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Escaping the Paradigm with $300,000...

12K views 66 replies 24 participants last post by  bb74 
#1 ·
I know there is lots of other posts that state if you had $1 Mil what would you do... Here is a new twist with a number that may be more realistic for some - $300,000 cash. This needs to include the purchase of the boat, outfitting, how many years you think you could make it last and any other budgeting you would do. To each there own on how they would spend it...

My thoughts...
Boat - First Tayana 42 CC then Cabo Rico 38 - $110,000
Outfit - $30,000
Yearly Budget - $35,000 (2 Adults, 2 Kids on the hook mostly)
Years on the Water - 4 (If I spend less yearly I would go longer)
Emergency Fund - $20,000
Location - Start in the Caribbean and make my way over to the South Pacific but depends on boat location...
 
#3 · (Edited)
My thoughts are that the budget should include all expenses for the year (food, dock fees, fuel, maintenance/repairs, clothing, etc and for me- 4 people).

Right now I am just scheming and dreaming.. Unless I have a life changing event (i.e. get laid off) I will continue my current path forward and plan for the day I don't have to work anymore and can choose to cruise until I don't want to (vs. when the money runs out). I just thought I would post this tread to see what other people could do with $300,000. And if the worst (but most likely best) scenario happens put the plan into motion.

What would you do with $300,000.....
 
#5 ·
300K?
Step one, invest that 300K in 90 day term deposits
Take 90 days to buy the boat, ugly but solid, with no brand loyalty or preference, just the best ugly bluewater boat I can find for 75K.
Split 50K into 10K parcels, and invest in 30 day, 60 day, 90 day, and 120 day term deposits, and keep 10 k for cash. that 10K cash is the phase one refit budget. as each 10k note is freed up, it should dovetail with the next refit phase. If not, roll the cash over for another 30 days. you ain't getting rich, but you ain't losing a dime, and you are not spending it, cuz you can't touch it. The remaining 175K invest in in a combo of stocks, bonds, 12 month GICs , etc.
Quit your job- I don't care who you are, but if you are on a tight budget, chances are your current hourly wage is a hell of a lot less than the $90-150/hr that the local yard is charging to do stuff on your boat that you could probably do yourself if you weren't working. The money you save on labour costs will cover your expenses, cuz after all, you got the 300K by selling your house, so you have no mortgage, no car payment, etc., cuz you paid all that stuff off, right? If you didn't, go back and rethink step 1 and step 2, cuz your plan is different than mine.
Besides I'd rather be working on my boat than actually working.
In 6 months you are ready to launch for ports unknown, with a nice shiny looking reliable well equipped safe old boat that you know inside and out, and enough cash to cruise indefinitely, if you are frugal.
 
#7 ·
bljones.... What ROR are you planning on $175,000 to live off? Are you planning to do odd jobs to make a little extra on the side? What yearly budget are you going to require and for how many people? Sounds like you have put together a game plan...
 
#8 ·
Okay, so maybe indefinitely is the wrong word. Figure a 5% rate of return on average, so 10K a year without touching the principal. If you are a retiree with pension income it is doable. If you are not a retiree, then figure that you will have to dip into your principal. Which means you could only cruise for 10 years or so before you have to get a job.
 
#9 ·
You need to allow for inflation. right now it's low but it's doubtful it will stay low for the next 10 years. So expect an average of at least 3% inflation over 10 years. If you expect to spend only $15,000 per year at today's prices, you'd need to get 8% on $300,000 to keep that going indefinately.
 
#10 ·
The approach we're using is quite similar to what bljones proposes, and we are cruising on it right now. In our case we spent $50K for a sound hull with a layout we liked, and $85 to put in exactly the systems we wanted. That included new sails ($5K), new standing rigging (another $5), new Yanmar ($20), new heater, new refrig, new wiring, new dink and outboard, solar panels. Based on our pensions & savings, we budgeted $2000/month for cruising: $500/month for maintenance, $150/month for boat insurance, $150/month for communications, $400/month for food; in our case that left $700/month for discretionary & unforseen crises. Some months there wasn't much discretion -- motoring every day down the ICW, fuel cost over $400 one month. But since we arrived here, we have spent less than $50 for fuel for the last 2 months. The OPs $300K would last about 6 or 7 years on our budget without working at all, and they could stretch it by cutting back on the "discretionary" so escaping the paradigm is certainly do-able. Hope this helps. -e.
 
