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c172guy 03-22-2004 08:38 AM

Is the Falling dollar changing your plans
We have been planning to retire early to sail for a couple of years for about 10 years. Doing without to put a little more in the 401K. During the last 3 years the 401K has dropped at least 40%. Last years bounce didn''t bring it back to 2000 levels. The artifically low interest rates have left few options to make money. Now the dollar''s falling value is beginning to add up...Maybe 40% in the last 3-4 years.
How is it affecting cruisers??? Are you changing plans??? I guess the effect is greatest in europe. How about other sailing areas??? How are the ones out there living the dream doing???

WHOOSH 03-22-2004 08:47 PM

Is the Falling dollar changing your plans
c172guy (gosh, a first name would be nice...)

We''re probably a good testbed for ''cruising plans vs. the U.S. dollar''. While we were in the Caribbean, we watched 9/11''s effects (presaged by a softening economy the popped tech bubble) result in many cruisers heading home along with owners of bareboats being chartered who didn''t have customers. This was lesson #1: cruising funds don''t belong in leveraged or volatile investments; those funds will clearly be needed and used steadily over time, and so capital should be preserved. We saw some very painful stories...

As we began preparing WHOOSH for a crossing, the Eruo was at 87 U.S. cents (a figure I remember well). As we cruised the South Coast of England 10 months later, the Euro was at $1.25 USD (a growth of 47% against the USD) with the BPS (the ''Pound'') having strengthened about 20%. Things remain roughly at that level, altho'' the common wisdom is continued USD weakening for the next year or more (due to the Presidential race, a slow U.S. recovery promising continued low interest rates that dissuade buying U.S. debt instruments, a lousy fiscal future due to an increasing deficit, and so on).

This may all sound/look gloomy, but I don''t think this creates a fundamentally different circumstance than when we cruised in ''78-''79 or ''88-''89: there are always financial surprises (''out here'' or ''back home'' or with the boat), there''s inevitably more to do & see than the kitty allows for, and in truth even cruising sailors with tight kittys enjoy a standard of living several notches above ''basic'', with a myriad of small pleasures and an abundant overlying freedom to adjust and accommodate to one''s circusmtances.

The cost of a restaurant meal, a cab or a movie here in London has been breathtaking and beyond our reach...yet we''ve loved being here this winter. The museums and historical sites are almost always free, public transport is abundant and cheap (if you plan a day''s outing well), the nearby grocery store has items on sale each day, some boat improvements can wait for another day (and cheaper Holland), enjoying creative cooking aboard is a satisfying alternative, supplemented by a nearby outdoor internat''l marketplace that''s fascinating & 800 years old...and so forth. And like many others, we track every single penny (''pence'') we spend, lay it over a carefully constructed budget at each month''s end, and try to plan thoughtfully for the future...about the opposite of what most folks think ''rich yachties'' do when off cruising.

While exchange rates have changed in the wrong direction, some things haven''t. You''re only getting older, your health will only come under increased risk, your boat''s systems will only wear more, and the opportunity to see fascinating places and meet wonderful people - already a finite opportunity - will shrink further. You can change your intended itinerary, you can ratchet down your expectations and therefore your budget, you can increase the care with which you spend, you can dumb down the boat and give up on those ''must haves'' that really aren''t...but you can''t turn back the clock. So really the choice is the same that potential cruisers have always faced - do it at some substantial cost (career, savings, whatever) or just think about how things aren''t ''perfect'' and so it''s better to wait a bit longer. And that''s a choice that no one else can make.

But for the sake in part of those of us who are out here, be sure to think carefully about our collective future and arrange for absentee ballots before you leave, if you do. The one thing that has changed demonstrably is the collective view of our country by others; we are now often viewed as the petulant rich kid on the block who looks out for himself and only cares to be a world citizen on our own terms. That IS something we can change.


DuaneIsing 03-23-2004 02:44 AM

Is the Falling dollar changing your plans

Your response to C172guy''s question on cruising with the "falling dollar" was excellent. I won''t paraphrase your main message about our finite time, but it is well worth reading.



c172guy 03-23-2004 06:59 AM

Is the Falling dollar changing your plans
Thanks Jack!!! My name is Tom, not trying to be secretive. We''ve pretty much decided that one more year is the most we''ll work before retiring. My wife''s 56 year old co-worker has cancer and has been sent home to die as the cancer has spread too much. She has cried a lot over her friend. Another year will allow us to have a paid-for boat.. But we''d like to leave NOW. My brother in law retired early(that or be laid off) just before the stock market crash and has since gone back to work at less than half the salary. That has made us a little more cautious. But one thing is certain, "if we wait long enough we''ll be dead"

staceyneil 03-23-2004 08:30 AM

Is the Falling dollar changing your plans
Hi Jack,

I just wanted to thank you for your very thoughtful and well-written post here. I couldn''t agree more, especially about cruising having "substantial cost (career, savings, whatever" but being still worth it; and about the imprtance of absentee ballots, particularly given our current situation and world opinion.

We hope to leave in July if the boat is ready!!!


WHOOSH 03-23-2004 08:56 PM

Is the Falling dollar changing your plans
Stacey, thanks for the nice note.

"We hope to leave in July if the boat is ready!"
I know you''ve tackled a huge refurbishing project...but I can assure you the boat will not really be ready by July (no boat ever is...) so the real challenge is to get the pieces ready that really need to be, and then plan on doing what the rest of do.<g> It isn''t by accident that cruising ends up being ''working on boats in exotic ports''.

Good luck on the final prep: boat, family, house and logistics! (And those absentee ballots...)


WHOOSH 03-23-2004 09:01 PM

Is the Falling dollar changing your plans

I don''t mean to treat lightly the big challenge it is to fund one''s retirement successfully...and I can appreciate that it''s a lot easier to say ''to hell with tomorrow, go smell the roses'' than to live with the consequences several decades (and much inflation) later. But one learning for me is how ''cruising'' is much more a state of mind that it is a geography challenge, and that''s why I suggested that you consider adjusting your goals a bit (re: what the boat gets from your wallet, and what you do with it).

For some, even relocating to warm, sunny Florida (or wherever you are drawn to) and seeking out hourly jobs for six months to cover living expenses is a fresh experience with lots of fun, no work-related anxieties such as we often experience in ''real jobs'', and a change of venue and chance to explore. Perhaps that''s nothing more than acknowledging that half a loaf''s better than none. <g>

Good luck on sorting out the puzzle!


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