Which % of saving would you spend for your cat

[rabbi]

Originally Posted by riki

you gave some interesting and sharable opinions but this answer... i'm not a teenager (sadly).

I'm not saying you are a teenager asking for permission.
But obviously you have already decided for yourself to spend 80% on a boat but feel its maybe not the best idea.
So you want others to support your position - not to challenge it.





I have plenty of scenarios, all of which lead to he same result:
Your idea of doing a complete lifestyle change without significant cash in the pocket for emergencies is IMO "bad seamanship". It might work out OK, but its stupid to ignore the risks.


We had not only about 10k in repairs, maintenance, etc for our Lagoon 410 back then, but also had to rebuild one engine about 2 month into our trip. About 4500 euro plus 3 weeks marina costs.

And this street remodelling bill: Rest assured that I never ever remotely thought about this. I caught me completely offguard - and there will be things that just lurk around the corner to get you.


Look at my favourite scenario, matching closely what happened to some friends.
You managed to stay within 80% of your budget. You have 20k left when you cast off towards the west. Your wife is happy in the med, she loves the cruising lifestyle - hopping from island to island. All is well.

You arrive at the Cannary islands and she is not that happy anymore. There is plenty of reasons what can change the mood on a 6-8 day passage: calms with old swell causing seasickness, bad weather with too much wind and rain for days, maybe she can't cope with the lack of sleep, maybe you run into fishing nets even 50miles offshore). After two weeks rest both of you decide that its OK to continue, but on the next stop (Cap Verde) she has had too much and just wants to get off.

Cap Verde is not that nice for living with a kid so she decides to fly home.

Now you have a boat in a remote island where you can sell it and just minimal reserves in the bank. Your wife wants to live in greece.

How do you finance this?


Doesn't happen? This is what happens to more people than you may want to accept. Living on a boat is special, and not always easy. Long passages are very special situations.


My advice: You can't afford decent cat. Get a small and cheap boat (mono?) and keep at least 50k in the bank.

[riki]

Originally Posted by rabbi

I'm not saying you are a teenager asking for permission.
But obviously you have already decided for yourself to spend 80% on a boat but feel its maybe not the best idea.
So you want others to support your position - not to challenge it.





I have plenty of scenarios, all of which lead to he same result:
Your idea of doing a complete lifestyle change without significant cash in the pocket for emergencies is IMO "bad seamanship". It might work out OK, but its stupid to ignore the risks.


We had not only about 10k in repairs, maintenance, etc for our Lagoon 410 back then, but also had to rebuild one engine about 2 month into our trip. About 4500 euro plus 3 weeks marina costs.

And this street remodelling bill: Rest assured that I never ever remotely thought about this. I caught me completely offguard - and there will be things that just lurk around the corner to get you.


Look at my favourite scenario, matching closely what happened to some friends.
You managed to stay within 80% of your budget. You have 20k left when you cast off towards the west. Your wife is happy in the med, she loves the cruising lifestyle - hopping from island to island. All is well.

You arrive at the Cannary islands and she is not that happy anymore. There is plenty of reasons what can change the mood on a 6-8 day passage: calms with old swell causing seasickness, bad weather with too much wind and rain for days, maybe she can't cope with the lack of sleep, maybe you run into fishing nets even 50miles offshore). After two weeks rest both of you decide that its OK to continue, but on the next stop (Cap Verde) she has had too much and just wants to get off.

Cap Verde is not that nice for living with a kid so she decides to fly home.

Now you have a boat in a remote island where you can sell it and just minimal reserves in the bank. Your wife wants to live in greece.

How do you finance this?


Doesn't happen? This is what happens to more people than you may want to accept. Living on a boat is special, and not always easy. Long passages are very special situations.


My advice: You can't afford decent cat. Get a small and cheap boat (mono?) and keep at least 50k in the bank.

Thanx rabbi, honestly appreciate your help.
I made a decision? Yes and no: from one side i feel it's possible, from the other, as you said, it's a big expense and what better than hear the opinion of more experienced persons?
But my intention is not to argue trying to convince you that i am taking a good decision (sound stupid even saying it) but just to add more info about what my plans are. For example you are talking about some serious cruising....ok, will happen one day, but as i said in another post it's not in my plans. Actually my cat will be my house moored in the marina and will sail around in the med only during summer. Maybe you agree that this might be a different scenario? Not saying cheaper, but maybe easier.....
My worse case scenario is that we discover that liveaboard is not our style: in that case i would move back to my house and decide to keep the cat only for summer or just sell it.

[valhalla360]

4 renters can very easily drop to 1 or 2 renters while monthly expenses on the rentals keep chugging along resulting in well more than a 50% reduction in monthly net. At the same time, you may need to pay a lawyer to go thru the months long eviction process at the same time major rental and boat failure pop up that could easily eat up $20k.

I also see no indication of long term retirement planning.

People do it with less resources but seems crazy to me to have spent the time and effort getting into a good financial position only to build the next phase on a very shaky foundation.

PS: It would have been better to lay out the full financial picture up front, technically we don't know if you own the rentals outright or if there are also mortgages involved. If you have separate retirement accounts not mentioned, if you have a skill set that could quickly get you a job if needed, etc...

[rabbi]

Originally Posted by riki

Actually my cat will be my house moored in the marina and will sail around in the med only during summer. Maybe you agree that this might be a different scenario? Not saying cheaper, but maybe easier.....

