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-   -   My Escape Plan - Insights Wanted (http://www.sailnet.com/forums/cruising-liveaboard-forum/94000-my-escape-plan-insights-wanted.html)

eric-the-red 11-11-2012 02:40 PM

My Escape Plan - Insights Wanted
 
Hello everyone, new to the forum and excited to see all the great posts and information!

So, after 9 years I've decided living 8 hours a day in a cubicle just isn't cutting it and I think I've stashed away enough money that I might be able to buy a boat, head south and self sustain for quite a while.

I want to lay out my plan and hear from those of you with actual experience living this life what I may be missing. so please feel free to give your insights on my thinking around boat, destination, route, financials, or any other areas I'm maybe missing something.

Background: single guy, 40ish, no kids, raised sailing/racing a 35 footer on Lake Erie, 7 years in the Coast Guard, lived on my 37-foot Islander in Hawaii 2 years and a 35 Cruisers power boat for 2 years in North Carolina. Currently don't have a boat and live in Pacific Northwest.

The Finances:

Since I need the prep time in a number of areas, I'm giving myself 11 months to prepare.

I'll be selling everything - house, car, motorcycles, etc and if I wait to leave after our annual bonuses in Sept, I'll have just over $300k in various accounts, including 401k.

I plan to spend about $50-60k on a boat and $25-30k outfitting it. I'm thinking I'd buy it outright to avoid need to carry insurance. Currently liking the 80's Moody 37 or 376s. Seem well-built, comfortable cruiser with decent speed/sailing manners and a solid reputation.

That'll leave me about $200k in the bank. I'm thinking at 5% returns, I'm bringing in $10k a year. While I know you can spend a fortune cruising, I'd like to stick to a $500/month living budget = $6k year. Is that realistic?

I'm also thinking about $4k/year maintenance/repair budget.

So $10k a year incoming and $10k a year in expenses and I wouldn't have to touch my principle balance. This makes me think I can be pretty self-sustaining for quite a long time without having to work. But maybe I'm deluding myself. Is this a realistic budget for a 37-foot boat?

Insurance is a major concern. I'm thinking I won't get it on the boat, and I'm not sure about getting it for myself. I'm pretty healthy and don't typically need doctors. Do most cruisers have health insurance? How does that work in Mexico/Bahamas/Caribbean? Seems like this expense alone could blow my budget. Maybe Obama care will help! Or maybe I don't get it?

Escape Plan:

Use the winter prepping myself - diesel repair, first aid, spanish, SSB and navigation classes. Plus reading books on cruising - good books I should get? Plus finding the right boat.

I'll sell the house, buy the boat and move aboard next spring.

Spend the spring and summer prepping the boat, testing and practicing and leave in late Sept/early Oct and head straight down the West Coast stopping in harbors along the way so I'm doing mostly day trips.

Probably start off with a friend helping me make the passages so I can have some extra safety margin as I acclimate to the boat and long sails. Ideally hook up and shadow some other cruisers along the way so I can learn from more experienced sailors too. Is there an annual southern migration from the PNW I could join?

Goal is to get down to Mexico by end of October and then spend the next year or so cruising the Baja Peninsula & Gulf of Cali.

Then thru the Panama Canal and cruise Caribbean for a year or so.

Then probably a major haul out and head to Europe/The Med.

So, that's the plan so far. What do you think?

Lake Superior Sailor 11-11-2012 03:38 PM

Re: My Escape Plan - Insights Wanted
 
Sounds great! Lots of luck & may the winds be with you!..Dale

Capt.aaron 11-11-2012 07:03 PM

Re: My Escape Plan - Insights Wanted
 
If I had that financial set up no one would ever hear from me again. I've done it a long long time on not nearly a fraction of what you have. Never had insurance on my boat and only recently have health insurance, I still get my dental done in Honduras because it' cheaper than my deductable.Go for it!

Geoff54 11-11-2012 08:01 PM

Re: My Escape Plan - Insights Wanted
 
Quote:

Originally Posted by eric-the-red (Post 946847)
That'll leave me about $200k in the bank. I'm thinking at 5% returns, I'm bringing in $10k a year.

Where do you get 5% from? I like the plan but you are not going to get more than about 1.5% on any "safe" investment. You might find an introductory rate a bit higher but even then, not 5%. The only way you might realize 5% will be by accepting some risk and actively manage your money and, if you have the skills and the risk tolerance to do that, think about the mechanism(s) you will use to keep track/trade from a boat. Or think of what else you can do along the way to make some extra money.

Good Luck to you!

BTW, if you have a safe way to make 5%, I'd REALLY like to know.

Geoff54 11-11-2012 08:06 PM

Re: My Escape Plan - Insights Wanted
 
Also , look into penalties for early withdrawal from your 401k. I'm not a tax expert by 10% + income tax comes to mind.

If you have someone local who can help out, look at the numbers for renting out your house - still not risk free though!!

tdw 11-11-2012 08:07 PM

Re: My Escape Plan - Insights Wanted
 
I was about to raise the same question. Ok down here getting 5% is doable on bank deposits but getting harder to achieve. In the US with interest rates much lower than in Oz I'd have thought 5% would be a fantasy unless you ran a very stocks and shares portfolio but that to me doesn't fit in with getting away from it all.

