Join Date: Jun 2011
Location: somewhere south of civilization
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Re: Buy or finance? Thinking aloud
I've always figured that if I couldn't pay cash for something, I couldn't afford it.
We owe no money to anyone, not even a cc company. Our debit card works equally well out here to purchase things or get cash.
Upon retirement I liquidated all my assets and bought an annuity so that I would have a minimum fixed income for the rest of my life. The payments go into two accounts; one for living expenses and the other is for emergencies.
With the remainder of my assets I bought this boat and paid for the upgrades I wanted to do to it.
We fell into a niche charter business, but it's much less about the income than sailing. It's so easy to fall into the 'sitting around in lovely tropical anchorages" mode down here and my wife wanted to do more sailing, so the chartering seemed a good way to do it. The charter income covers the more costly charter insurance and added wear and tear on the boat.
A lot of our friends are constantly on the edge, needing the charter income to pay their boat mortgage, which is a lot of added pressure. We can and do refuse charters we don't feel will be successful, which is a big plus in this industry. If someone's very first contact with us, through the website, is more about needing gallons of fresh milk every day (a rare item down this way) than about the sailing, we know this person would not be happy sailing with us.
If one of us should become ill and we were forced to stop chartering, we would not lose our boat (home) because of a lack of income. As mentioned above, should one be relying on their investments to support their cruising, a downturn could be disastrous.
However, unlike the OP, we have no intention of selling this vessel to purchase a house, anytime in the future. After all, a house is just a poorly built boat that won't go anywhere, and we don't want one of those!
"Any idiot can make a boat go; it takes a sailor to stop one." Spike Africa aboard the schooner Wanderer in Sausalito, Ca. 1964.
“Believe me, my young friend, there is nothing - absolutely nothing - half so much worth doing as simply messing about in boats.” ― Kenneth Grahame, The Wind in the Willows
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