Better. Still not "smart" in my books but what do I know.
Maybe we just don't share the same risk tolerance.

[Tornadosailing]

As others have said, it all depends. I can tell you what I'm doing.

I'm still working, and bought the boat on a loan. Purchase price was roughly one year's income, loan was 75% of the purchase price. Business will sell (fingers crossed) in about 18 months, and I will pay off the loan. The payoff will represent roughly 15% of savings (including biz sale proceeds), and I'll have rental income of approximately $6000 net for at least 10 years. After 10 years either the income continues, or I'll roughly double my savings account and start drawing from there.

My plan is not without any risk, but it seems solid to me, and more importantly my girlfriend. Risk is my middle name. GF, not so much. She wants a rock solid plan.

[Cadence]

Financing something, a boat, that is almost sure to depreciate seems like taking a hit on both ends? It does not sound like a sound business decision. If you want to finance a toy fine. Chalk that off to recreation and know it is not recoupable.

[Tornadosailing]

Originally Posted by Cadence

Financing something, a boat, that is almost sure to depreciate seems like taking a hit on both ends? It does not sound like a sound business decision. If you want to finance a toy fine. Chalk that off to recreation and know it is not recoupable.

Like everything, it depends. For me it was a better move to finance. I make more money by keeping the cash working than the interest costs me. The dockage and maintenance costs make it a money pit like any other boat, but that would be true if I paid cash.

[KingGuppy]

Originally Posted by Tornadosailing

Like everything, it depends. For me it was a better move to finance. I make more money by keeping the cash working than the interest costs me. The dockage and maintenance costs make it a money pit like any other boat, but that would be true if I paid cash.

Agree'd. Some people terrified of risking that cash though.

Found it funny that some world traveled salty dog ocean sailors, go out into the open ocean but like "Stock market?! Nah, thats too risky!".

[Cadence]

Originally Posted by Tornadosailing

Like everything, it depends. For me it was a better move to finance. I make more money by keeping the cash working than the interest costs me. The dockage and maintenance costs make it a money pit like any other boat, but that would be true if I paid cash.

Good for you. If you can outpace the interest with investments, however I doubt most look at it that way. I doubt the investments are stock market. Probably local investments.

[Tornadosailing]

Originally Posted by Cadence

Good for you. If you can outpace the interest with investments, however I doubt most look at it that way. I doubt the investments are stock market. Probably local investments.

Have you not looked at the stock market lately? If you can't beat loan interest rates by at least 2:1 over the last two years, you need a new advisor. The Dow is up 18.7% in the last 12 months. Loan interest on a boat is under 6%.

[Tornadosailing]

Originally Posted by KingGuppy

Had same argument on my post a few days ago. A lot of folks are nervous about the markets and told me I didn't know what I was talking about even after posting a screenshot of my account from 2008-2018.

What are you running with on your portfolio? I stay heavy in VTI so I don't have to think about it too much, and bounce other funds to hot markets. The past year gene editing with CRSP, NTLA and EDIT. I got lucky on MU in 2016 and got over 500% in 2 years (still holding until JEDI contract concludes).

You're way more involved in it than I am, and probably a lot more savvy. I send cash to my guy who puts it mostly in mutual funds, and the occasional stock. I look at it from time to time, and if I need to I call him and tell him to find a better place for it. You don't have to be very smart to make a little money in stocks the last couple years.

[Cadence]

Originally Posted by Tornadosailing

Have you not looked at the stock market lately? If you can't beat loan interest rates by at least 2:1 over the last two years, you need a new advisor. The Dow is up 18.7% in the last 12 months. Loan interest on a boat is under 6%.

The only stock market investing I have ever done was buying stocks of the co. I was employed by before it when down the tubes. Buying highway or waterfront property worked well for me. The market seems like a risk. Property doesn't go tits up.

[KingGuppy]

Originally Posted by Cadence

The only stock market investing I have ever done was buying stocks of the co. I was employed by before it when down the tubes. Buying highway or waterfront property worked well for me. The market seems like a risk. Property doesn't go tits up.

Easiest way to get into the market is any of the total market ETF's. I use VTI since its the largest in the world. Its basically just an average of the total market.

In the history of the stock market, no ones ever lost that held for 10 years. Sometimes people don't have 10 years or if the market tanks they dont have enough liquid to pay bills so sell for a loss.

You can also buy Real Estate ETF's which is based on the housing market, maybe more your thing.

[KingGuppy]

Originally Posted by Tornadosailing

You're way more involved in it than I am, and probably a lot more savvy. I send cash to my guy who puts it mostly in mutual funds, and the occasional stock. I look at it from time to time, and if I need to I call him and tell him to find a better place for it. You don't have to be very smart to make a little money in stocks the last couple years.

I encourage people to get in it, but that 2008 has them shook.

[smj]

Originally Posted by KingGuppy

Easiest way to get into the market is any of the total market ETF's. I use VTI since its the largest in the world. Its basically just an average of the total market.



In the history of the stock market, no ones ever lost that held for 10 years. Sometimes people don't have 10 years or if the market tanks they dont have enough liquid to pay bills so sell for a loss.



You can also buy Real Estate ETF's which is based on the housing market, maybe more your thing.

My advice would be to post in a financial forum rather than a cruisers forum.