Geez, I had forgotten about starting this thread.
First off, I'm thankful to Jim Trefethen for his book, because it did cast long-range financial issues is a harsher light than most cruising books. The recent financial changes definitely draw into question his ideas about "cruising on the returns" of investments, but those were ideas of his time, when 14% returns were happening in some cases.
We shouldn't also forget that his actual cruising was entirely different-- $25k wooden boat, several enjoyable years with his wife and two school-aged children in the early 1990s. He didn't wait to have a million dollars-- he went. If anything, the book was about wanting to go again, but having the bucks to make it last some how.
Since I started the thread in 2006, we've done a lot. For awhile, it seemed like "go now" or "go later" was the big question, but then we started to think about basic principles, as Tom Cunliffe
likes to say over here. We wanted to sail, we wanted our kids to have global experiences, we wanted to live a simpler life with less stuff, and we wanted to see much more of the world.
Anyway, in some ways we're living the cruising lifestyle even though we're not cruising yet (as Trefethen recommended). We sold the big house, the two cars and nearly all the toys. We moved to Europe, have great jobs, the kids love their school, and we own and sail a tough 34 foot boat that's 90 minutes away by train. We don't own a car, and we don't have a yard, and you can forget about shopping at Costco, but we don't miss those things at all. On vacations we sail the English Channel, visit cities in Europe, or spend time with our family in the Pacific Northwest.
Our current boat is paid off, and if something really went awry we could cruise for 2-4 years on savings (with some real concessions to lack of space). At the moment, though, life is good, and we're achieving the basic principles, have health care, have retirement savings, and all that good stuff.
If we can travel and sail enough in our current lifestyle, maybe in the end we will go for Option 3 (as defined in the first post of this thread), even if the means the kids choose between cruising with us or not when they are done with high school.
So, the worst case scenario for me was to live a sort of Walter Mitty life, "saving for the day" that doesn't actually come in the end (which parts of Trefethen's advice sounded like). We aren't doing that, and in my work here in London, it's amazing how many Americans I meet whose entire careers have been around the globe, working for corporations or in schools, and overall they amazing, intelligent and flexible people. (Basically, the qualities maybe most of us hope cruising will lead to.)
That's the update-- it was fun to see this thread come up again.