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Old 03-08-2017, 15:54   #1
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If you had a million dollars.....

If you could walk away from your land life......the jobs, the bills, all of it except your wife, kid, a truck, a homemade dinghy and a Yeti cooler full of cheap beer......with one million dollars in your pocket, would you? Now, I know that's chump change for some folks, but for the rest of you, would you do it? I'm talking about selling everything you've worked for to roll the dice on an adventure that will stick with a kid forever. Business, home, tools, equipment....all of it gone for a dream. Would you pull the rip cord?

For the sake of argument, lets assume that you are 39, married, one 9 year old child that really is brilliant, and everyone is ready for a year or three break. All parents and inlaws are alive and healthy. Let's also assume that the wife of the pretend 39 year old is only doing this on a cat, and she's not turning loose of a couple of dogs or going past the Caribbean.....yet.
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Old 03-08-2017, 17:01   #2
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Re: If you had a million dollars.....

Yeck I walked away with $5k. A million, you could spend $200k on a nice boat and live off the other $800k

You could even buy a fair boat for $60-$80k and spend another $200k enjoying life for a few years. Most folks can enjoy life for less then $40k a year on a boat. I do it on less then $8k ish a year. But I have few needs and a simple boat.
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Old 03-08-2017, 17:20   #3
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Re: If you had a million dollars.....

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.... Business, home, tools, equipment....all of it gone for a dream....
I'd say it depends on the nature of that business, tools and equipment...
Assuming you're the business owner, in some cases it could be managed by others, scaled down and/or even tweaked for operating from a boat or part time etc.
Which could provide a very useful source of income.
Tools and equipment? Clearly that depends.
As for "home"... nah, those are overrated anyway :-)
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Old 03-08-2017, 18:55   #4
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Re: If you had a million dollars.....

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I'd say it depends on the nature of that business, tools and equipment...
Assuming you're the business owner, in some cases it could be managed by others, scaled down and/or even tweaked for operating from a boat or part time etc.
Which could provide a very useful source of income.
Tools and equipment? Clearly that depends.
As for "home"... nah, those are overrated anyway :-)
The business is self employment at it's finest. There is value there to sell it, but it relies on our fictional 39 year old's labor for now. It wouldn't be manageable, for the most part, from a boat. This is, however, the kind of response I was looking for. More than half of the sum would be derived from the sale of real estate. A few houses that could be turned into income, as well as some tillable and pasture ground that could be rented. Tweaking the operation is much more appealing, but I'm afraid of waiting too long to start the adventure. As far as tools and equipment go......It's a bunch.
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Old 03-08-2017, 19:01   #5
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Re: If you had a million dollars.....

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Yeck I walked away with $5k. A million, you could spend $200k on a nice boat and live off the other $800k

You could even buy a fair boat for $60-$80k and spend another $200k enjoying life for a few years. Most folks can enjoy life for less then $40k a year on a boat. I do it on less then $8k ish a year. But I have few needs and a simple boat.

I'm with you on the $200k ish boat, but would rather not start over when the adventure is over. Maybe survive on the profit of some low labor investments???? We aren't opposed to fixing up boats and flipping them as we go, since we've been doing that with houseboats already. Is that a thing with sail boats?
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Old 03-08-2017, 19:08   #6
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Re: If you had a million dollars.....

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I'm with you on the $200k ish boat, but would rather not start over when the adventure is over. Maybe survive on the profit of some low labor investments???? We aren't opposed to fixing up boats and flipping them as we go, since we've been doing that with houseboats already. Is that a thing with sail boats?
People do flip sailboats and powerboats, but not sure how profitable it is. The cost of fuel for a power boat makes it a bit spendy filling the tanks.
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Old 03-08-2017, 21:01   #7
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Re: If you had a million dollars.....

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The business is self employment at it's finest. There is value there to sell it, but it relies on our fictional 39 year old's labor for now. It wouldn't be manageable, for the most part, from a boat. This is, however, the kind of response I was looking for. More than half of the sum would be derived from the sale of real estate. A few houses that could be turned into income, as well as some tillable and pasture ground that could be rented. Tweaking the operation is much more appealing, but I'm afraid of waiting too long to start the adventure. As far as tools and equipment go......It's a bunch.
Assuming I'm reading correctly between the lines, you could get out of the self-employed business with 500K and get another 500K for real estate. Depending
on the RE location... now may be a good time to get out (not timing the market).

Or... take the 500K from the business, turn the 500K of real estate into income producing properties. Rentals (residential), or otherwise. Or "adjust" with a 1031 exchange. Assuming un-leveraged 10% CAPR, that's 50K per year with no financial liabilities. Depending on your risk tolerance, you can get 70% LTV second mortgage (refi, or other instruments) at favorable rates and easily push the CAPR to 15-18%.

Buy a boat for $50-100K, have a nice cash cushion. Live on the $50K each year, and when you get tired of cruising, you'll still have 500K (plus appreciation) in real estate.
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Old 04-08-2017, 04:23   #8
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Re: If you had a million dollars.....

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Assuming I'm reading correctly between the lines, you could get out of the self-employed business with 500K and get another 500K for real estate. Depending
on the RE location... now may be a good time to get out (not timing the market).

