Budget Be Damned

[letsgetsailing3]

Originally Posted by Paul L

Do you know what the market will be for real estate, stocks, bonds, CDs, US dollars, Euros, or bitcoin when you stop cruising? Of course not, but there is still no reason to value that stuff as zero when financial planning. A boat is just another asset when its time to stop using it. Valuing it low is conservative, valuing at zero is just bad data.

There's a difference between an investment and a depreciating asset with carrying costs. If you keep it long enough, the value does go to zero.

Also, people tend to overvalue their depreciating assets. Just look at the boats that languish on the boat market as their owners pay to keep them in slips!

Valuing it at zero is a conservative approach, but valuing it higher is also valid, as long as it's realistic.

[Paul L]

Originally Posted by letsgetsailing3

There's a difference between an investment and a depreciating asset with carrying costs. If you keep it long enough, the value does go to zero.

Also, people tend to overvalue their depreciating assets. Just look at the boats that languish on the boat market as their owners pay to keep them in slips!

Valuing it at zero is a conservative approach, but valuing it higher is also valid, as long as it's realistic.

Sure there's a difference. There's also a difference in significance if the asset is .05% of your portfolio or 15% of it. Either way, I'm still looking for all these well cared for cruising boats that are worth zero when the cruisers are done. There must be a lot of them if so many posters preceive the value of their boats as zero at the end of the cruise. My offer to contract for them for $1 is still on the table.

[zboss]

Originally Posted by a64pilot

An issue is that the Stock Market during that time has been performing at nearly an all time high.
That isn’t sustainable long term I don’t think. I’m glad it’s been doing so well, my net worth has increased slightly over the past few years after Retirement.
However I feel that will come to an end eventually, and then we will all pay the piper.

No... but investing in blue chip companies that pay dividends has been a winner approach for a long time. Sure, companies can stop paying dividends or reduce dividend payouts but if you invest in a basket of stocks you can mitigate those risks. If you keep enough cash on hand top cover a few years of a stock market down turn, even with a reduction of dividends, it'll turn out ok.

What Sailorboy didn't mention in his account is lost opportunity cost. If he had been out working and let that money accumulate instead of being spent, that's most likely a very large chunk of change.

Of course - someday you need to go belly up and stop working!

Originally Posted by kmacdonald

It's important not to ride a bear market to the bottom. For example: if you have $100K invested in the market and the market drops 50% you now have $50K. If the market then rises 50% you only have $75K. The market would have to rise 100% to get back to the $100K. Something I'm sure you already know but reminders never hurt.

Not if you are dollar cost averaging.

[thomm225]

Everyone suddenly is an expert investor that stayed in the market these last ten years and didn't get out or was forced out in 2008-2009

It's hard not to have done very well in the stock market over those last ten years if you were not forced out or got out for one reason or another at the worst possible time

The market was around 6800 in Feb/Mar of 2009 and it's just over 26,000 now. (The high in 2007 was near 15,000)

Not rocket science to have made a few bucks, but where it goes from here is the big question..........

[Kenomac]

Originally Posted by a64pilot

Ken, if memory serves I remember you saying you had to replace all the pumps in your boat soon after buying, had to redo the teak deck, which I’m sure was a huge amount of work and I’m sure other things.
Not beating on your boat, just saying it’s the nature of a boat.

Replacing eight pumps which cost maybe $2200 in total on a 12 year old, $600k boat which had been sitting on the hard for five years.... can hardly be considered a “major refit.” The teak deck on most boats of it’s age need some service, it was expected.

[daletournier]

Originally Posted by thomm225

Everyone suddenly is an expert investor that stayed in the market these last ten years and didn't get out or was forced out in 2008-2009

It's hard not to have done very well in the stock market over those last ten years if you were not forced out or got out for one reason or another at the worst possible time

The market was around 6800 in Feb/Mar of 2009 and it's just over 26,000 now. (The high in 2007 was near 15,000)

Not rocket science to have made a few bucks, but where it goes from here is the big question..........

At the risk of offending many "I agree" it's also what worries me the most.

The famous quote from Joe Kennedy comes to mind :

"They don't ring bells at the top, but apparently when shoeshine boys start giving stock advice it is time to head for the exits."

Most of the cruisers I cruise with have been out here 8-10 years. In that time they've got richer, many have all their wealth tied up in various funds, in fact just be passive and buy the whole market and you would of done well over the last decade. My dad, who's a great bloke thinks he's Jack the lad the investor, his house went through the roof and his managed fund just keeps going up, same with my brother etc. There's alot of people that have done very little, not produced, created or expended labor that are now savvy investors apparently?

Now don't take this the wrong way, I'm happy for them, in fact I to have benefited greatly by the wealth effect central banks have created BUT it's very concerning to me. Excessive debt has driven asset prices very high, is this sustainable? We need more and more debt to juice the system (bringing tommorows prosperity forward to now can't last for ever).

When I discuss money with friends, QE, Nirp (negative interest rate policy), etc most have no idea what I'm talking about yet they are fully invested in a system they don't understand, even a little.

But hey, they're still making money and I'm not

[sailorboy1]

Originally Posted by zboss

What Sailorboy didn't mention in his account is lost opportunity cost. If he had been out working and let that money accumulate instead of being spent, that's most likely a very large chunk of change.

Did somewhere on the thread, but:

If I were still working and doing the same as I was before leaving to cruise I would have probably around $200-250k more in assets than now.

