Prospective purchasers lament

[Greg B]

WHOA NOW!! Hold on a minute there fellas. Especially you Sean. My mom and dad were both born and raised in cornfield county midwest. They had no money and no class either. But they did teach me values and integrity. I borrowed $1500.00 from him 20 years ago and worked by butt of at least 60 hrs a week to make my way. I paid him back in spades too!

I have no idea where you're coming from Sean. Sounds like sour grapes to me. It's not who my parents were or who I knew. It's the free enterprise system and how hard and smart you are willing to work. I got what I got cause I was willing to work my butt off to get it and am thankful that I live in a country where you are allowed and encouraged to do just that.

I hate that comment that you sometimes get from the complaining types. "Gee, it must be nice." My response: "You bet it is. I worked my ass off for it." So quit whining and work harder!

But this is still my favorite forum

And you knuckleheads are fun to talk to too.

I got a great idea. Let's change the subject before Gord cuts us all off.


Greg

[ssullivan]

I sure would love to continue this discussion. Greg, that's amazing that you took $1500 and were able to parlay it into whatever state you are in now. I had done something similar, but was stopped dead in my tracks in 2001. I had a small software/business process consulting business in NYC that was put under by 9/11 and the general economic downturn. (60% of my clients went out of business or cancelled projects in a ripple effect from the WTC)

This is a very interesting thread, but alas... I think Greg is right. We can't continue it since it is so far off of the topic of this board. Maybe we'll all have to meet up for a little discussion in a harbor somewhere. Well.... once I get another boat.. ha ha

I will shut up now, in the interest of keeping valuable crusing information on this site.

[GordMay]

So ~ is there any way to tie this divergent conversation back towards cruising - perhaps some relevance to “Making a living while cruising”?
I don’t think a general (and I must say rather prosaic) discussion of capitalism,on it’s own, nor it’s inherent limitations and/or opportunities has much pertinence to our cruising mission statement.

Come the revolution ...

Gord

[Greg B]

Three cheers for Gord. You're quite the wordsmith and a wealth of knowledge and I thank you for all of it. We do all have a common interest and I love talking about cruising in my big 'ol stinkpot and learning the many things I don't yet know.

This weekend Jane and I are headed back to Alabama to board 'Heart of Gold' and begin the trek back to lake Michigan for the summer. Unfortunately, due to my being tied down to the "free enterprise system" we will not be able to make the entire trip back. We have about 10 days then we'll have to leave the boat where ever we are and rent a car to come back home for a couple of weeks.

Well anyway after that we can go back and finish the trip and have a good summer. We hope to get up to Holland and meet up with Irwinsailor before he leaves for his trip south the 'outside' way.

Anyway, when we get started back, we'll update [url]www.seaplanetearth.com so you can all see what this 'free enterpriser' is up to.


Love you all
Greg

[Boracay]

Maybe if I can nudge discussion back to my gripe, and take up the point about sailboat depreciation.
I won't argue too much about the lack of deprciation of a well maintained sailboat.
It does seem to be true that boats depreciate rapidly during their first seven years or so, but then the depreciation slows considerably.
My argument is that the current view on boat depreciation is that it is lower than a house(arround3%) and that I just cannot wear.
At arround 20 years most boats need some kind of major overhaul where they are hauled from the water, stripped out, dried out and rebuilt.
This is expensive. As a generalisation one could expect to pay over 30% of the new boat price!
All boatbuilding materials deteriorate, with the possible exception of ferro cement, so that at some stage the boat is just going to have to be written off.
A very well built boat is going to last longer than a jerry built one, but sooner or later it is either going to be scrapped or in a museum.
So, what is the sense in paying big bucks for a 40 year old boat, even a well maintained one?

[BC Mike]

These are all good points.

I paid $28000- for my boat new in 1979, today it would sell for about $25000- with a lot of gear and sails on board. Why would a person buy this boat instead of a new one? Because a new one is $80 to $100,000.

In 1983 in would cost about $70,000- to have a new 36 foot boat built in NZ from wood covered with fiberglass. Today the same boat sells for about $70,000- and a new 36 foot boat is too much for me to consider.

A good 36 foot boat ready to go offshore is available in the US for $43,000.

Some boats will last 100 years as long as they are maintained. New the fancy units may be more money, used the well built hulls are worth more money. That is the case with my boat.

I am selling my 1941 Ford tractor for about three times what it cost new. Some things hold there value, some do not. I would always try and only buy stuff that holds its value, or goes up like real estate and or quality investments.

Michael

[Alan Wheeler]

Well said-err-written Mike. That was what I was also infering in my earlier post, that a vessel should maintain it's value, based on inflation. A new one is always going to become more and more expensive as time marches on. The only way costs can be cut is to create the "little boxes all made out of ticky tacky" type products.

