Sold my company - want to sail - but can I?

[Zai]

You asked for thoughts so here is an "out of the box" perspective.

Start small to get experience, easy to move up once you are in the groove and are sure about where you are going.

Could be that many of your perspectives will change.

[LivingWhale]

Originally Posted by Zai

You asked for thoughts so here is an "out of the box" perspective.

Start small to get experience, easy to move up once you are in the groove and are sure about where you are going.

Could be that many of your perspectives will change.

True - I was looking at a 50' cat, so this feels scaled back . I'm trying to scale back, though I'm used to spending a bit more. It's a mindset adjustment. We've lived with little and with much, but we can be content either way. I would hate to go any smaller and feel cramped. We project that the kids and their spouses will join us occasionally, so we need a little room. very good thoughts. I appreciate all valuable input!

[tomfl]

Originally Posted by LivingWhale

SNIP

I've read countless forums on living on a boat for as little as $600 per month, but it seems to me that food alone will cost that much.

SNIP

Even a boat with a nice galley will not have the space of even a small apartment on land, especially for foods that need to be kept cold. It is common to carry a lot of what I call low cost foods like rice, beans, pasta, canned meat, and other canned goods. I tend to shop at a big box store like Walmart and stock up on these food stuffs every couple of months or so. Maybe once in a while I will get a steak but fresh meat is not on the menu very often because I have very limited freezer space and fresh meat won't keep very long.

When I cruise I tend to catch fish on a somewhat regular basis. Even when I am on a mooring (I stay in the Keys) I get fish or lobster on a fairly regular basis. I am sure some folks stay at the dock and buy expensive food on a regular basis and prepare it on the boat at a cost higher than it would be on land. But I am able to eat a diet of something like yogurt and coffee for breakfast, a cheese or peanut and butter sandwich for lunch, and some type of meat and rice or pasta for supper for about $US200 a month. I simply don't eat out.

You did not make it clear if you were going to spend all/most of your time on the boat or live in your new home and just go to the boat on weekends. There is a huge difference in the lifestyles and this accounts for the huge difference in how much one spends per month to do it, whether you are on a boat or not.

[sailorchic34]

Cost of living will of course go up quite a bit over then next 30-40 years. Just looking back to 1980, when a nice car could be purchased for about $10k and homes were $100-$150k.

$5500/month, actually sounds a bit low for your home and cat costs. Based on others budgets floating about here, your probably into $4k/month minimum just for the boat, when cruising. Marina fee's and boat maintenance if you don't do it yourself, will be pricey on a cat, less so on a mono. If your dead set on a cat and keeping a house then you need to factor in a bit more I'm thinking. Flights back and forth from house to boat. Car rentals, etc, etc,

Another option for the worst case, would be to sell the house and keep the boat :-). That may seem radical now, but if you find you love the water, it's not all that hard to contemplate. Houses are easy to find and the savings in yearly upkeep might make that viable over a 10-15 year cruising life.

BTW, I'm one of those folks living on <$600/month in northern California. Currently enjoying a lovely summer in the CA Delta. Needless to say I don't worry about a house or marina's, or taxes for that matter, at that price point. My food budget is only $180/month. Budget shopping all the way.

[ArtM]

Originally Posted by LivingWhale

True - I was looking at a 50' cat, so this feels scaled back . I'm trying to scale back, though I'm used to spending a bit more. It's a mindset adjustment. We've lived with little and with much, but we can be content either way. I would hate to go any smaller and feel cramped. We project that the kids and their spouses will join us occasionally, so we need a little room. very good thoughts. I appreciate all valuable input!

There is such an enormous space for variation here - amount of time you plan to spend on the boat, whether you plan to travel on the boat, the amount of surprise you will feel when you friends and relatives tell you that they don't like boats, don't like the sun, and don't like the water, and so much more.

50' is a very large catamaran. It's a pretty good sized monohull!

600/mo is not a figure for maintaining a 50' catamaran. It's a figure for someone with no healthcare costs, no possessions in the world to maintain except for their boat and a few things on it, and no ambitions except to live on that boat and enjoy the outdoors. That boat is typically very old, very average in size and amenitiies, and very inexpensive to maintain and operate. They are often anchoring at sea and may be riding a plastic kayak to get to shore for supplies or entertainment. Food is their largest expense, and it is very basic. Some will stretch this budget by spending time in remote destinations where basic food and services can be obtained very, very cheaply.