#16 ·
and $85 to put in exactly the systems we wanted. That included new sails ($5K), new standing rigging (another $5), new Yanmar ($20), new heater, new refrig, new wiring, new dink and outboard, solar panels.
That is very interesting eryka
Would you mind expanding that list a little and share how the 85k got split up.
You have 135 into your boat but I suspect it is in better shape that a new boat. What do you figure a new boat similarly equipped would cost? I'm guessing 290, am I close. How many months did the refit take and how much did you do yourself?
 
#11 ·
For perspective, 300k$us at 1.5% divided by 365 is about 12.33$us/day in interest income (4.5k$us/year). That may seem like nothing to some people, but compare that to the following chart ...



How to use that chart, the right most bar is the percentage of the world's population that lives under the poverty line if the poverty line is set at 10$us/day. Yep, 80% of the people in the world live on 10$us/day or less.

How do they do it ?

Experiment - go to the grocery store with 10$us in your pocket and go shopping. No, skip over the potato chips, hamburger, and ben and jerry's ice cream and go to the aisle where beans and rice are sold. Now spend your 10$us buying as much dried beans and rice as you can buy, better get a shopping cart, it is going to be heavy! Don't like beans and rice ? Go to the refrigerated section and see how many chicken eggs you can buy for 10$us, again, you're going to need that cart! Oh, or how about sugar, go to the baking aisle and see how far 10$us gets you with sugar, more sugar than you and your family are going to eat in a month and then some. Don't like any of that ? Head over to the produce section with your cart and start piling bags of potatoes in until you hit the 10$us mark, hope you like potatoes, because you just bought a few weeks worth! :)

One 50$us sushi dinner in the United States can feed a family for a month if it is spent well.

Most people in this country just have no concept of how well off they are.
 
#14 ·
wind_magic... I agree with you that the western society is very privileged. Having traveled to many remote places of this world, with work, I have seen things make me fully aware.

This thread however was started with the cruising strategy in mind. I don't think anyone wants to argue world hunger or how many people under the poverty line are full time cruisers. I understand your point of make what money you have work. What yearly budget are you using and how are you doing it?

If you had $300,000 what would you do.... Boat, budgetary items, and capable length of time.
 
#15 ·
This thread however was started with the cruising strategy in mind. I don't think anyone wants to argue world hunger or how many people under the poverty line are full time cruisers. I understand your point of make what money you have work.
No of course my intention wasn't to start a discussion about world poverty, in fact, the World Bank doesn't even use 10$us/day as a poverty line, they only put that on the chart because that is similar to the U.S. poverty line, that's why there is that big jump from 2.5$us/day to 10$us/day. I only wrote that post to remind us all (me included) that money can go pretty far in some people's hands, that 80% living on 10$us/day, not all of them are "poor", most get along just fine on that amount of money, have homes, raise kids, etc, live happy lives.
 
#18 ·
Smackdaddy - I guess I should have elaborated on what paradigm I was trying to escape... Stuck in the 9-5 working like an indentured servant.

I know I am not the first dreamer and like most timing will determine the boat. If you only had $300,000 for everything what would you do?
 
#19 ·
I'm joking Op (kind of my schtick). Actually, in my case my indentured servitude is pretty self-serving.

Even so, I think I'll go with bl's or eryka's plans. The key is to get out there and soak it up.

Three sheets to the wind.

Cheers dude.
 
#24 ·
Here's 3 policies I found on ehealthinsurance...

We're 2 mid 50's non smokers.

