Which % of saving would you spend for your cat

[a64pilot]

It’s a personal limit in my opinion.
I have a Wife and three kids, so I feel as if I have to a much larger safety net that could catch five people as opposed to just one. Not, it’s very unlikely it would be needed, but it makes me sleep easy at night, and that is they way that I measure risk, if it makes me uncomfortable, it’s too risky, I don’t care what experts tell me.
A lot has to do with your age and employability also, if your young and work in a field that your highly sought, well then you could go back to work tomorrow at a good salary, then you can afford more risk than an old guy that is less in demand.

All we could do is tell you what we would do.
However I think your in a decent place in my opinion, that is buy a boat that has some age to it and has likely depreciated out and pay cash for it, as long as it doesn’t sink and you maintain it, it will still have good value in four or five years.
Usually it’s I want to “buy” meaning finance a new $500,000 Cat and have this miraculous financial plan that will cover it.
That would make me uncomfortable, and I wouldn’t sleep well at night, but that’s also probably why I’m not rich, cause I wouldn’t take the risks needed.

But it’s a personal thing, how much risk can you accept and be comfortable, and if worse comes to worse, can you recover without significant sacrifices? Even those are personal, some just couldn’t bring themselves to give up their personal tennis lessons, while others could eat rice and beans for awhile.

[sguerrero1971]

As new Live Aboards we were in this same situation last year, just before Irma and Harvey hit looking for good used boats. Before these two storms my plan was to spend about 75% of our savings and get as much boat as we could afford with that amount.

After the storms and actively trying to purchase a boat it seemed to make more sense to me to use less than 50% to purchase a boat, do whatever it was I wanted to make it mine and liveable and still have a nice savings in case it was blown off the face of the earth as was the case with some of the boats I was looking at.

There were several boats that I was actively working with a broker on that after the storm not only weren't for sale anymore due to the damage they sustained, one couldn't even be found. This made me consider the "what if" of losing the boat and how I would deal with such an event.

The simple solution was to adjust my purchase price range to allow me to keep more of a cushion just in case.

[riki]

Originally Posted by a64pilot

It’s a personal limit in my opinion.
I have a Wife and three kids, so I feel as if I have to a much larger safety net that could catch five people as opposed to just one. Not, it’s very unlikely it would be needed, but it makes me sleep easy at night, and that is they way that I measure risk, if it makes me uncomfortable, it’s too risky, I don’t care what experts tell me.
A lot has to do with your age and employability also, if your young and work in a field that your highly sought, well then you could go back to work tomorrow at a good salary, then you can afford more risk than an old guy that is less in demand.

All we could do is tell you what we would do.
However I think your in a decent place in my opinion, that is buy a boat that has some age to it and has likely depreciated out and pay cash for it, as long as it doesn’t sink and you maintain it, it will still have good value in four or five years.
Usually it’s I want to “buy” meaning finance a new $500,000 Cat and have this miraculous financial plan that will cover it.
That would make me uncomfortable, and I wouldn’t sleep well at night, but that’s also probably why I’m not rich, cause I wouldn’t take the risks needed.

But it’s a personal thing, how much risk can you accept and be comfortable, and if worse comes to worse, can you recover without significant sacrifices? Even those are personal, some just couldn’t bring themselves to give up their personal tennis lessons, while others could eat rice and beans for awhile.

Thank you.
The "problem" is that when you get into this kind of decisions for the first time you always wonder if you are making the right choices. We are 3, me wife and my 13yo son. As you said tha boat will be something with a certain vintage, that already depreciated and of course, paid cash. I used to run into risks in my business, but that was something done for living, for a boat i can't and won't run any risk or anything that would make me feel unconfortable or feel that if something goes wrong i can lose the boat or the house. For example, there is another thread running and personally i would never ever even think about certain optiosas the op states.
I'll see......but i think that my budget of 70/80k might be a fair equilibrium, now i've only need the patience to find something that really fit my taste and needs.

Note: sailorcherry.....lost the Catana, sold

[rabbi]

Originally Posted by riki

I get your point.
Nope, i am at light-years from 1M
But you nailed it, after some real estate investments my savings are around 100k, maybe something more....120k.....i always had a top limit price for the cat (i like cats, i have also one right now sitting on my feet ) of 70/80k just to have that cushion you mentioned. But i like to hear other's opinions, maybe i could spend somethingmore......maybe i'm wrong...
In my area maintainance is very cheap (and i would perform at least part of it) an mooring almost free thank to some friends.

If you don't want somthing to ruin your plan stay away from a cat (or buy a old cheap one while you save for a better one).

You earn 4000 in net rent. That means all typical cost (taxes on the house, income taxes, management company, tax advisor doing your tax files, minor repairs) are already all covered and 4k is what is really left in your pocket.

