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**David M** · 21-07-2010, 08:36

Play nice gentlemen.

jallum · 21-07-2010, 08:49

It seems that many of us that plan to be (or have been) at this for a while are fairly debt free, regardless of income or earning potential (which, for most, is greatly diminished during the time spent aboard)... When you're highly leveraged, small disruptions in cash flow, poor planning, or unforeseen events can put you at the mercy of someone that has actual money. So, while being rich has been ruled out as an absolute requirement, the issue of debt strikes at the heart of the questions posed.

So, how do people do it?

1) Be actually rich. While OP has the potential to be, he currently isn't, and won't be along his stated path. So, moving along...

2) Live within your means (controlling or eliminating your debt load is a huge part of this), choose a vessel that supports life at a sustainable level of comfort and be content with your choices. It ain't sexy, but it works.

Most of us I'd wager, fall into category two, though category one is probably more fun if you can swing it.

kb79 · 21-07-2010, 08:51

Quote:

Originally Posted by jallum

You're kidding, right?

Most of the boys that frequent this joint would be so lucky to have a wife that's as tolerant - not to mention eager - as yours seems to be. Mine barely puts up with boat nonsense at times... and ours is a palace.

nope, not kidding. she's incredible and i wouldn't trade her for all the swan 57's in the world (even if they were bought and paid for

)

SaltyMonkey · 21-07-2010, 08:55

Doodles, Tia - so are you now marginalizing the focus of monetary planning and responsibility by trying to redirect the discussion to the motivations of the post responses? Is that your way of trying to drive more posts or contributing something worthwhile, or maybe just shifting the focus onto something you feel more comfortable with and for yourself? Please, a break from cheap devices.

David_Old_Jersey - he doesn't need to sell the boat (notice I didn't say his boat because he doesn't really own it yet). He just needs to refinance that CC and as I remember he also has a 10% loan on the boat which he should dump too so he can really own it. Failing that, maybe another longer term loan at the bank that has a smaller payment? Because that 10k can easily add up to 60k when you start taking into account processing fees, late fees, interest etc. The banks just love that additional load they place into the principle. Why? That's how they finance those FREE and easy credit for everyone - off the small minority of risky cc holders.

The school loan unfortunately is a problem, but paying that off minimally every month should at least keep muster. Deferring is NOT a good idea because that principle is a killer, but if you have to you have to. Usually a 30 year problem.

Otherwise, el government and el bank will freeze your cruising kitty bank funds faster than the blink of rod rig coming down, and they are very very good at doing that these days no matter where you stash your funds - all before you get your chance to cry to mama court and declare bankruptcy - which is also very difficult to get these days. And, entering US waters will open up seizing your yacht, which I have no idea what they will do with since they always price em too high on the market. Want to play games and try to hide that cash and play with credit cards when they are on your tail? Felony is a nasty word for $ over 250.

I still think waiting to the spring may be the best bet - thats hardly a blink of time: 6-8 months is nothing. That would give them time to get used to the boat and actually spend time living on it. She can quit her job before then, and I think that would relieve some pressure and help prepare things. Also see how this whole merger/acquisition thing plays out. The losers get a severance; the winners get a bonus. Been there; done that in both scenarios.

If you take away the loans etc, they have done pretty well according to my own calculations. The boat, outfitting costs seem spot on target to what I calculated. The cruising kitty planning is difficult to estimate. I'm still trying to tackle that issue. One thing I've learned is 1) plan and save for the kitty first and then deal with a boat 2) always always be flexible in your timing and thinking.

In the merchie world: good captains are sailors; but great captains are economists and businessmen.

jallum · 21-07-2010, 09:09

Quote:

Originally Posted by kb79

nope, not kidding. she's incredible and i wouldn't trade her for all the swan 57's in the world (even if they were bought and paid for

)

I dunno... You haven't seen how one of these old s&s beasts were built...

my other half jokes about buying a cattle prod to keep the fresh talent at bay.

SaltyMonkey · 21-07-2010, 09:20

Quote:

Originally Posted by VirtualVagabond

kb79 is not average. He's obviously smart. Maybe a little naive, but give him a break, he's half most of our ages.

In the great indifference of nature, the sea, the law, and the world at large, you don't get credit for something you have no control over, or made no effort to gain through discipline. Luck is not a commodity you can bank on.

When I came out of school and hit the market I made 400% gains from my income in my first 4 years. Worked on Park Ave. Lived in a basement apartment and saved saved saved for my boat. Had holes in my shoes. Ate beans and rice for a year. Left in 2.5 years - debt free and 3 years of kitty. WTBFD?

David_Old_Jersey · 21-07-2010, 10:07

Appreciate the OP set with his idea (and why not - he gets to live with the consequences

) - but how about a compromise?, OP gets to keep working until the merger happens (or a year - whichever is earlier), but wife gets to either stop work or go part-time to improve the work / life balance for both. Maybe she could take the opportunity to get hands on with the boat or add some skills / education to her CV. or simply gain a black belt in daytime TV

for 6-12 months.......she's intending to stop anyway so that principle is covered.