Aetna PPO, $3000 deductable, 0 coinsurance, $521/mo

United Health Network, $2500 deductable, 0 coinsurance, $445/mo

Celtic PPO, $5000 deductable, 0 coinsurance, Office visit $15, $461/mo


I then talked to a recommended local insurance broker. He has similar rates for me as well.
But, what if I get dinged for health issues? Here in Michigan, we have state regulated BCBS and they are required to carry me at decent rates. The broker estimated that we would face a $500/mo rate for a $5000 deductable with 80% coverage after that. The broker also mentioned that Michigan is one of the lower cost states for health insurance. We're reconsidering Florida as a cruisers residence as that state has relatively high health insur rates.
 
#26 ·
On cruising under $300,000

This question reminds me of a short essay by Sterling Hayden, 1916-1986 , actor and author of 'Voyage', a fine square rigger yarn. To quote: "To be truly challenging, a voyage, like life, must rest on a firm foundation of financial unrest. Otherwise you are doomed to a routine traverse, the kind known to yachtsmen who play with their boats at sea---"cruising" it is called. Voyaging belongs to seamen, and to the wanderers of the world who cannot, or will not, fit in. If you are contemplating a voyage and you have the means, abandon the venture until your fortunes change. Only then will you know what the sea is all about. 'I've always wanted to sail to the South Seas, but I can't afford it.' What these men can't afford is not to go. They are enmeshed in the cancerous discipline of security. And in the worship of security we fling our lives beneath the wheels of routine--and before we know it our lives are gone. What does a man need, really need? A few pounds of food each day, heat and shelter, six feet to lie down in, and some form of working activity that will yield a sense of accomplishment. That's all--in the material sense. And we know it. But we are brainwashed by our economic system until we end up in a tomb beneath a pyramid of time payments, mortgages, preposterous gadgetry, playthings that divert our attention from the sheer idiocy of the charade. The years thunder by. The dreams of youth grow dim where they lie caked in dust on the shelves of patience. Before we know it, the tomb is sealed. Where, then, lies the answer? In choice. Which shall it be: bankruptcy of purse or bankruptcy of life? "
 
#28 ·
This question reminds me of a short essay by Sterling Hayden, 1916-1986 , actor and author of 'Voyage', a fine square rigger yarn. To quote: "To be truly challenging, a voyage, like life, must rest on a firm foundation of financial unrest. Otherwise you are doomed to a routine traverse, the kind known to yachtsmen who play with their boats at sea---"cruising" it is called. Voyaging belongs to seamen, and to the wanderers of the world who cannot, or will not, fit in. If you are contemplating a voyage and you have the means, abandon the venture until your fortunes change. Only then will you know what the sea is all about. 'I've always wanted to sail to the South Seas, but I can't afford it.' What these men can't afford is not to go. They are enmeshed in the cancerous discipline of security. And in the worship of security we fling our lives beneath the wheels of routine--and before we know it our lives are gone. What does a man need, really need? A few pounds of food each day, heat and shelter, six feet to lie down in, and some form of working activity that will yield a sense of accomplishment. That's all--in the material sense. And we know it. But we are brainwashed by our economic system until we end up in a tomb beneath a pyramid of time payments, mortgages, preposterous gadgetry, playthings that divert our attention from the sheer idiocy of the charade. The years thunder by. The dreams of youth grow dim where they lie caked in dust on the shelves of patience. Before we know it, the tomb is sealed. Where, then, lies the answer? In choice. Which shall it be: bankruptcy of purse or bankruptcy of life? "
+300,000
 
#29 ·
Just marking my spot, interesting thread.
 
#32 ·
If I had $300,000 I would be able to cruise for a few years. If you only take home 2% annually, that is still $6000. I have a Haida 26, and $6000 goes a long way on a Haida 26. Heck, a repower is $2000 ! New mainsail $2000. Genoa from a Catalina 25 would work. These are cheap. Food for a year: $4000.

So maybe my fortune would slowly dwindle at 2%... if I didn't work at all, and kept her in top nick.
 