Frogwatch 11-11-2012 08:17 PM

Re: My Escape Plan - Insights Wanted
 
I don't intend to criticize here but I've been thru this too. If you feel the need to escape, you are living your life wrong. You need to be doing something about which you are passionate so it become less a matter of escape as simply needing a short change of scenary.
Unfortunately, figuring out how to make money doing what you are passionate about is difficult but attempting to find such might be less complicated than what you are planning. I found my passion by pure luck, becoming unemployed.

eric-the-red 11-11-2012 08:49 PM

Re: My Escape Plan - Insights Wanted
 
Quote:

Originally Posted by Capt.aaron (Post 946963)
If I had that financial set up no one would ever hear from me again. I've done it a long long time on not nearly a fraction of what you have. Never had insurance on my boat and only recently have health insurance, I still get my dental done in Honduras because it' cheaper than my deductable.Go for it!


That's good to hear. How much do you typically budget for a year of cruising?

eric-the-red 11-11-2012 09:06 PM

Re: My Escape Plan - Insights Wanted
 
Quote:

Originally Posted by Geoff54 (Post 947012)
Also , look into penalties for early withdrawal from your 401k. I'm not a tax expert by 10% + income tax comes to mind.

If you have someone local who can help out, look at the numbers for renting out your house - still not risk free though!!

I'm looking into rolling the 401k into an IRA, so it wouldn't be a savings account, it'd be a managed portfolio of stocks and bonds. 5% seems reasonable, and yes, i get there are risks, but long-term the stock market has always gone up. I have a money manager who would run the account, and I'm planning to meet with him to discuss rolling it over in the coming week. I get that there may be taxes and penalties. Hoping to do this over years so that I might minimize penalties as I could maybe claim hardship and my "income" is taxed at a very low rate or no rate.

In terms of "escaping" and not living my current life right...that's not really the case. I've actually got a great life, lots of friends, and a job that I enjoy. But ever since I was a wee lad, I've dreamt about sailing and exploring the world. I know there's more out there for me. And my passion for exploring and being free is much greater than my passion for work and a "regular" life. Life is short and I want to do this while I'm still physically capable and adventurous-minded enough to pull it off.

To be honest, I feel like the world has only so many "good" years left before some massive changes start coming down the pike.

And I know I only have maybe 10-20 years to do this, if I'm lucky. No disrespect to those older than that - it's awesome to be 70+ and cruising, but I'm not going to trust my dream to the dicey odds of being physically and mentally fit into my 60s and 70's.

I'll accept having less luxurious elder years with amazing memories of my 40's and 50's, rather than getting to 60 and thinking I spent 20 years in cubeland when i could have been exploring the world.

Cruiser2B 11-11-2012 09:15 PM

Re: My Escape Plan - Insights Wanted
 
Quote:

Originally Posted by eric-the-red (Post 946847)
Hello everyone, new to the forum and excited to see all the great posts and information!

So, after 9 years I've decided living 8 hours a day in a cubicle just isn't cutting it and I think I've stashed away enough money that I might be able to buy a boat, head south and self sustain for quite a while.

I want to lay out my plan and hear from those of you with actual experience living this life what I may be missing. so please feel free to give your insights on my thinking around boat, destination, route, financials, or any other areas I'm maybe missing something.

Background: single guy, 40ish, no kids, raised sailing/racing a 35 footer on Lake Erie, 7 years in the Coast Guard, lived on my 37-foot Islander in Hawaii 2 years and a 35 Cruisers power boat for 2 years in North Carolina. Currently don't have a boat and live in Pacific Northwest.

The Finances:

Since I need the prep time in a number of areas, I'm giving myself 11 months to prepare.

I'll be selling everything - house, car, motorcycles, etc and if I wait to leave after our annual bonuses in Sept, I'll have just over $300k in various accounts, including 401k.

I plan to spend about $50-60k on a boat and $25-30k outfitting it. I'm thinking I'd buy it outright to avoid need to carry insurance. Currently liking the 80's Moody 37 or 376s. Seem well-built, comfortable cruiser with decent speed/sailing manners and a solid reputation.

That'll leave me about $200k in the bank. I'm thinking at 5% returns, I'm bringing in $10k a year. While I know you can spend a fortune cruising, I'd like to stick to a $500/month living budget = $6k year. Is that realistic?

I'm also thinking about $4k/year maintenance/repair budget.

So $10k a year incoming and $10k a year in expenses and I wouldn't have to touch my principle balance. This makes me think I can be pretty self-sustaining for quite a long time without having to work. But maybe I'm deluding myself. Is this a realistic budget for a 37-foot boat?

Insurance is a major concern. I'm thinking I won't get it on the boat, and I'm not sure about getting it for myself. I'm pretty healthy and don't typically need doctors. Do most cruisers have health insurance? How does that work in Mexico/Bahamas/Caribbean? Seems like this expense alone could blow my budget. Maybe Obama care will help! Or maybe I don't get it?

Escape Plan:

Use the winter prepping myself - diesel repair, first aid, spanish, SSB and navigation classes. Plus reading books on cruising - good books I should get? Plus finding the right boat.

I'll sell the house, buy the boat and move aboard next spring.

Spend the spring and summer prepping the boat, testing and practicing and leave in late Sept/early Oct and head straight down the West Coast stopping in harbors along the way so I'm doing mostly day trips.

Probably start off with a friend helping me make the passages so I can have some extra safety margin as I acclimate to the boat and long sails. Ideally hook up and shadow some other cruisers along the way so I can learn from more experienced sailors too. Is there an annual southern migration from the PNW I could join?

Goal is to get down to Mexico by end of October and then spend the next year or so cruising the Baja Peninsula & Gulf of Cali.

Then thru the Panama Canal and cruise Caribbean for a year or so.

Then probably a major haul out and head to Europe/The Med.

So, that's the plan so far. What do you think?

I think that you have the right idea, I really don't know what cruising costs are but I am planning for it right now. I think you are setting too much aside for a boat and refitting/outfitting. Many many capable cruisers out there for much less.

Good luck on your decisions and travels!


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