Say you buy a 80k cat, plan keep it in the med for a year while you equip her and then take off.
Marina cost: 6k
Insurance: 1k
Some new equipment: 10-15k is easily spent even if you buy bargains (new chain, a new sail, maybe some electronics, lift & bottom paint, maybe a liferaft and you just spent 12k)
So you are already around 100k. Without any big issue like a new engine.


Now you cast off. You have little money left in the kitty, but a steady income stream. You are just a small landlord, and most liklely no bank will lend you any money (at least here they won't, as you don't have significant income, plus you want to leave the country and sail away).


Your engine dies and you need a rebuild. 6k out the window, and your last reserve is gone. But you have good hopes as you can save a bitof the 4k each month.

Now one house has a broken heater, you need 8k for a new one which you don't have. So the tennant stops paying rent and moves out. Your income is cut in half maybe (depending on how much you leveraged bank loans when buying the propertie).

And now you are in deep trouble. What looked like a plan is ruined by a broken heater.

Even more likely scenario: a tennant just stops paying rent, knowing that you are far away and can't do much (no clue how long it can take you to evict them in your area, here it can take years plus 4-5 digit court fees if the tenant is clever).



Doesn't take much for tight plans to become nightmares.

For example when we went on a one year sabatical cruise the city where we have properties in decided to re-model the street in front of the properties.
Shortly before we returned we were given with a 45k Euro bill for a nice new street, payable within 4 weeks. No pay means punish charges, and forclusore a few months later.

[riki]

Originally Posted by sguerrero1971

As new Live Aboards we were in this same situation last year, just before Irma and Harvey hit looking for good used boats. Before these two storms my plan was to spend about 75% of our savings and get as much boat as we could afford with that amount.

After the storms and actively trying to purchase a boat it seemed to make more sense to me to use less than 50% to purchase a boat, do whatever it was I wanted to make it mine and liveable and still have a nice savings in case it was blown off the face of the earth as was the case with some of the boats I was looking at.

There were several boats that I was actively working with a broker on that after the storm not only weren't for sale anymore due to the damage they sustained, one couldn't even be found. This made me consider the "what if" of losing the boat and how I would deal with such an event.

The simple solution was to adjust my purchase price range to allow me to keep more of a cushion just in case.

Good decision then! But i guess this depends very much from the region you live; here in the mediterranean YES, you still can hit rocks, but we have a weather that from this point of view it's not to worry about.
Friendly speaking, my briks and concrete represent a backup that make me feel a bit safer what ever decision i might take.

[rabbi]

Originally Posted by riki

Good decision then! But i guess this depends very much from the region you live; here in the mediterranean YES, you still can hit rocks, but we have a weather that from this point of view it's not to worry about.
Friendly speaking, my briks and concrete represent a backup that make me feel a bit safer what ever decision i might take.

Doesn't take bad weather for this.
Just one idiot dragging anchor because 12m scope just isn't enough in 10m is enough. Even if he is insured, you will have to bear the cost of licing on land for a few months while this claim is settled.
If he is not insured, hopefully you have insurance against uninsured.

Or a bad old thoughull sinks your boat and you learn only then about the nasty insurance fineprint excluding damages caused by neclect.

Plenty of things can go wrong. Keep enough money in the bank so you can write off the boat and return to land based life if you have to.

[HBrew]

Based on the income and savings numbers you give, you are dealing with a very tight budget, maybe infeasible.I know you don’t want to hear this but I presume the reason you’re asking is because you want advice.

What you should do is to buy some books about cruising that have lists of maintenance schedules and read volvo/yanmar maintenance schedules and find out the price of replacing standing rigging, running rigging, sails, watermaker filters, electronics, solar panels, batteries (learn a lot about batteries), autopilot etc etc. work out how many miles/days a year you plan to travel. Work out marina rates, diesel costs, insurance costs.

Work out a detailed budget for simply running your cat, then add your acceptable cost of living for you and your family, plan out 10 years and see is you have enough money just to run a cat, let alone buy one. If there is any money left then you can spend it buying a cat.

[riki]

Originally Posted by rabbi

If you don't want somthing to ruin your plan stay away from a cat (or buy a old cheap one while you save for a better one).

You earn 4000 in net rent. That means all typical cost (taxes on the house, income taxes, management company, tax advisor doing your tax files, minor repairs) are already all covered and 4k is what is really left in your pocket.

Say you buy a 80k cat, plan keep it in the med for a year while you equip her and then take off.
Marina cost: 6k
Insurance: 1k
Some new equipment: 10-15k is easily spent even if you buy bargains (new chain, a new sail, maybe some electronics, lift & bottom paint, maybe a liferaft and you just spent 12k)
So you are already around 100k. Without any big issue like a new engine.


