Join Date: Feb 2010
Location: Narragansett Bay
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Re: My Escape Plan - Insights Wanted
You're getting some great cruising advice and different perspectives. Since we don't really know you, all we can offer are different perspectives. You'll have to sort out what is best for you and I wish you well in the adventure.
The financial part does seem very shaky to me, so pay close attention to it. There is no way on earth to rely on 5% per year after taxes (perhaps penalties in your case) not to mention foreign exchange risk. Not to mention that over time, inflation makes things more expensive, but your principal isn't growing to provide a higher cash flow on your return. Not talking you out of going, but I'm pretty certain the math doesn't work.
Further, your brief description of your current lifestyle might suggest that living on the absolute edge of your resources would be a serious adjustment. Again, only you can know. But one thing missing from your budget that most cruisers seem to budget is a periodic flight home to see family or friends. Often annually while you get maintenance done.
As far as maintenance goes, single items can cost your entire annual budget and eventually will. You can't sail forever with the same sails or rigging. I'm sure you can scrounge and save.
My financial advice would be to save as much liquidity as you can, outside of your 401k. Go cruising until it's gone. Keep it invested safely (low return) and try to supplement with odd work, if you can. Let your 401k continue to earn untouched and build tax free. When you're out of everything else, its time to go back to work. Not a bad deal really.
Best on your adventure. (p.s. you did make one mid-life crisis comment above, but I'm not going to dwell on it. It's for you to sort out)
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In the harsh marine environment, something is always in need of repair. Margaritas fix everything.