#34 ·
Cruising for $300,000

I have no statistics to support my statement but I suspect the majority of cruisers spend less than $300,000. For that kind of money I could live on a cruise ship for 10 years. (about $700 a week) I could charter a boat for 3 years. I could buy 10 Cal 29's for $120,000 and throw them away as they break. In the 60's I hitch hiked from San Diego to Mexico city and back. I left with $80 and returned a month later with $20. I cruise the same way. A good piece of classic plastic for $15,000 or less. Cal, Ericson, Columbia, C&C, Contessa, etc. 30 feet or smaller. Outfitting would be in the hundreds, not thousands of $. No refrigeration, no power water pumps, no radar, no SSB. GPS & a sextant, charts, food & fuel. One of my biggest expenses would be cruising permits and port fees. I could pay for the boat and be gone for months for under 20k. I could go the Joshua Slocum route for half that. The rest of the 300k could go to purchase rental property to provide income. I admire those who cruise their pristine projects. I've sailed on a few. Drove an 86' Sparkman Stevens ketch from San Diego to Hawaii. 3 storms, 11 no sun days, 15kts with spinnaker and 24kts surfing the 30' swells. Spent 40 thousand in Hawaii on sail and gear repairs. The boat left for Guam with broken trash compactor, generator fried by saltwater intrusion when flapper exhaust valve failed. Bilge pump in-op due to pin-hole leaks allowing air through the pipes. (we pumped every few hours) because water was getting down through the chain locker hatch, + block ice because the frige crapped out.. Washer dryer inop. etc. etc. $$$$ Guam was another $10,000 for fuel and repairs, by then the crew was using a coleman camping stove to cook with and a honda generator strapped to the deck. When this 2 year old yacht was finally delivered to Singapore, the owner spent another half million removing the aft steering wheel to install a hot tub. Hence, my classic plastic under 15k production boat leanings. Just my 2 cents concerning $300,000, nuff said.
 
#36 ·
I could buy 10 Cal 29's for $120,000 and throw them away as they break.
:laugher this brought me the LOL
Drove an 86' Sparkman Stevens ketch from San Diego to Hawaii. 3 storms, 11 no sun days, 15kts with spinnaker and 24kts surfing the 30' swells. Spent 40 thousand in Hawaii on sail and gear repairs. The boat left for Guam with broken trash compactor, generator fried by saltwater intrusion when flapper exhaust valve failed. Bilge pump in-op due to pin-hole leaks allowing air through the pipes. (we pumped every few hours) because water was getting down through the chain locker hatch, + block ice because the frige crapped out.. Washer dryer inop. etc. etc. $$$$ Guam was another $10,000 for fuel and repairs, by then the crew was using a coleman camping stove to cook with and a honda generator strapped to the deck. When this 2 year old yacht was finally delivered to Singapore, the owner spent another half million removing the aft steering wheel to install a hot tub. Hence, my classic plastic under 15k production boat leanings.
Mo' money Mo' problems! Seems the trick is to pretend you don't have $300,000, may be the decision to get a $50-100k boat may not be so automatic.
 
#35 ·
..... This needs to include the purchase of the boat, outfitting, how many years you think you could make it last and any other budgeting you would do. To each there own on how they would spend it...

My thoughts...
Boat - First Tayana 42 CC then Cabo Rico 38 - $110,000
Outfit - $30,000
Yearly Budget - $35,000 (2 Adults, 2 Kids on the hook mostly)
Years on the Water - 4 (If I spend less yearly I would go longer)
Emergency Fund - $20,000
Location - Start in the Caribbean and make my way over to the South Pacific but depends on boat location...
You are asking a question that only you can really answer.

Look at the responses, all over the map and each thinks they are correct and for them they are. I'll give you my correct responses to some of the issues.

The boat: Try to get the boat for $110K complete. Start with a $50K to $75K boat, smaller is better. Sail it for a couple of years first to get it set up the way you would like. It will take much longer to do this part than you think so plan 2yrs, might take more depending on time you can put to it.

