Join Date: Jun 2005
Location: Barnegat Bay, NJ
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Re: Why buy a brand new $150,000 sailboat?
$1000 a month versus $1500, doesn't really matter. The point is from a financial POV it's lost money.
On a recent thread a poster posted that he had purchased a 30 foot sail boat in 1975 for $12500. The new version of that same boat today, accounting for inflation should cost about $50,000, though in actuality it's about 3x that amount. Had that same person instead of buying a sailboat put that money into a run of the mill growth and income mutual fund that account today would be worth over $1,300,000.
Obviously, you can't sail a mutual fund. But there is a real cost to everything we do. The difference between what that 40 year old sailboat is worth today and that 1.3 mill is called lost opportunity cost. it is the end result of the road not taken.
Well, without crunching the numbers I'd say the rate of inflation is way off. Today's 30 footer also has more and more complicated systems.
But to stick with your analogy if the guy who bought that boat in 1975 was 25 he'd be 63 today and would have enjoyed a lifetime on the water. Had he waited he might have a chunk of money - assuming he didn't get screwed in one of the intervening Wall street debacles - but he literally would have missed out on a lifetime's worth of experiences.
What's the dollar value of that?
To me the boat is money well spent.
95 Catalina 30 Island Time
“The sail, the play of its pulse so like our own lives: so thin and yet so full of life, so noiseless when it labors hardest, so noisy and impatient when least effective." - Henry David Thoreau