BTW on a general point, I don't see most saying don't go (young-ish) out of principle or jealousy - just out of concern for the financial hole likely to dig in the circumstances described. and of course all responses written for the benefit of the internet ether as well as for OP.

"Go Now! Go Broke!"

SaltyMonkey · 21-07-2010, 10:24

Not even a whole year. We are in the hurricane season through November. Three months of winter till March or April. Move aboard asap. Have the admiral quit job in September. Take welding, woodworking, navigation, and diesel classes. Hopefully, layoff in January - submit unemployment till it runs out. During this time make your skipping and shakedown start in spring or early summer collecting unemployment along the way. Then when that runs out, or you have the system down pat and paid off that 10k, head west.

detav007 · 21-07-2010, 10:36

KB, seems some people are coming down on you a bit hard. I say it's your life and you should do what you want with it. Since you're planning on paying the CC while you're out you should just pay it off entirely since you'd come close to $10k in payments in two years anyway then you'd have it in an emergency. You should go and do it!! I'm envious and wish I were in your position.

Good luck to you and the wife.

DaleM · 21-07-2010, 10:50

I'm 53, working at a job I dislike but making good money, married and no debt and my wife is working too, no kids but I think I have more in common with you than might be apparent.

My wife wants a secure retirement, I want to go cruising because I see the opportunity declining as I age. I could work until I'm 62 and have the secure retirement then go cruising. The big "IF" is will we still have our health? My job is stressful, I know people that have died since I started working here. A secure retirement and cruising are opposed to one another and if I work towards guaranteeing one I may not ever get the other.

You and your wife want kids, you both want to cruise, your current lifestyle is not good and want to make a change. I guess my question is what is your first priority? Cruisng or children? If you go cruising and come back broke, will you have children with no money and no isurance? Will you be able to get a job quickly? And if you don't have kids because it took you a couple of years to get insurance again, is that an acceptable risk in exchange for cruising for two years?

I have answered my puzzle by saying to hell with the secure retirement. I'm saving, fixing up a boat and working. In a few years I hope to quit my job and start cruising with too little money but enough to start over if needed. It is irresponsible in some ways, my wife could outlive me and die poor or we could both live long and die poor. But I've learned that the only way to guarantee a secure retirement is by either 1. saving a lot more money than I can ever spend or the government can ever inflate away or 2. die before I run out of money. So I've written off the secure retirement.

I've got a boat I'm fixing up, I'm saving to have enough in the kitty to have a $16,000 per year income forever (not there yet), I hope to rent the paid for house too. Are we rich? Being debt free with enough in savings to quit for a while is rich but living on so little will be poor?

There is no right answer. I can work till 62 and fall over dead and my wife spend the money on a pool boy (good for her)! I can quite earlier, cruise and have to work along the way, I can cruise for a while and end up broke and old or I could cruise and it will work out great. Life is risky, I've heard that it is fatal in almost all cases.

Good luck in whatever path you choose,
Dale

kb79 · 21-07-2010, 10:51

Quote:

Originally Posted by detav007

KB, seems some people are coming down on you a bit hard. I say it's your life and you should do what you want with it. Since you're planning on paying the CC while you're out you should just pay it off entirely since you'd come close to $10k in payments in two years anyway then you'd have it in an emergency. You should go and do it!! I'm envious and wish I were in your position.

Good luck to you and the wife.

thanks for the words of encouragement. you bring up an interesting point - if i paid the CC off now, it'll cost me $10K. min payments are approx $150/mo - over 24 months, that's a "savings" of $6400 that i have by not paying it off before we leave (savings in quotes because i recognize that people will immediately start screaming about the raping i'm getting on interest payments...). point being that i won't actually come all that close to $10k in payments while i'm gone. boat payment is $360/mo. student loan is $150/mo. add those up and you've got $660/mo - extended over 24 months is $15,840 that i'll be paying while we're out because i owe people money.

if we were planning on leaving with $34K and no debt, i wonder if people would still think i was such an idiot...? because (at least as much as it relates to our financial reality day to day as we sail), it'd be functionally the same thing and i bet people would be a lot less judgmental.

SaltyMonkey · 21-07-2010, 11:12

What kind of convoluted logic is that? You're not "saving" anything by not paying it off. Dont know what you mean by "saving" $6400? Minimum payment is NOT keeping your balance down. Your principal will still rise because you minimum doesn't cover the FULL interest you owe and it will compound. Where did you ever get the idea that a CC is a loan or gift anyway???

Your monthly payments don't equate with your "34k and no debt" because they are much more than that when you add it up, included opportunity on that money wasted. 34k is not enough for two people.

$15,840 is a full extra year of kitty if you just take that $ at base value. There's your re-entry cash.

Judgement still stands

kb79 · 21-07-2010, 11:15

Quote:

Originally Posted by SaltyMonkey

Judgement still stands

i figgered it would...

RayW · 21-07-2010, 11:18

What I'd do if I were in your shoes...
Both work for one more year living the boat budget lifestyle and making approx $157k (after taxes $90,000 ?). In that year pay off the boat and CC. Put the remaining $$$ in saving/cd/whatever you choose for re-entry. Then you have the money you have now, less debt, and a re-entry fund of $20,000 - $30,000 and a CC for an emergency.