What percentage of nest egg should be used on boat?

[Na Mara]

I am in the process of doing this right now with my boat.

I find this easiest to think of in terms of the percentage of the initial purchase price that you will need to spend to bring a yacht up to the level of specification needed for serious live aboard cruising?

A good rough figure is about 20% but there is so much variation here that it really is just an average.

Even if you buy a new boat you will find that there will be flaws from the factory, or things that were missed from the original specification.

If the boat is brand new and you spec'd her well from the manufacturer then count on about 10% of the purchase value to fully commission and get her ready for the off.

If the boat is less than 10 years old and was well kitted to start, then 10% is also a good rough figure.

If the boat is around 20 years old or older but generally sound then count on about 20%. If she's that age and a fixer upper count on 30+%

Then you need to make allowances for how demanding you as the skipper are with respect to comfort and safety onboard. If you are happy to go to sea in any well found boat then you don't need to make any allowance here. If you are a really picky bugger like me you should allow an extra 15%.

So the best case of a relaxed owner with a new or nearly new well found boat can get away with allowing just 10% of the purchase price to bring it up to code.

In the worst case of a older fixer upper with a demanding owner you can count on as much as 45-50% of the purchase price.

I'm a picky owner with a well found boat in her mid twenties and I am probably going to spend about 35% of the initial purchase price getting her ready for a North Atlantic circuit. In that is replacing all the standing rigging, all the navigation gear, the batteries, putting on new reefing systems, adding generating capacity, reupholstering, etc, etc. An owner who could put up with 25 year old electronics etc, could have maybe gotten her to fighting fit with just 15-20% of the initial purchase price.

Also bare in mind that I am commissioning in Sweden which is expensive. You could certainly do it for less if you do it in lower labour cost market (however the material costs will be the same so there is a limit to the savings that are available like this)

hope that helps.

Best from Na Mara

[BlackHeron]

10% of nestegg for boat, the rest is used as principal for your operating income, unless you have another source of reliable income such as a pension, retirement, trust fund that will completely cover all your expenses. It will cost a LOT more than you think. Very few bloggers will give out true accurate numbers.

That is unless you want to just spend down all your assets until you are dead broke and then sell the boat and go back to work to start over.

Gods, that plan sounds depressing as hell. Might as well just start smoking crack or shooting heroin, as those seem better options than that.

[Hesti]

Our current boat, about 25 years old with some maintenance backlog when we bought, has already consumed more than 200 % on top of purchasing price for overdue maintenance, repairs and upgrades. Plus an xxx number of owner hours invested. With that, it was ready for a long summer sailing trip. We are not through yet with everything but slowly getting there, some things already better than new, others in a condition where they will not give any trouble for years. Due to whatever, a lot of the work was carried out by a boatyard - which adds a lot of $$$ to maintenance and repair costs.

So - % on boat purchasing price is not a reliable figure.

Looking from the cost of a comparable boat today, we are now somewhere around 30 % of the cost of a similar sized new boat today. Which for a long time was a more or less stable figure for the value of well maintained slightly older boats. The market value today might be a bit below.

To budget for a used boat
-look at your savings
-decide how much you want to keep as safety net. It might make sense to keep 2/3 and only commit 1/3. But that is up to you.
-1/3 would be around 67 k$. That should buy you a boat in really good condition and well fitted out in a size that would today cost around 200 k$ new.
-Boat size for that budget seems to be around 40 feet or a bit below.
-Find a good surveyer to look over boats that are of interest to you.

On the running costs - a lot depends if you can do things yourself or if you need boatyard work. An old and often misleading figure is, that material is only 1/3 if you have work done. But it helps to budget.