The Cruising Life, by Jim Trefethen, and Cruising Financials - Page 2 - SailNet Community

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  #11  
Old 11-01-2006
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Hayden's quote mentioned above triggered some feelings we had after returning home after 6yrs of full time cruising. We were in shock returning to a culture of extreme materialism. Americans are into their "stuff". Buy, Buy, Buy. From cell phones to HDTV to SUV's etc. And it can be a trap as we have to maintain and support this lifestyle. It's hard to give up "stuff" for a cruising lifestyle where this "stuff" is not available. I am reminded of many places in Central Amer. where a night out is families walking to the town square and socializing with each other and perhaps listening to an impromtu musician playing an instrument and singing. Wow, this was something we really looked forward to when arriving at a new port. Anyway we are home now and I hope we have a better appreciation of what is really important. Take care...Dave&Karen
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  #12  
Old 11-01-2006
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Those lofty bank account/retirement account figures are scary because I know it'll be a long time before I can put that much away. However, I still have a plan. I'm currently focused on paying off all my debts (including the house, eventually) and living on less than I make. I refuse to take out any new loans (auto, home, credit card, boat). I'm driving a paid for "beater" car. The goal is to make my income work as efficiently as possible. (Most of the preceding is part of Dave Ramsey's plan).

I'm still at least 3 years away from casting off.
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  #13  
Old 11-02-2006
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Early Departure, Anyone?

Quote:
Originally Posted by kwaltersmi
I'm still at least 3 years away from casting off.
Ugh, I know the feeling. It's too easy to think of scenarios that would "force" an early departure, even with low numbers in the kitty and for the boat. Who cares if the money runs out? I'm not certain if this saving and planning is making it easier to do career work, or harder...

I feel lucky that I have a basic and affordable 27 footer to enjoy in the meantime (and yes, I've pondered how far we could go in it).

Jim H
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  #14  
Old 11-03-2006
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I'm between boats. I've contemplated purchasing a cheap 25' Coronado last summer just to keep me sailing, but I decided it was better for the budget if I just used the money to pay down debt.

And yes, the saving/anticipating makes the current career harder at times!
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  #15  
Old 11-03-2006
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If one plans to live off the income from investments, keeping the principle intact one needs a large initial capital to get any kind of a decent income. 500K @ 7% yields $35,000 per annum. If however you set up an annuity using an infinite progression, this substantially increases your income because you are also using part of your principle. Theoretically if you lived an infinite number of years your principle would be zero. You can change the progession to what ever number of years you want. The shorter the annuity period the more you get per annum. Visit a financial advisor and he can set this up for you and it's free - well sort of, it won't cost you anything.
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Old 11-04-2006
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I've seen this $ 30-35000 per annum as a goal to allow a cruising lifestyle often. Is this a conscensus of whats needed, or a goal in lieu of anything else?
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  #17  
Old 11-30-2006
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Quote:
Originally Posted by Waverider
If you religously do this your nest egg will grow to approximately $5 million (returns of 8% and 2% inflation). These numbers assume you are both 25 and working until you are 60.
Waverider, thanks for the numbers. Five million sounds impressive.

When I've "run the numbers," I can also produce pretty big sums, but then they drop as other factors are put in. In the US, I've down-shifted my growth projections to 6-7 percent a year, and I normally add in a 3 to 3.5% inflation estimate. That means a million dollars in 2027 is quite a bit less in today's dollars once 20 years of inflation is figured in.

The other item that seems to throw things off is the cost of health care in the US increasing at well above the cost of inflation, meaning that the $1000 a month we pay now for family coverage (via our employer) may be quite a bit higher in the future, even with medicare coverage for retirement. (I wonder what will happen in other countries in regards to health care costs...)

Real estate has also been rising at higher than inflation, so it's hard to predict what a rental will be in the future... In fact, I wonder if more retirees in the future won't be spread around the globe.

All this aside, it's hard to imagine what will happen next. The US stock market might continue a decent climb, or it might not. A major international event could cause a set back for a lot of us. A new discovery (similar to personal computers) could mean a boon for all of us. Who knows.

Half of me thinks a slow and steady investment plan as you describe is the safe and best way to go, and the other half of me says to "go now, while you know the numbers and know your heath." It's a weird predicament, but fun and interesting.

Jim H
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  #18  
Old 11-30-2006
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Quote:
Originally Posted by Waverider
Investing in the American market doesn't make much sense because as a nation you guys are bankrupt, there are better (safer) ways to make your money grow.
Good grief, that's a little harsh, isn't it? There might be a few ties between our economies.

Don't make Canada sound too good, or we'll all move up there. Then where would you be?

Fair winds!

Jim H
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  #19  
Old 11-30-2006
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Quote:
Originally Posted by Waverider
We don't want that, but you have to check your guns at the border.
Luckily, I don't own any guns...

I think your summary is part right and part overstated. Wars don't last forever, thankfully, and before long we'll all need to deal with alternatives to the oil issue. Maybe there'll be a dark period, maybe there'll be innovations and new collaborations. My parents lived through the depression when they were young, and I know that a lot of us could handle serious challenges if we had to.

I also hope we meet on the water someday.

Jim H
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  #20  
Old 12-01-2006
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Waverider
I would like to take umbrage with some of your remarks unfortunately, yours is a common attitude of a lot of Canadians and especially those that I grew up with as a native of Halifax, and later the Okanogan valley in BC, my family has over 300 yrs in that country. The best thing that ever happened is that my father decided to move to California during the war and "Americanized" us all. Besides Halifax, as an adult I've worked in Toronto, Montreal, and Vancouver and I've seen the same attitude amoung my compatriots as you apparently have.

The fact is without the US at your southern boarder, you probably would have disolved into separate provinces and then into chaos. I'm not sure Canada is even a country anymore anyway. The US provides all your defence, financial investment opportunity, produce and foodstuffs, The government is the greatest employer, 20% on the pogey, AND, explain Quebec???? Maybe you don't remember when the separationists were blowing up cafes and gathering places of the "english". And Rene Lesveque (sp) tried two times to separate do you remember the referendums? IMHO Canada has slipped into a socialist morass since the second world war when canada had some backbone.

I do agree and I don't like it that Iraq is costing the US a lot in lives and dollars, which could be best spent elsewhere, and, I don't like the US being the world's policeman. But If not us, who? Canadians? French? In my perfect world, the US would worry only about things within its boarders, and let the rest of the world go to hell if that's where they want to go. Korea and Iran with Nukes, hell, give some to Somalia, Niger, Botswana, So Korea, Thailand, and any other country that wants them.

Sorry for venting, but your post rung my bell at the wrong time.
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