And my second heart attack, a knee replacement or 2, the and a "kill me now please" attitude.

In the end the only real lost opportunity is ............................. life!

[daletournier]

Originally Posted by sailorboy1

Did somewhere on the thread, but:

If I were still working and doing the same as I was before leaving to cruise I would have probably around $200-250k more in assets than now.

And my second heart attack, a knee replacement or 2, the and a "kill me now please" attitude.

In the end the only real lost opportunity is ............................. life!

Well said, gamble time or money!

[OldMan]

Originally Posted by sailorboy1

Did somewhere on the thread, but:

If I were still working and doing the same as I was before leaving to cruise I would have probably around $200-250k more in assets than now.

And my second heart attack, a knee replacement or 2, the and a "kill me now please" attitude.

In the end the only real lost opportunity is ............................. life!

Exactly! IMO, work is a means to an end, it shouldn't be the end!!

[thomm225]

Originally Posted by Kenomac

Replacing eight pumps which cost maybe $2200 in total on a 12 year old, $600k boat which had been sitting on the hard for five years.... can hardly be considered a “major refit.” The teak deck on most boats of it’s age need some service, it was expected.

Ken you must be one hell of a nurse!

My mom was a nurse but in a different tax bracket

[a64pilot]

Originally Posted by Kenomac

Replacing eight pumps which cost maybe $2200 in total on a 12 year old, $600k boat which had been sitting on the hard for five years.... can hardly be considered a “major refit.” The teak deck on most boats of it’s age need some service, it was expected.

And yet, I had to replace no pumps, and no deck work as it’s not teak, on a 25 yr old boat. Of course I don’t have 12 pumps either.
I did however spent bunches of money fitting out, not a refit, but fitting out, my boat had never had the basic cruising gear installed to engine with, basic meaning autopilot, Radar, Windlass etc.
None was required I guess, you don’t need things like autopilots and windlasses, but they sure make life easier

However most boats, from cheap ones to one not so cheap often have the same or similar components, Yanmar engines, etc. difference is usually in construction, which hopefully needs nothing to be done.

However most boats, no matter how well built will due to age if nothing else need work, teak decks is an excellent point, but so is rigging, chain plates and tanks etc. even the pieces parts on an Oyster will eventually age out.
Besides, I know you, I bet you didn’t pay half that for that boat, not saying it wasn’t worth it.

[dfelsent]

Originally Posted by sailorboy1

Did somewhere on the thread, but:



If I were still working and doing the same as I was before leaving to cruise I would have probably around $200-250k more in assets than now.



And my second heart attack, a knee replacement or 2, the and a "kill me now please" attitude.



In the end the only real lost opportunity is ............................. life!

I’m with sailorboy1 on this.
And I’ve spent a lot of time doing quantitative analysis for investment management firms.

Opportunity cost is often measured only in hard currency. If we all really deeply believed that economic principle we would work til we were incapacitated and then live as meagerly as possible.

No one on this forum actually does that. We all spend on luxuries, even if it’s only a connection to the internet, or taking the time to go to a public access computer, so we can post here. [emoji3]

A significant opportunity cost is the cost of failing to enjoy life.

[dfelsent]

Originally Posted by Kenomac

Purchase a high quality product to begin with, and that doesn’t happen.

Sailorboy has his way of budgeting a good life for him and wife until death, and we have ours. His works for him and ours works for us.... both are the correct answers.

Lots of thread drift here, maybe it’s time to get back to the topic.

Hear hear! This ^^^

[thomm225]

Originally Posted by Fiveslide

Catamaran length for beginner - Cruisers & Sailing Forums

Thomm, this guy is literally asking about sailing a beach cat to Alaska, a thread right down your lane, and you're over here posting about tractor driving.

Tractor driving?

Do you know that on those two videos I showed involved about 2 million dollars worth of equipment and that's just the tractor, plow, and the three combines not to mention the other stuff

So, when you see the old farmer come in your store etc all dusty and what not he may be a bit more than you realize and will have one hell of an excel spreadsheet to reconcile after his 12 hour day is over

https://www.youtube.com/watch?v=lRkB...r7aDrkuQTkBngE

https://www.youtube.com/watch?v=HO-yhf3Z9cs

[Kenomac]

Originally Posted by a64pilot

And yet, I had to replace no pumps, and no deck work as it’s not teak, on a 25 yr old boat. Of course I don’t have 12 pumps either.
I did however spent bunches of money fitting out, not a refit, but fitting out, my boat had never had the basic cruising gear installed to engine with, basic meaning autopilot, Radar, Windlass etc.
None was required I guess, you don’t need things like autopilots and windlasses, but they sure make life easier

However most boats, from cheap ones to one not so cheap often have the same or similar components, Yanmar engines, etc. difference is usually in construction, which hopefully needs nothing to be done.

However most boats, no matter how well built will due to age if nothing else need work, teak decks is an excellent point, but so is rigging, chain plates and tanks etc. even the pieces parts on an Oyster will eventually age out.
Besides, I know you, I bet you didn’t pay half that for that boat, not saying it wasn’t worth it.

Eight years ago when we purchased the Oyster 53, the sales prices were averaging $550k-$650k. Our engine had only 625 hours on it and the generator 325 hours at the time. I was quoted $80k to have the deck refinished, so I chose to do it myself and save some money.