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Old 04-01-2014
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Financing a Family Circumnavigation

I've read many books, blogs, and other accounts of families setting out to cruise for several years. Everytime I ask myself: how did they finance this?
I know there are many different answers and budgets based on lifestyle choices, timelines, risk tolerance, etc. So to set some parameters:

Say a 4 year trip for 4 people, 2 adults and 2 kids

Boat: $300k
Yearly costs: $50k (assuming no boat payment)

Lets call the total $500k and ignore yearly interest and such. Where does this $500k come from? Are people raiding their 401ks and taking the penalty? Are people financing the boat and making monthly payments? Does the insurance issue prevent the boat financing, which means you have to $500k liquid?

When I think about incomes, the cost of living on land before the trip, and the required trip dollars, it never seems to add up.

So, how do people do it?

Josh
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Old 04-01-2014
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Re: Financing a Family Circumnavigation

Josh, for starters, I think many people aren't going off in $300,000 boats. Many are doing it in $50K-100K boats, and some even less expensive. I'm also not sure that $50K is accurate for some. Many are working while they cruise, too. Most also don't own real estate; some sold while the market was good, and had enough to buy the boat and have a nest egg, too.
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Old 04-02-2014
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Re: Financing a Family Circumnavigation

All sorts of answers. some sell their homes to buy their boat, some have made it a ten year plan and lived beneath their means for a decade to be able to take a year or two off at a time, some are lucky enough to be able to telecommute and can continue to work while cruising. some some went small and went now.
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Old 04-02-2014
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Re: Financing a Family Circumnavigation

Lot's of way, as mentioned. Personally, I would not blow that kind of money on a circumnavigation. I don't really get why circumnavigating is so attractive anyway. Awesome accomplishment, perhaps that's the draw. However, I will never get to everything I want to see in the Atlantic, so I don't get why I would need to go further.

Another method commonly used, is to put your boat up on the hard from time to time, fly home and go back to work.
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Old 04-02-2014
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Re: Financing a Family Circumnavigation

Among the long term family cruisers/circumnavigators we know, there are lots of different answers.

Like BJ said all of the above. You find a way that works for you. Cruising around the world will not ever make economic sense. You either get over that, or you get over sailing around the world until you retire at least. There is always going to be some sacrifice.

I know several people who were successful small business owners, who have sold the business and are doing it off the back of that and I know some that do a bit of work as they go, and I know others who are on limited budgets for a limited amount of time. They are the common three stories.

What I can tell you is what our rough plan is. Subject to change, YMMV.

Our Boat: 35ft. 20 years old. Worth 100k. Payed off while still working. Major refits/upgrades undertaken now before we go, so no 'big ticket' maintenance while cruising( We hope).

3 years cruising with an option to extend on 35k a year.
We expect to spend far less in Asia and more in the Med if we get there. ( We are not necessarily circumnavigating, because of the Gulf of Aden/Cape Horn pickle- subject for another thread .

Our total 105k.

We will rent out our house, which will cover the mortgage and give us something to come back to and help a bit but not much with money while cruising.

The balance of the 105k needed is just savings from blood, sweat and tears, not buying stuff, new cars, not going on holidays etc. Our get out of jail card is that once the 100k is gone, we can sell the boat and recoup the 100k back.

Our plan I guess can be summed up as 'cheap boat, low to moderate cruising budget, but with minimal financial risk'.

When the money is gone we sell the boat and come back. The house is untouched. We are free to cruise, but we also haven't sold the farm to do it. The perfect 'Have your cake and eat it too" approach? Will it work?? I don't know, ask me in 2018.

We could of however sold the house, bought a Hallberg Rassy and gone for broke. Trust me everytime I see one those darn pretty boats I am real tempted. For us though it wasn't the right fit. Other families are in different situations and have made different decisions.

For example if you can be smart about the boat you buy, how you buy it and what your plan then selling a house to buy the boat might be an option if your plan is a fixed 4 years. For this to work think buying a popular easy to sell 2 year old production boat, keeping it in good condition, and having in your plan that you will sell it in 4 years, hopefully only at a modest loss.

Several Australians I know actually have over the past few years bought a 2-3 year old Beneteau 40 something in Europe and sailed it back to Oz and sold it for a profit.

