invest and that you've already got some invested. Remember that the 4% rule says you can live on 4% of properly invested (think index funds or blue chip stocks) in perpetuity. (indexed for inflation too) That means to get that extra 6000 per year you talked about, you would need to have $150000 invested.

Merkava is spot on. I count on 3.5% max. Anything over 4% and you’re sure to run out of money.

[sailorboy1]

The budget doesn't have any boat costs.

I have posted cruise costs, for us, monthly the past 46 months.

[Doubleplay]

Originally Posted by Monohull

Merkava is spot on. I count on 3.5% max. Anything over 4% and you’re sure to run out of money.

That would be true if you know how long you'll live. There's no set in stone rules for how much you can draw. It can also change every year. Basically the older you get more you can draw.

[Doubleplay]

Good Luck with your plans. All I'm going to tell you is to get out of this part of the World(US, Bahamas , Caribbean ) quick. You'll be amazed how much further your dollar goes in other parts of the World, including even Med depending on where you are. We are conditioned to consume and fear mongered about retirement in this country which is the most expensive in the World for what you get be it social safety nets, healthcare or basic service in a restaurant. A couple both on social security(30-35K/year) can live much better in many countries around the World if you are open to new cultures and don't look for a fast food place around every corner.

[Joli]

Your budget looks to be in line, ~$3,400 per month for a forty footer should be fine. We seem to average around $4,500 for our 61' boat but a couple months were less with Covid closing all bars and restaurants . We're on the hard now and having work done so the $4,500/month is out the window.

[s/v Moondancer]

WS, we cruised for 11 years and covered 40,000 sea miles and anchored out 95% of the time and spent 6 years in the Keys, Bahamas and Caribbean almost never staying at a marina but you do need a great anchor and lots of chain.

If you semi-base yourselves in the US Virgins your husband could work.

What broke our budget was the fact that everything on a boat has a replacement cycle...our boat had had a complete refit except for the 15 yr old standing rigging. In 5 years we replaced all the standing rigging. Then overtime everything else started to fail...

I replaced every pump, airconditioners, refrigerator/freezer, sails, roller furlers, reconditioned every thing attached to the engine and generator including the transmission. You are very wise to keep a big reserve.

It is also important to keep a home in the US, we have friends who developed serious medical problems and had nowhere to go.

Repatriation insurance is very important as your health insurance is unlikely to pay out of the US, we used DAN the dive outfit and they were excellent for two evacuations I arranged. While many think that healthcare is good and cheap outside of the US that is just not true. A friend with a broken back and partial paralysis would have been paraplegic but for a $50,000 evacuation. Another friend got a $29,000 hospital bill for a ruptured appendix.

We live overlooking a mooring field in south Miami, We can see half way to the Bahamas. When you start to come south contact me. and if you need any sailing lessons I teach for beer.

Good luck it is a wonderful way to spend 10 years.

Phil

[Doubleplay]

Originally Posted by s/v Moondancer

WS, we cruised for 11 years and anchored out 95% of the time and spent 6 years in the Keys, Bahamas and Caribbean almost never staying at a marina but you do need a great anchor and lots of chain.

If you semi-base yourselves in the US Virgins your husband could work.

What broke our budget was the fact that everything on a boat has a replacement cycle...our boat had had a complete refit except for the 15 yr old standing rigging. In 5 years we replaced all the standing rigging. Then overtime everything else started to fail...

I replaced every pump, airconditioners, refrigerator/freezer, sails, reconditioned every thing attached to the engine and generator including the transmission. You are very wise to keep a big reserve.

It is also important to keep a home in the US, we have friends who developed serious medical problems and had nowhere to go.

Repatriation insurance is very important as your health insurance is unlikely to pay out of the US, we used DAN the dive outfit and they were excellent for two evacuations I arranged. While many think that healthcare is good and cheap outside of the US that is just not true. A friend with a broken back and partial paralysis would have been paraplegic but for a $50,000 evacuation. Another friend got a $29,000 hospital for a ruptured appendix.

Good luck it is a wonderful way to spend 10 years.

Basic healthcare anywhere in the civilized World is way cheaper than US and outcomes are same or even better . I'm not sure if you ever traveled or cruised anywhere else but Caribbean,Keys and Bahamas? If not you have no idea how expensive these areas you mentioned are.

[s/v Moondancer]

Doubleplay,

As a pediatric intensive care doctor who sailed to 30 countries I can assure you that unless you are in a European or an ex-British ex-colony that serious medical problems are not well handled or that cheap...Basics yes, cardiac problems no.

A friend had cardiac problems in Bonaire, a local would have been flown out on the Dutch medevac jet, he had to find his own way to Miami. Another friend had a flesh eating bacteria of his leg while in Mexico...if we had not all chipped in and paid his airfare back to Canada he would have lost the leg.

[Doubleplay]

Originally Posted by s/v Moondancer

Doubleplay,

As a pediatric intensive care doctor who sailed to 30 countries I can assure you that unless you are in a European or an ex-British ex-colony that serious medical problems are not well handled or that cheap...Basics yes, cardiac problems no.

A friend had cardiac problems in Bonaire, a local would have been flown out on the Dutch medevac jet, he had to find his own way to Miami. Another friend had a flesh eating bacteria of his leg while in Mexico...if we had not all chipped in and paid his airfare back to Canada he would have lost the leg.

Hi Phil,
You are talking about exceptions not the norm.
My daughter in law and her father are both physicians one being a surgeon here and I know how the system works here in the US very well. Also whatever it's worth I traveled to over 40 countries and lived in quite a few for extended periods. There's no where in the DEVELOPED World a more expensive system where you pay thousands of dollars to set a broken bone, blood work, prescriptions , basic operations,MRI or routine care than the US with same or better outcome. The key word here is the basic! and don't start me from dental care...