[LivingWhale]

Originally Posted by tomfl

Even a boat with a nice galley will not have the space of even a small apartment on land, especially for foods that need to be kept cold. It is common to carry a lot of what I call low cost foods like rice, beans, pasta, canned meat, and other canned goods. I tend to shop at a big box store like Walmart and stock up on these food stuffs every couple of months or so. Maybe once in a while I will get a steak but fresh meat is not on the menu very often because I have very limited freezer space and fresh meat won't keep very long.

When I cruise I tend to catch fish on a somewhat regular basis. Even when I am on a mooring (I stay in the Keys) I get fish or lobster on a fairly regular basis. I am sure some folks stay at the dock and buy expensive food on a regular basis and prepare it on the boat at a cost higher than it would be on land. But I am able to eat a diet of something like yogurt and coffee for breakfast, a cheese or peanut and butter sandwich for lunch, and some type of meat and rice or pasta for supper for about $US200 a month. I simply don't eat out.

You did not make it clear if you were going to spend all/most of your time on the boat or live in your new home and just go to the boat on weekends. There is a huge difference in the lifestyles and this accounts for the huge difference in how much one spends per month to do it, whether you are on a boat or not.

Great points. So, if it costs you $200 a month, then would i be right in assuming that for 2 people it would double? I like the idea of eating the fish I catch, but I figured I shouldn't count on it. Also, to clarify, we plan to spend half the time in each location. That will definitely factor in and gives me more food for thought (pun intended). Thank you!

[sailorchic34]

Originally Posted by ArtM

600/mo is not a figure for maintaining a 50' catamaran. It's a figure for someone with no healthcare costs, no possessions in the world to maintain except for their boat and a few things on it, and no ambitions except to live on that boat and enjoy the outdoors. That boat is typically very old, very average in size and amenitiies, and very inexpensive to maintain and operate. They are often anchoring at sea and may be riding a plastic kayak to get to shore for supplies or entertainment. Food is their largest expense, and it is very basic. Some will stretch this budget by spending time in remote destinations where basic food and services can be obtained very, very cheaply.

^THIS IS a great description of the $600 cruiser. Gee ArtM its like your stalking me, LOL. Nothing wrong with an older/ mature vessel or boat for that matter. It is cheep to maintain. Something a 40-50' cat will not be. Gee two engines and probably saildrives to boot, lovely. That gets pricey just with typical maintenance.

[hpeer]

Cruisers forum has a sister site dedicated to early retirement financial planning. They have an excellent online calculator.

It looks simple at first, but as you play with it you will find it rich with options.

FIRECalc: A different kind of retirement calculator

[ArtM]

Originally Posted by Zai

You asked for thoughts so here is an "out of the box" perspective.

Start small to get experience, easy to move up once you are in the groove and are sure about where you are going.

Could be that many of your perspectives will change.

Or, to build on this, start by renting one and owning the other.

Or better, build an understanding in yourself as to why you feel the need to maintain both homes. This is very costly, as each has upkeep costs while not in use.

[HopCar]

"My concern is 10 years from now things be twice as much, would make it less doable."

You are right to be concerned. Inflation reduces the value of your money every day. You need to invest it so that it throws off enough income to offset most of your early living costs and yet has the potential to grow as money becomes worth less. In your later years you can draw down your principle to pay for a nice nursing home.

You estimate you'll need $5500 per month to live. If inflation stays fairly low at say 3%, you'll need $6000 per month in only three years.

My lawyer is a smart young man about your age. He keeps telling me cash is king. He's wrong, cash is paper, the same stuff you wipe your butt with.

[Ex-Calif]

Originally Posted by cwjohm

If I read your post correctly

You are 45 and just sold your company
You own a house worth $300K which presumedly you wish to keep
You want a boat worth $250K which presumedly you may sell down the track
You have an additional "nest egg"
You do not want to work again until you "pass"

Your assumptions

It will cost $6500 per week to live i.e. around $80K per annum including all costs for house and boat. This assumption is quite reasonable.