You might be able to gain freedom from slavery and work on the boat but then it might feel like you are a slave to the boat and not living the dream. In that case sail a bit and work a bit. Takes longer but better than packing it in early.

Annual budget: Sounds good but things like insurance seem really crazy expensive when it means you are spending the end of the trip for such purchases. Besides insurance has always been a mugs game. As for health insurance, we couldn't get any that would cover much, and even the best had very low limits, like $20K. Better to set aside money for that and end the dream early if something happens, unless you can get insurance you believe in and think is cheap.

Emergency fund is everything left, no need to set anything aside for that.

We started out living in poverty as some have suggested. Having actually been poor for me it is hell, a hell I quickly remembered. Better to live rich and die young unless of course you have always been comfortable in which case pretending to be poor can be fun. Like camping. Some like camping, I call it living on the street. Yeah I can do it by why in God would I chose to. Just be comfortable and let the cost eat into the end of the trip.

Keep in mind that getting back to making money, unless you have things like pensions or a government that will help, will cost alot of money. You can't run things down to zero, not even close. Do not plan or count on selling the boat at the end. You may not have it, and if you do it will not be worth anything near what you think it is.

I would suggest planning for at least a year of high expenses at the end to transition back to land/work.

And then of course your mileage will vary. Seems to me that much of what I've suggested would not apply to you so like most of the posts in this thread just ignore most of it and pick what you want from it.
 
#39 ·
Boats are like cars our houses... Everyone has an opinion about what they need or could afford... For us a family of four might require a bigger boat than a single. In my mind you need to keep the crew happy or you'll have a mutiny on your hand.

That's why I think it is interesting to see what everyone would do with $300,000. Some feel that is a ton of money for cruising some think that isn't enough for even the boat.

What would you do with $300,000???
 
#41 ·
Eryka—

You need one more solar panel... :) Then you could leave the diesel off... :)
 
#42 ·
Eryka-

You need one more solar panel... :) Then you could leave the diesel off... :)
Nope. Just more sunshine. As the days get longer, it'll work out even better as we make more power. OTOH, as the days get longer the water gets warmer, so we need more refrig, so that uses more power ... :rolleyes:
 
#45 ·
Davidpm, an additional thought is that Dan wasn't working on the refit fulltime, more like 1/2 time and doing his Navy Sailing thing the other 1/2. So your equation should be 20x50x100 ...
 
#46 ·
Eryka,
My retired co-worker called me yesterday to chat a bit. He and his wife are cruising a Defever 49 named "Trust Me". He told me as of yesterday, they were in Staniel Cay for a few days. If you see his boat, give him a shout and tell him "Sparkie" says hello. They are good guys and this is their first cruise. They are living the dream (as it sounds like you are!). I checked your link, the sharks are cool............
DD
 
#49 ·
I DID see that boat a couple of days ago ... will definitely look for them! Right now we're boat-bound, rain and wind.
 
#52 ·
David—

I'd point out that some people can indeed get a boat for $15,000 and fix it up and sail...but the requirements they are going to have are going to be very different from what Eryka and her husband have. For instance, chances are likely that they are a good deal younger, with fewer financial resources and lower standards of what living conditions they'll put up with to achieve their goals.
 
#53 ·
David-

I'd point out that some people can indeed get a boat for $15,000 and fix it up and sail...but the requirements they are going to have are going to be very different from what Eryka and her husband have. For instance, chances are likely that they are a good deal younger, with fewer financial resources and lower standards of what living conditions they'll put up with to achieve their goals.
Actually I've done it for that exact number (15) and didn't even worry about the fix up part so I know exactly what you mean.
However I was always worried about the engine, the water did not work, none of the electronics worked, the rigging was original, the steering failed and there was much, much more wrong. It did sail however and that was the point.
Of course I was not moving aboard with my wife and promising a few years of safe, fun sailing in new and exotic ports either.
 
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