[GordMay]

I had a customer who drove a Rolles-Royce convertible. When I gave the obligatory “golly - wow !”, he claimed that he couldn’t afford to drive anything less, commenting:
“A $50,000 Cadillac would be worth less than $25K after a few years, whereas the $100,000 Rolls will be worth $125K.”
I suppose that the analogy might be that an exceptional boat, well maintained and improved, might tend to hold it’s value over time. Unfortunately, I cannot think of a practical example (that one would actually ‘use’).
Someone mentioned that new supply was exceeding demand. If true, this should have a depressing effect on all boat prices.

[BC Mike]

Rolls being the salesman, Royce being the mechanic. Only downside to the logic is the cost to own and maintain, plus market timing. I used to own a Bentley which ties in with the boat name Gently. We now have a horse called Bentley having sold the car. They are both two tone grey. I sold the Bentley for much more than I paid for it, but if I deducted the repairs and maintenance costs I would have been better off with a quality dividend fund, but then I would not be able to tell this story.
If you think boats are expensive buy one horse for $1000- . The associated costs might surprise you.
Michael

[delmarrey]

Mike,

That's funny. I was raised on a horse ranch. And horses were our source of income. Of course, you would have probably been one of our customers.

Anyway, it's all relative!

You can make or loose money on anything. It all depends on which side of the fence you are standing.
What you produce has to be more than what you consume. And depreciation falls heavily on lack of maintenance. And what is not maintained, the earth will claim back as it's own. If you want to keep sailing, you have to work on the boat.
Biological objects are to be born/germinated, raised and sold. Non-biological objects can be preserved to an extent depending on its original value (quality) as in boats, cars and planes. Higher value yields higher returns.

Stewardship pays (Bentley-auto)............................_/)

[Alan Wheeler]

I know of two good Rolls stories.
"The only thing you can hear in a Rolls at 100KPH, is the sound of the ticking clock". Well the new CEO of Rolls decided they just had to upgrade that damn clock. So they fitted a new Electronic one. The Sales of Rolls Royce vehicles plummeted. The Ticking Clock was once again fitted to the dash.
and,
A gentleman was travelling through Europe in his Rolls. It broke down and so he called Rolls in Britan. A mechanic was instantly dispatched and flown to the location and the vehicle was repaired. Several months later, the gentleman had not recieved an account from Rolls, and so phoned them. The reply on the phone was polite but ubrupt. "I am sorry sir, but you must be mistaken. A Rolls Royce never breaks down. Good day" and hung up.

[Boracay]

If I can nudge this discussion back to the cost of cruising boats.
I can well understand that a boat that cost $25,000 25 years ago might cost $28,000 now, provided it was in very good condition with a similar new boat costing from $80,000 to $100,000.
My problem is that in the size range that I am looking at there are very few new boats, and the few there are are priced in the $400,000 to $500,000 range.
If the same relativities applied I would expect to pay around $130,000 for a 25 year old boat in good condition.
In fact most boats of this size and condition the owners are asking around $260,000, or about double what I would expect.
They are all going on this assumption that a well maintained boat does not depreciate.
We do have a situation where there are a lot of boats on the market and we have had a very strong economy(this may not last).
And last time I checked old Rolls Royces were selling way under their new price!
So- Are the owners asking too much?

[delmarrey]

I look at it this way!

What would it cost to build one yourself, which includes materials, parts, tools and your time?

Or, what would it cost to use and old quality hull that's seaworthy and rebuild that.

That's what determines the value of a vessel in my opinion. If you can do better then that, Los Vegas would be a good place to hang out.

[Alan Wheeler]

The thing is Chris, if you were selling a boat, what would you want and expect to sell her for. At the end of the day, it is all about supply and demand. Prices are kinda self regulatory. If no one buy's second hand because it is just as cheap to buy new, prices drop to a level where it IS realistic to buy second hand. If there are few buyers in the market, eventually prices drop till the boat sells. If there are a lot of buyers, then the market remains high. Thus the market settles to a medium based on that supply, the urgency of sale, and the demand for it. Keep looking. There will alway's be over the top prices for some boats, but every now and then a real bargain can be had.

[BC Mike]

I probably would not have been a client Del as I rode with an English saddle, but about my comment which was more related to the items holding value. I agree a good product will hold its value if well maintained ( I think I said that ) my point being though that we need to factor in the yearly cost of owning the item. If we get somewhere near our money back and derived enjoyment ( sailing ) during our ownership then that is about as good as it gets. We need to consider the costs and eventual value of all the financial transactions we make. In that regard real estate and quality investments have proven the most reliable for the average person. My point about the $1000- horse was that a good saddle is more than the horse and one years board is double, a trailer to haul it around is even more $$ and so is the truck to pull the trailer, and that does not count the acreage you eventually need to purchase to keep the horse. So a $1000- horse could end up costing more than $100,000-. The good news is you can sell the property later at a modest gain. My old horse is at the RCMP stables in Ottawa standing on guard for thee. We donated her. I am quite happy about how my boat has retained its value. As you suggest I can also find a larger boat more a reasonable price.
Michael