Planning cruising and savings

[Group9]

Originally Posted by denverd0n

Bottom line is that it is a balancing act. You don't want to wait too long. At the same time, you don't want your money to run out too soon and end up destitute in your final years. So you walk a line. Every person has to draw that line for themselves, where they are comfortable. No one else can draw that line for you.

I guess the main thing is to realize that you ARE drawing a line. I think there are a lot of people who never think about it, and stumble along without ever realizing that there is a line there, even if they don't know it. If you give it some thought, realize the different criteria that you are balancing, and make a rational decision, then you are light-years ahead of most of the population no matter what your decision is.

Good luck.

In the end, this is the crux of the issue. Everyone's bank of available money, versus avaiable time and health, is their own. And, the line that they draw on the calendar, is going to be based on their calculation and their weighting of those three factors ( and, probably a few others as well).

You make your best guess, and you take your chances!

People want to feel assured that everything will be all right with their decision. How wonderful it would be, if only life ever allowed us that assurance.

[hamburking]

The funny thing about money is that its never enough.

To the guy who lives on the street, $100 would be a godsend.
The guy with a million bucks wants another million. Donald Trump wants be a billionaire...his hundreds of millions just aren't enough!

Just about everyone wants a bigger pile, regardless of the size of current pile. We all want to feel financially secure. We are trained to crave comfort and security. IMHO, that's why most people DON'T sail...sailing is often uncomfortable, risky and uncertain.

Even this discussion demonstrates the uncertainty. Will a hurricane ruin your plans? Will an engine failure deplete your savings? Maybe you'll collide with a container...there goes your boat!!!

To me, a big part of sailing is embracing the uncertainty, taking the risk, venturing into the unknown. Mark Twain said the hardest part of any trip is casting off the bowlines.

There will never be enough money. Or enough time. The real limit is time...life is short. You can make more money. You can't make more time.

[boatman61]

Originally Posted by hamburking

Thank you...in reading the posts you are the first to say a number, $150k usd. Thats a starting point, at least. And its way less than the million that keeps popping up.

Another post mentioned that its hard to calculate a number because they don't know how long they might live. Well, if you can't let go of the purse strings, then maybe you are already dead.

Damn.. If I had that to work on I be set for life.. and thats before buying a boat..
Shoot.. 150K along with my basic state pension would see me living like a king as I went RTW..
But then I am a simple man with simple needs.

[Cadence]

Originally Posted by Bob Morane

Projecting 15% return a year seems a bit optimistic to me.
Or maybe you know something I don't.

It is probably listening to the annuity people that use, the fund has done this in the past. In most cases it's locking your money up for a fixed period. You need to be an insurance lawyer to understand it. It probably is better than market based investments? One should just make sure they won't need to draw on their funds during that period or suffer one hell of a penalty. They are probably good if someone has that term covered by other funds in a catastrophe.

[Lonestaralaskan]

Originally Posted by Bob Morane

Projecting 15% return a year seems a bit optimistic to me.
Or maybe you know something I don't.

I actively trade options and equities. It tends to net a higher rate than just throwing it in a mutual fund and leaving it.

[Jerry Woodward]

Perhaps this has been said already (I didn't read every post). Another option, if you can swing it, is to reduce your work by 25-50% and cruise part time for a few years, or take a 1 year leave of absence. I don't know what kind of job you have, but you may be able to convince your employer to do this. This gives you time to ease into cruising without completely burning bridges. You will also have a much better idea of what your needs are and whether you both really want to do this full time.

I also like the idea of having something to come back to when I'm done cruising. It will happen to everyone, at some point health will decline or some life event will happen. Do you own your home? I grew up in Southern California and know how expensive it is. Is this going to be your permanent residence? Can you afford to live there when you are done cruising? Unless you own a home in So. Cal, I would consider finding a less expensive place to retire in 10-20 years, then go cruising with real peace of mind.

[Lost Horizons]

Originally Posted by Jerry Woodward

I also like the idea of having something to come back to when I'm done cruising.

Long range cruising also presents an excellent opportunity to finding a new home elsewhere.

[Lost Horizons]

Originally Posted by Bob Morane

Projecting 15% return a year seems a bit optimistic to me.
Or maybe you know something I don't.

With a good discipline you can easily do that with an index mutual fund.

[Bob Morane]

Originally Posted by Lonestaralaskan

I actively trade options and equities. It tends to net a higher rate than just throwing it in a mutual fund and leaving it.

Originally Posted by Lost Horizons

With a good discipline you can easily do that with an index mutual fund.

Thanks for the information, I'll look into it.
Being young"ish" I haven't looked into investment yet.
I'm pretty conservative so I assumed a 5% average yearly growth.