Or... take the 500K from the business, turn the 500K of real estate into income producing properties. Rentals (residential), or otherwise. Or "adjust" with a 1031 exchange. Assuming un-leveraged 10% CAPR, that's 50K per year with no financial liabilities. Depending on your risk tolerance, you can get 70% LTV second mortgage (refi, or other instruments) at favorable rates and easily push the CAPR to 15-18%.

Buy a boat for $50-100K, have a nice cash cushion. Live on the $50K each year, and when you get tired of cruising, you'll still have 500K (plus appreciation) in real estate.
Thanks for the reply. Adjusting our real estate holdings to residential rental properties has been the idea that comes to the top in every discussion. A bonus point for that plan is that my Dad has been in the rental business for 45 years, and is keen to manage them for us, should we go that route. We would prefer to be debt free, if we make the leap. The pressure of the debt is what has pushed these thoughts to the table. I've had some back troubles (my job is just about a labor intensive as it gets) in the past few years, and it's taking a toll on our bottom line. I've been down a couple months this year, and it seems that it's become a ritual of spring. If I were to really get hurt, we couldn't survive more than a year or two without liquidating. Plenty of life insurance, but there is only one way to cash that check, and I'm not interested in that yet. Reflecting on it this morning, I think this is more about preparing for the future than it is about cruising for a few years.....if that makes any sense?
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Old 04-08-2017, 06:06   #9
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Re: If you had a million dollars.....

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Originally Posted by Fence Man View Post
Reflecting on it this morning, I think this is more about preparing for the future than it is about cruising for a few years.....if that makes any sense?
Just for reference, conventional wisdom in the retirement planning community is that you need to plan on no more than a 4% annual withdrawal from your nest egg. So, for example, if you had $1M invested, you'd be able to safely give yourself a $40K annual salary for the rest of your life.

That's a rule of thumb, and there are many "what ifs" and caveats. But it gives you a data point.

Another reference point is that I've known people who bought a well-found cruising boat, spent a year doing the Great Loop, then sold it for not much less than they paid for it. There's usually some fitting-out costs, and of course fuel and marinas during the trip, but it works for some people.

I don't think you're looking for answers; it sounds more like you're asking for "angles" to approach the problem from. I hope these two helped.
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Old 04-08-2017, 06:27   #10
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Re: If you had a million dollars.....

I'm planning on doing it for less so I'd be gone as soon as the money was transfered.

You mention health issues and my personal belief (after owning 2 businesses and getting sick) is that stress is a large contributor to health issues. A change of lifestyle where you're flowing with life and observing (moving locations and traveling) vs trying to channel life to do what you want (as when you're running a business) might see this stress go away for you.
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Old 04-08-2017, 06:57   #11
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Re: If you had a million dollars.....

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Originally Posted by Fence Man View Post
Thanks for the reply. Adjusting our real estate holdings to residential rental properties has been the idea that comes to the top in every discussion. A bonus point for that plan is that my Dad has been in the rental business for 45 years, and is keen to manage them for us, should we go that route.
Much depends on your geographic location. Your age. Your father's age. If he's got that much experience, you may want to stick around and learn, or hire an apprentice. However, dealing with employees will bring a whole different level of challenges beyond the self-employment experience.

Quote:
Originally Posted by Fence Man View Post
We would prefer to be debt free, if we make the leap. The pressure of the debt is what has pushed these thoughts to the table. I've had some back troubles (my job is just about a labor intensive as it gets) in the past few years, and it's taking a toll on our bottom line. I've been down a couple months this year, and it seems that it's become a ritual of spring. If I were to really get hurt, we couldn't survive more than a year or two without liquidating. Plenty of life insurance, but there is only one way to cash that check, and I'm not interested in that yet. Reflecting on it this morning, I think this is more about preparing for the future than it is about cruising for a few years.....if that makes any sense?
For me it comes down to "When is enough enough?" Enough of work, nest egg, studying and reading up on sailing, etc. That's a personal/comfort choice.

Put differently, if you keep working now and ruin your health, you'll spend the nest egg on medical bills, won't be able to work, and will not get to cruise for a few years.

If you take some downtime now and preserve your health - you can always get back in 3-5 year and work to supplement your income.

I am not a medical doctor, nor a financial advisor. But I've been facing similar decisions lately.
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Old 04-08-2017, 07:14   #12
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Re: If you had a million dollars.....

Did it for far less, but we have several rental properties bringing in income and once I am down to a peg leg, one eye and a drunk parrot, we can return if we like, sell the rental properties and search for that buried Yeti cooler of cheap beer! I say go for it, you won't regret it! As far as she won't go past the Caribbean "Yet"... she does have to sleep at some point, just go hard right rudder... make sure you find the canal though, land hurts!
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Old 04-08-2017, 08:06   #13
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Re: If you had a million dollars.....

if you have $1 million and you can't decide to walk away you probably wouldn't
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Old 04-08-2017, 08:09   #14
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Re: If you had a million dollars.....

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Yeck I walked away with $5k. A million, you could spend $200k on a nice boat and live off the other $800k
5M - you're probably going to get a few proposals now that the cat is out of the bag
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Old 04-08-2017, 08:10   #15
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Re: If you had a million dollars.....

OOOOPS! 5K not 5M - never mind
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