Now you cast off. You have little money left in the kitty, but a steady income stream. You are just a small landlord, and most liklely no bank will lend you any money (at least here they won't, as you don't have significant income, plus you want to leave the country and sail away).


Your engine dies and you need a rebuild. 6k out the window, and your last reserve is gone. But you have good hopes as you can save a bitof the 4k each month.

Now one house has a broken heater, you need 8k for a new one which you don't have. So the tennant stops paying rent and moves out. Your income is cut in half maybe (depending on how much you leveraged bank loans when buying the propertie).

And now you are in deep trouble. What looked like a plan is ruined by a broken heater.

Even more likely scenario: a tennant just stops paying rent, knowing that you are far away and can't do much (no clue how long it can take you to evict them in your area, here it can take years plus 4-5 digit court fees if the tenant is clever).



Doesn't take much for tight plans to become nightmares.

For example when we went on a one year sabatical cruise the city where we have properties in decided to re-model the street in front of the properties.
Shortly before we returned we were given with a 45k Euro bill for a nice new street, payable within 4 weeks. No pay means punish charges, and forclusore a few months later.

I agree with everything but not that much with the numbers.
First of all don't have any loans, so i am ok banks wise.
Marina fees: free or just a small contribution thank to some friends.
Repairs: i am planning to do most of it by my own. The nice side of living from rentals is that they give you plenty of time, so why not? Not talking about putting my hands on an engine, but all the rest it's possible, and also if i need help i got many connections in my area so it should be not that big issue (i live in Greece).
Finally, all my properties are independent and it's unlikely to pay for situations as the one happened to you: ok a heater can brake, or a window or a fridge, but nothing that can brake the bank, also because just now i am into full renovation of the properties so all will be brand new in a few months.......
I like to analize all the sides, i appreciate your comment but now i live in a side of the world where prices are human and people very nice and helpful with residents.

[deminimis]

For what it's worth, there is a youtube family (6) cruising (I'm sure many of you have seen them). It seems they spend around $4k/mo +/- cruising (large family). Unfortunately, no personal experience as of yet.

[riki]

Originally Posted by deminimis

For what it's worth, there is a youtube family (6) cruising (I'm sure many of you have seen them). It seems they spend around $4k/mo +/- cruising (large family). Unfortunately, no personal experience as of yet.

Beside being double (we are 3) i imagine the've also got a much bigger boat that what i am thinking, ideally a 38/40fter. Beside, i am planning liveaboard during winter but only cruising in summer, so just 2/3 months.

[rabbi]

Originally Posted by riki

I agree with everything but not that much with the numbers.
First of all don't have any loans, so i am ok banks wise.
Marina fees: free or just a small contribution thank to some friends.
Repairs: i am planning to do most of it by my own. The nice side of living from rentals is that they give you plenty of time, so why not? Not talking about putting my hands on an engine, but all the rest it's possible, and also if i need help i got many connections in my area so it should be not that big issue (i live in Greece).
Finally, all my properties are independent and it's unlikely to pay for situations as the one happened to you: ok a heater can brake, or a window or a fridge, but nothing that can brake the bank, also because just now i am into full renovation of the properties so all will be brand new in a few months.......
I like to analize all the sides, i appreciate your comment but now i live in a side of the world where prices are human and people very nice and helpful with residents.

The cost given for upgrades are DIY with good quality items from cheapest online suppliers. It gets cheaper only if you go cheapo chinese or second hand.
If you want to have these things done professionally it gets way more expensive.

As long as you always keep enough in the bank to write off the boat and move back to land everything is fine. As soon as you have too little for that, you may be in trouble.

Good luck

[longjonsilver]

On a depreciating and maintenance intensive item like a boat, anyone who spends more than 10% of net worth on a boat, unless its is a full time liveaboard, is making foolish decisions.
imo
jon

[Suijin]

I don’t see how anyone can give you advice, there are too many unknowns. If you’re 25 and have 100k saved that’s very different than if you are 60. Pension? Are you going back to work later?

Being conservative I would say buy the least expensive boat you can find and try and save 50% of your monthly income or as close to it as possible.

You should not be asking boat owners this question. You should be talking to a financial planner.

[Cadence]

Originally Posted by riki

Giving the fact of around 4000$ net income from different rentals, which percentage of all savings you would invest, as maximum, for boat purchase?
To keep it simple let's say that the used boat would be in good conditions and no major works to be done on it. Or nothing that can't be done personally.
Please explain your choice.
Thanx

Kind or sketchy facts.
What's in the bank? What other income do you have?

[captlloyd]

You mean you don’t have to spend it all ! It’s a multi- hull after all.