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Go Back   SailNet Community > Out There > Cruising & Liveaboard Forum
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  #1  
Old 06-22-2004
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\'isper is on a distinguished road
Cruising Preparation - $$$

My wife and I have only recently made the decision that this is a lifestyle change we want to explore.

We''re sharpening up on some ASA sailing skills, refreshing Red Cross certs and she''s brushing up on her SCUBA skills, but in the swirling midst of all this preparation and day-dreaming the hard reality of "How do we pay for this?" keeps coming up.

Anyone care to share some insight on how much financial planning and time it took to get ready to sail? We are planning on using the Odysseus Method of "Selling Up and Sailing Out" to pay for the boat, the refit and stock an instant kitty but I''m having a hard time being confident that my budgets and plans are accurate.

Any advice would be appreciated.
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  #2  
Old 06-28-2004
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Cruising Preparation - $$$

Wisper, your post lacks some necessary info for us to comment helpfully. Will you be starting with a boat AND a kitty? Do you have any income sources while cruising, or will you be forced to work to cruise - a very different proposition which should instantly rivet your attention on a) what marketable skills you have in a world where many cruising destinations have many poor people and basic needs, and b) where can you work without risking being jailed, and for a decent wage (e.g. Grand Cayman is a lovely place where ex-pats successfully find jobs at good rates while living aboard...but those places aren''t easily found, which is why many end up sticking within the U.S.)

Beth Leonard''s Voyager''s Handbook does a nice job of outlining boat choices and cruising plans re: budget planning, and she talks about financial planning in a realisitc ''some day this will end; then what?'' manner that many cruising sailors would benefit by reading. Latitude 38 (free at all WM stores) often features articles on financing cruising simply because the editors realize it''s a critical topic for most of us; try to pick up and read it regularly.

And finally, post more info here so folks can chew on your circumstances a little more specifically and spew out less generic stuff (yes, I know...like I just did.)

Good luck to you, but get on your green eyeshade. One guaranteed way to find cruising offering you less than it can is when you are rubbing your last two nickles together...

Jack
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Old 07-02-2004
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\'isper is on a distinguished road
Cruising Preparation - $$$

It seems I did leave out a fair amount of detail in that last message and in truth I jotted it out fairly quickly after pouring over my budgeting spreadsheets for the 1000th time.

Yes, I will have a boat and kitty. Like I said, we will be doing the "Sell Up and Ship Out" method and I''m planning for $125000 for the boat (purchase and re-fit) and then somewhere between a $250K-$450K kitty to try and live off of and still protect enough principal to return to land-living down the road (whenver that may or may not happen).

We are both relatively young (early 30''s) so I dont want to bank on this being a completely permanent lifestyle. I can only see so much of the future...

I have nothing against working as we go, but the things I''ve read and seen on boards such as this one make it sound like such a crap shoot of hard-to-find and hard-to-keep opportunities that come with a whole host of legal/bureaucracy/tax/misc complications. So not only does it sound a little intimidating, I''m not confident in banking on this being available.

As for marketable skills, I have no idea. We are both professionals in the legal industry. I''ve been doing Technology and Project Management and she manages Human Resources. Great skills to put on a resume, but they seem to ring a little hollow on a sailboat. As for other more tangible skills? I don''t know. I have pretty high PC skills. I''ve tutored in a variety of subjects. She used to teach English in Europe. um.. She''s a certified scuba diver if that helps. I''ve always followed the same career path since I got out of high school so I''ve never had to "assess my skillset" to figure out what else I can do.

I guess what I''m asking about are the specific details that go into planning. I see everyone talking about their kitty, boat money, emergency fund, etc. Obviously this isn''t just in a savings account, or is it?

Anyone using a professional financial service? (Morgan Stanley, Charles Schwab, etc)

Has anyone done the "Sell it all and go" thing and run into something I should know about?

Also, how did you ease the transition from paychecks and mortgage payments to kittys and boat payments? As I start trying to plan the details it seems like it will take an amazing amount of coordination to get the timing right between selling house, paying off boat, quitting job(s), refitting boat, selling stuff, packing up and setting off.

I''m trying to avoid the temptation of "Whatever it takes to get on the water, just do it!" since I know I''ll come to regret that approach later. Typically, sailing and rushing to get things done don''t mix well.
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Old 07-14-2004
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Cruising Preparation - $$$

Hello,

I completed a 5 month cruise in May of this year - having left L.A. January 3rd - and sailed South to Mexico.

Forgive me if I missed something in your post - but my recommendation is to try it a little bit before jumping off into the deep end of the pool. Have you done much chartering as a proof-of-concept for yourselves?

You can buy an adequate cruising boat for under $20,000 - and you can cruise in Mexico for as little as $300-900+ per month...depending on your tastes, of course.

I bought my boat for $16,500 (a solid 1971 32 ft. Islander) - invested $9,000 in additional gear (but still did without a lot of equipment...none of the following: radar, ssb, life raft, wind vane, wind generator).

I had a very enjoyable cruise for about $900 a month (luxurious by my frugal standards).

The ASA courses were a good start - and then I added advanced coastal navigation through the Coast Guard Auxiliary - and a night course at Long Beach Community College (on Marine Diesel engines).