If you haven't already I would suggest having a good look at S/V Totem - a family sailing the world. Behan talks honestly about what there costs have been so far and how the money is working out.
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Old 04-02-2014
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Re: Financing a Family Circumnavigation

If you have to ask the question about the $300k boat and $50k cruising budget you can't afford to go that route. Some people just have lots of money - we met folks cruising on $2 million boats and they weren't worrying about paying for it all. Most people do it with a much cheaper boat and much lower budget. the methods mentioned here pretty much make sense except it is very, very rare that people work on route unless it is some form of telecommuting. Flying home to work also happens. i am back in Canada now working and will return to the boat in Grenada after hurricane season.
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Last edited by killarney_sailor; 04-02-2014 at 08:12 AM.
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Old 04-02-2014
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Re: Financing a Family Circumnavigation

I don't think i know enough about sailing to reply to this but i do know a little about budgeting and living without a lot of money.
Firstly i honestly do not see how cruising would cost so much per year. what are they spending the money on? i feed myself and 4 others on less then 400 a month that is 4,800 dollars (it would most likely be even less since most of the stuff we eat, you couldn't take on a boat cruising because it would spoil) whats the other 25,000 dollars for? obviously i dunno how much it is to live in other countries but if you are cruising, i assume you are not "living" in places as much as sailing past them, so i assume the money is for food and fuel, i have other posts on how i would cut the cost of food down to practically nothing,so i wont go into it here, i just think a lot of people cruise, and i think a lot of people are doing it for less then the numbers i see being projected., i have seen you tube videos of people who work between trips though . a lot of cruisers seem to be retired people also with fixed incomes and stuff. i think cruising is like everything else, I've seen people who make 37 dollars an hour piss and moan about being broke, wile i live pretty happily on so much less, i think the trick to cruising is actually sacrifice, you are going to have to give stuff up to go , i really don't think you are going to be able to sail a 20 year old 37' around for 2 years and then resell it for 100 grand. there is to many newer boats for less. but like i said, i am ignorant of sailing right now, and the cost of sailing SO i could just have really optimistic ideals about the cost of it or something, i think i could cruise for a lot less then 30k budget though.
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Re: Financing a Family Circumnavigation

Quote:
Originally Posted by GreenNonic View Post
...... Firstly i honestly do not see how cruising would cost so much per year. what are they spending the money on?.
Boat repair
Mooring
Entertainment
Restaurants
Insurance
Medical care
Immigration fees
Every other incidental you might need over the course of several years. You'll even need to replace some of your clothing.
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Re: Financing a Family Circumnavigation

Thanks for the details chall03, those are the kind of details I am trying to understand. I picked those parameters as rough guesses. I also didn't intend to over constrain to circumnavigating, perhaps sabbatical is a better term.

Boat: $100k
Yearly costs: $35k

Is still a solid $250k one had to come up with.

I could see that being in reach for retiring boomers with pensions or houses that appreciated during the housing boom. Might be tough for someone in their 30's today to get to

Josh
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Re: Financing a Family Circumnavigation

Quote:
Originally Posted by engineer_sailor View Post
Thanks for the details chall03, those are the kind of details I am trying to understand. I picked those parameters as rough guesses. I also didn't intend to over constrain to circumnavigating, perhaps sabbatical is a better term.

Boat: $100k
Yearly costs: $35k

Is still a solid $250k one had to come up with.

I could see that being in reach for retiring boomers with pensions or houses that appreciated during the housing boom. Might be tough for someone in their 30's today to get to

Josh
I like a combination of the scenarios above (assuming you are a typical engineer with a house and a little savings): Buy the boat while you're working. If you already own a home, what extra can you pull from it by renting it while you're gone? Even if the rental of you house only nets you 1K / month, you then only need 80K for a 4 year trip (on that 35K budget). Can you burn your IRA? Tell the kids that a year cruising is gonna pretty much it for the idea of college savings (who is gonna be able to afford college when they get there anyway, right?)? Maybe just take a 2nd on the house for that extra cash. It all depends on how much it means to you and what you're willing to give up (you realize you'll have to do something illogical . . . right? :-)).

A 3 year tour of the Caribbean might only require 50K to buy and outfit a boat . . ..

If you are hand to mouth on land, and you really want / need to cruise, you'll probably have to re-conceptualize what cruising means to you . . . as you say maybe something other than a circumnavigation. Kids who grow up on a boat probably take away an awful lot regardless of the cruising grounds.
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