You need to allow 10% diminishing value for depreciation on your boat or otherwise spending the equivalent to keep it up to scratch. If you are including the boat in your nest egg then you need to factor this in.

Basically you should consult a financial planner for a proper plan.

However, as to the future cost of money to fund $80K per annum from 45 until "passing" and if you do not work again you would need at least $2 million for your nest egg and it would have to be well invested.

Hope that helps

Great post - This is not a boat question. It's a financial planning question.

45 years to passing is a long time. What's a loaf of bread gonna cost in 2035? 2045?

To be secure your capital needs to be preserved and it needs to appreciate with inflation.

Whatever "toy" you buy in retirement - log cabin, RV, boat, airplane. Needs to have an exit strategy (how much of my capital can I "really get back?)

My strategy is a Viking funeral. When I can' sail the boat tie it at a dock. When I can't get on a off the boat, launch it to sea with me on board, set the Otto and set it on fire...

[hpeer]

I had a good friend who used to quip his retirement plan was to die early. He did, 58.

He remarked on that irony in his last hours.

Just saying.

[chubby]

Originally Posted by LivingWhale

My wife and I are in our mid 40's. We sold our company and have a decent nest egg. I've read countless forums on living on a boat for as little as $600 per month, but it seems to me that food alone will cost that much. We're thinking of having a small home inland and then docking the boat between NC and FL. So, docking fees won't be cheap either and a catamaran is a must, which provides more challenges. I can overcome most obstacles, but I think it's wise not to bite off more than I can chew. Our nest egg has to last until we pass, so running out isn't an option. I'm hoping that someone out there is doing something similar and can help me with the costs. I will have the home and boat paid for (thinking 40' cat about 10 years old for about 200K give or take). I have calculated monthly raw costs at about $5500 for home taxes (home will be worth about 300k) insurance, etc etc and boat dockage, insurance, food, etc etc. My concern is 10 years from now things be twice as much, would make it less doable. Thoughts? Advice?

well.
i'm late 30s.
sold my businesses and bought a ~10 year old 40' catamaran within the last year and went sailing.

u know there are 2 side to that cash flow equation...and (for me at least) it was a lot easier to make things work if i got rid of my stuff...

meaning no liabilities..

no house. no bills. (well i did still have student loans of ~400/month)
got rid of my personal residence...but did keep some income producing properties

i gave myself a budget of 3k/month....but was generally 1-2k under that budget.
that includes boat insurance of roughly 250/month..
food= ate out ate least once per day and lots of fish, papayas, plantains and mangos...
anchoring is free of coarse.. dockage in central america ranged from 300-600/month (boat is currently in storage for hurricane season)

quotes for paint & fabric work in central america was also significant less than expected..

biggest monthly expense so far was actually renting cars long term....

tr;dr version: is easier to keep costs lower in "cheaper" locations

[carstenb]

On another thread someone remarked that while you think you're going to radically change your lifestyle when yougo aboard - you don't.

So if you spend 2-3 grand a month for food and eating out while on the hard - you will do the same while living aboard - unless you place yourself in situations where this simply is not possible (making passage or anchoring places where there are no expensive restaurants)

We're getting close to selling everything and going RTW. We're figuring on a monthly budget of between 3-4 grand for everything. That's a 40 foot monohull where we repair everything ourselves (virtually).

On the ohter hand - we like our luxuries so we will eat out and we will rent cars etc etc.

If you want ot make a draconian budget. Figure that the exit recoup on the the boat is -0- And figure that the maintanence costs are 10% of purchse cost annually.

Pure living costs, food clothes booze, sightseeing docks etc - figure 1500-2000 per month, include 2% compounded inflation.

Can you afford that? if so - you will have no financial worries - because reality will cost you less. Can't afford it? Start thinking about scaling back. smaller boat, smaller house, etc etc.

[Kenomac]

Buy a boat in Europe (they're cheaper here), sail into the Med., forget about a land-based life and don't look back. Can be done easily on much less than your budget $2000-$3000 per month is enough. During our months at anchor, my budget comes in at less than $1500 per month. Much more to see over here, better food, nice people etc. (see Mallorca meetup thread)

Also, don't hesitate to look at powercats or trawlers, they would be ideal for your plans.