In outfitting my boat - I consider several of the must-have items for a safe cruise:

- reliable dinghy (especially if you are relying on it for your life raft)

- EPIRB with integrated GPS

- two VHF radios (one hand-held)

- jackline and harnesses with tethers

- 1 million candle search light

- good first aid kit (I used mine several times)

- BIG ANCHORS and ALL CHAIN (200-300'')

- Two hand-held GPS units

- PLENTY of batteries

...also, I was VERY pleased with the two 50-watt solar panels I purchased from West Marine.
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Old 07-15-2004
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Cruising Preparation - $$$

Wisper,

With the funds that you have saved, you can easily cruise for the rest of your life, or you can just as easliy spend it all in 2-3 years. Picking-up a mooring or staying at a dock every night, eating out at expensive restaurants, renting cars, etc, adds up fast.

IMO giving the money to a financial service is NOT the way to go. My wife & I had 3 rentals while we cruised. We were fortunate to find a very good property manager. The rental income keeps up with inflation and the property can appreciate if in a good area. When you return from cruising you can convert the real estate to $$$ if needed.

As you have described, the transfer from land base to boat can be overwhelming at times. We found that putting everything down in writing and giving each project a "start" & "finish by" date was helpful. Today, you are blessed with the internet and can pay most, if not all of your bills online.

good luck!!
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Old 07-20-2004
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Cruising Preparation - $$$

Ah, Grass-hoppa,

My $0.02 worth. I consider a cruising life the same as any other life concerning money. I have computerized all of our financial matters using Quicken. If your finances are computerized, you can determine instantly where your money is going, how your investments are doing, etc. With it you can prepare a budget and compare that to your investment returns.

The biggest thing is that it really doesn''t matter how much money you have coming in. The real killer is how much you''ve got going out and being able to track it. You must determine the difference between your "needs" and your "wants". You may "want" a big boat, but you may "need" a much smaller boat. "Wants" usually cost a lot more than "needs".

Your finances are going to be very similar to a person that is retired. Your investments should be in mutual funds and in bonds. Your broker can very easily liquidate your funds as required and wire money to you.

Most of the things that you want to do aren''t going to be that complicated or expensive. BUT...you must plan and have a very good handle on what you want/need to do. The advice you seek is fine, but it is usually based on the "other guys" experience. You are unique. Find the way for yourself. And good luck!

Cheers,
Steve
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Old 07-24-2004
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Cruising Preparation - $$$

I have been researching the same answers myself. You seem to be set very well financialy to get this started. To avoid stating the obvious, and my guess is you''re not exactly looking for "investment strategies" here, I''ll state what I have assimilated after tons and tons of reading.

I think you set a good $$$ amount for a safe and comfortable cruiser, obviously you can do it for more or less, but about that price range is what I''m thinking for a long distance cruiser. Insurance is a pain, if you haven''t looked at that yet, take a look at it now and get those #''s into your plan. What I call the "crusing kitty" is spending/repair/emergency money on-the-go. That kitty needs to be liquid, as in cash easy to withdraw. You''ll need to decide what you want to set for a spending budget, that will vary from tastes to the overall budget, but in many of the ''how-to'' books on crusing there are ranges they suggest for "repair" funds, and you''re emergency money. With the type of funds you are starting out with, you can easily keep 50k in cash, and decide how you want to invest the rest.

The biggest thing is you will not be able to make an semi-accurate "kitty" until you''ve actually been out there cruising. It would be better to over-estimate and have extra cash available at the end of a year, than needing to sell some time sensitve investment early, or having to sell some other at a loss because you''re boat just got robbed or hit by lightning and you have lots to replace.

Just from reading what you have to start with, I know you can pull it off as soon as you are ready to cut the lines to you''re land based life, many many many people have done it with wayyyy lesssss. My biggest suggestion is over-spend when it comes to "Safety", over estimate with you''re "Kitty", and do it! Place what you have left over in what investments you feel comfortable with, but the last thing I''ll be doing at sea is worrying about Stock Prices. People have different ways of making money while out on the water, sometimes they make money off of other cruisers with boat/sail repair skills, ects. You can use you''re professional back ground in larger city destinations, but aren''t you trying to get away from there like me?

Well, Good Luck and let the good advice keep flowing!
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Old 08-03-2004
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Wisper, because your budget is so initially comfortable, IMO your best initial plan is to begin cruising, choose a route that interests you and time period that seems reasonable to commit to, enjoy not being in a hurry while having the time to modify the boat as you learn what doesn''t work, and most relevant to your question, determine what for you is a suitable if careful annual budget.

It may seem anal to some (it surely would have to me some years ago) but for the last 4 years we have tracked every cent/ore/centavo we''ve spent, by category, summarized it monthly to measure against the annual budget, and then fold that into a longer term cash flow spreadsheet. Once we got into the routine, it''s easy and not inconvenient. We''ve learned a lot, and rearranged our overall budget in many respects after doing this, then adjusted it yet again when the cruising venue changed significantly (from Caribbean to Europe). That would probably be a good exercise for you, as well.

Most importantly, I''d encourage you to get a copy of Beth Leonard''s Voyager''s Handbook. Beth was a consultant and systems analyst (my guess, anyway) in a former life, and has done IMO an excellent job of introducing the whole issue of financial planning as it relates to boat choice, cruising budgets and, ultimately, re-entry planning. She too was a 30 something cruiser of long experience when she wrote Handbook (she''s now revising/updating it), and you sound like an ideal beneficiary of her book. Please pay special attention to the 3 types of boats she uses as illustrations and how they impact *everything* about the resultant cruising lifestyle, financially speaking.

Good luck!

Jack
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