Finances and Budget - Circumnavigation

[john manning]

Originally Posted by sailorboy1

really, in 2021 dollars?

I have never met an active cruiser doing it on $1000/mo. Maybe they "cruised" to that spot they are anchored at 3 years ago. But they aren't moving that boat now.

I think forums do a great disservice to wannabes with these low budget "tales"

Your right about the year. It was 2015 when I last went offshore cruising. However my point was more about the lifestyle you choose when cruising. After meeting a young Australian couple who were living on less than $1000 per month, my wife and I tried a budget of $1500 per month. It lasted two months before we went back to motoring into the wind instead of waiting for the wind change, using moorings off resorts instead of anchoring, eating ashore instead of using local markets and cooking. And we started drinking gin and wine again.

In our two months of being frugal we easily kept within the $1500 budget. At the time we were in the South West Pacific but not NZ or Aus.

[timb7734]

IMHO your financial reserve to support 4 people and operate/maintain such a vessel are inadequate. Also, generally a cheaper boat is not cheaper, only as a matter of cash flow timing. People buy cheaper because it is what they can afford to get them on the water now, and hopefully they have the requisite skill set to do most of the inevitable upgrades; but, overall the costs will be the same as the less expensive vessel needs more expensive upgrades. Doing the work necessary will save some money but delay long term departure. Ain’t no free lunch.

[sailorboy1]

Originally Posted by john manning

In our two months of being frugal we easily kept within the $1500 budget. At the time we were in the South West Pacific but not NZ or Aus.

Well that's the thing, it was only 2 months! It is an example of the "not counting" cost reporting.

[Alan Brookes]

Circumnavigated for 6yrs 1990-1996 from Western Australia in a Westsail 32. Stopped to work in Gibraltar and marry my girlfriend & have our first son. Worked again in Caribbean, through Panama, across the Pacific. Worked again on East Coast of Australia for cyclone season then back over the top to Perth. Aged 50 then, we sold the Westsail for what we paid + money earned we bought a house and settled. Now aged 73yrs those priceless memories warm and thrill me to this day.

[tecmo]

cAmstar - you have received a lot of feedback - some of it helpful.

As a general statement - it is good to have goals! Don't let all the feedback here deter from setting a dream and then working towards it. The first step is to have a plan - which is what you have asked for some guidance on - so here it is.

Boat (advice you didn't ask for)
- before making a huge commitment that is hard to undo (ie: selling your house, quitting your job) it makes a lot of sense to at least make sure your family is going to enjoy sailing. It is not clear if you are near the water, but buying a smaller 30ft boat and getting use to it could be a way to get introduced to sailing without a large financial outlay. You could probably buy the boat for $30K, and it would cost around $10K per year to maintain. Your total cost for 3 years of ownership would be around $40K.

Boat (advice you did ask for)
- I would personally get the nicest boat you could afford (more on that later), with your family on board you want to maximize your time not stuck fixing things or worrying.

- $300K will get you a very nice boat, and one that could take you around the world with your family in comfort. I would expect that it would depreciate at about 50% after 5 years of sailing - so the 'cost' of capital would be around $150K.

- $100K boat would probably require another $75K in upgrades to get it ready, and depreciate to probably $75K when you are done - so the 'cost of capital" would be around $100K

Finances
- Remember , you won't have a mortgage payment or property taxes, or car expenses, etc... so I would start by eliminating those from your current budget and calculate what your true living expenses are. My guess is that a family of 4 could live off $2K per month.

- You will also want to enjoy yourself, so I would probably budget another $10K per year for excursions and other fun stuff.

- The $300K boat will require some maintenance; I would probably budget $15K per year for that.


So all in the total cost for the 5 years of sailing might look like this.

- Depreciation : $150K (or $100K)
- Living Expenses : $140K (for 5 years)
- Maintenance : $75K (for 5 years)

Total : $365K or roughly $75K per year (for 5 years).


How to pay for it.
- Use your RRSP; maximize it as much as possible over the next 3 years and then pull out say $35K each (use a spousal as well) tax free per year. Keep some (most) of the money invested while you are out so it is generating income for you.

- Use a line of credit to pull out the initial $300K (or $175K) to finance the boat; and keep the condo (rent it out to cover the LOC charges).

Other considerations
- you should look into residency requirements for keeping your health insurance.

- how confident are you that you could return to the workforce after 5 years of absence at age > 50? I would want to know that to factor in the 'life after' scenario. You will likely need to get into maximum savings time when you return to replenish your savings.

- do a quick calculation to see what the impact on CPP and OAS might be with 5 years out of the workforce.

Bottom Line - definitely doable.

[SV Spectra]

Originally Posted by sjrider

Not every decision in life should be made just based on financials. Is your plan financially irresponsible? Probably.

I took two years off work when my kids were about that age, and would happily do it again. We did not go cruising, we traveled the USA and made some wonderful memories.

I would go. You can always go back to work, buy another condo, help your kids with college, etc. You will never get back your time. Those kids grow up, and move on with their lives.

Be as financially responsible as you can be, maybe spend less on the boat, maybe sacrifice something now to save more money. If your wife and kids our on board, why not?

Plan for the future but live for today. Good luck with your decision.

Dear Sjrider:

You probably don’t have any idea how much impact your words punched me right in my soul.
Me and wife are just about to begin the same dream, cherished for long 40 years. We both are medical doctors - you can imagine how stressful Is our job during this pandemics - and we’ve decided it’s time to go, just because it’s not to late. Time and strength it won’t be back later.
We live in Brazil, and our cruise kit it’s much smaller then those 50K. We don’t care. If You ask me what to do about money I would say: no idea, but if You ask me about tongo or don’t them I’ll definitely say: GO !
Good luck !

[WacoLen]

Contact the Foster's. They are just a year or two ahead of you and very similar situations. They will be eager to share. They have a Youtube channel.



https://thefosterjourney.blog/

[ATHughes]

So, we've circumnavigated - 2017-19, and we 'tuned up' by 1st sailing USA to the Eastern Med. We were well prepared & financed, and fortunate with weather & perils. We sold our cars, rented our townhouse, and it was the experience of a lifetime!! It would be especially so w/kids.

Any budget can be set, but there is a 'cost' to maintain that budget, sometimes brutal. Most people that I know spent 2x what they generously provisioned - including us! Nonetheless, we know individuals who sailed Transpacific in a tiny 28' boat. When things broke, he did without them, but unfortunately he didn't get to circumnavigate...

My wife & I could never do it on your budget, but that is not to say that it is impossible. Think of your worst case situation - could you provide for your family (possibly with parental support)? Only you can answer that question. What would happen if you delayed 5-years and did some longer coastal sailing to gain expertise & resources? Could you create and maintain a subscription blog underway to obtain funding?

I wish you the very best,
Tom