10-15% would be a massive game changer for me.
Anyway good luck for your saving plan, hopefully I won't be too far behind.

[Steve Olson]

I think a lot of it has to do with how badly you want it. I'd rather live to a meager budget than wait and gamble with health. Of course you need some money for expenses, food, etc., but figuring out how to make it can be part of the adventure. We will be heading for Mexico and beyond this Summer. I am 43 and the girlfriend is 25 - I could not imagine waiting longer. We only have this one life to live. I see far too many people who start cruising so late in life. As with most things in life, if there's a will, there's a way.

Steve
www.svjeananne.com

“To be truly challenging, a voyage, like a life, must rest on a firm foundation of financial unrest. Otherwise, you are doomed to a routine traverse, the kind known to yachtsmen who play with their boats at sea... "cruising" it is called. Voyaging belongs to seamen, and to the wanderers of the world who cannot, or will not, fit in. If you are contemplating a voyage and you have the means, abandon the venture until your fortunes change. Only then will you know what the sea is all about.

"I've always wanted to sail to the south seas, but I can't afford it." What these men can't afford is not to go. They are enmeshed in the cancerous discipline of "security." And in the worship of security we fling our lives beneath the wheels of routine - and before we know it our lives are gone.

"What does a man need - really need? A few pounds of food each day, heat and shelter, six feet to lie down in - and some form of working activity that will yield a sense of accomplishment. That's all - in the material sense, and we know it. But we are brainwashed by our economic system until we end up in a tomb beneath a pyramid of time payments, mortgages, preposterous gadgetry, playthings that divert our attention for the sheer idiocy of the charade.

"The years thunder by, The dreams of youth grow dim where they lie caked in dust on the shelves of patience. Before we know it, the tomb is sealed.

"Where, then, lies the answer? In choice. Which shall it be: bankruptcy of purse or bankruptcy of life?” -Sterling Hayden

[2savage]

IMO retirement and full time cruising is something you ease into. When I was young my father said 'the best way to cross stepping stones on a river is to make sure your next stone is steady before leaving the last'. What we're talking about here is a transition from work/income to relying on savings/SS as well as a transition from land based expenses to water based.
Each is a separate subject and the juxtaposing of the two holds your answer.

[Captain Randy]

Thanks Steve Olson and everyone for sharing your thoughts. Everyone's point of view is well taken with the theme really of go now. Hardly anyone has shared (other than myself) what amount they have set aside or believe is prudent to have in the bank be it IRA's, investment accounts, savings etc. We have addressed SS payments and the need to plan when is best to take them, pensions and investment strategy returns. With that said and foregoing monthly income what do you have or feel you should have to retire (liquid and/or in investment accounts) and take off cruising at around age 60 while understanding you may have to or want to go back to land based at 70 or 75 depending on needs, health etc. thus allowing for 10-15 years on the boat cruising.
Thanks
CR

[Lonestaralaskan]

Originally Posted by Captain Randy

Hardly anyone has shared (other than myself) what amount they have set aside or believe is prudent to have in the bank be it IRA's, investment accounts, savings etc.
CR

I have details on my website, but basically this is the plan.

My family has a goal of $300k in our brokerage account, to be divided up as follows:

$125k Boat, repairs, start-up costs & gear

The leftover $175k will generate income which we will use. At my projected rate of 15% per year, we will generate $2,187 per month in income from investments. We have another source of income around $500 per month. We have a budget of $2550 per month, so we'll use $2,050 in investment income, $500 from our secondary source, and leave the nest egg alone for as long as possible.

If something major happens and we have to drain our core funds, we'll take that into consideration when deciding a good time to end our mini retirement.

Or, it all works out, we love it, and we sail forever. Who knows.

[Paul L]

Originally Posted by Lonestaralaskan

I have details on my website, but basically this is the plan.

My family has a goal of $300k in our brokerage account, to be divided up as follows:

$125k Boat, repairs, start-up costs & gear

The leftover $175k will generate income which we will use. At my projected rate of 15% per year, we will generate $2,187 per month in income from investments. We have another source of income around $500 per month. We have a budget of $2550 per month, so we'll use $2,050 in investment income, $500 from our secondary source, and leave the nest egg alone for as long as possible.
......

What is the investment that is throwing off 15% annually?

[Lonestaralaskan]

I trade stocks and options.

For options trades, I sell out of the money vertical put spreads that have a high probability of success. I have a blog post that explains the methodology.

I also trade some stocks. Mostly swing trades. I don't have time for daytrading and probably couldn't make a profit from it if I tried. But finding a few stocks that are on the uptrend and letting them sit for a few weeks seems to work pretty well.

I know traders who make 25%+ per year, so my 15% isn't really that much.