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-   -   2.5 Years of Cruising Assets Cost (https://www.sailnet.com/forums/general-discussion-sailing-related/329442-2-5-years-cruising-assets-cost.html)

Don L 04-29-2019 10:12 AM

2.5 Years of Cruising Assets Cost
 
So I've been full time living on the boat and cruising a little more than 2.5 years. In that time I've been very weak and have regularly exceeded the monthly budget of $3k/mo I had planned on. So I wondered how this has all worked out in the big picture so I took a 2.5 year review:

- we have spent approximately $120,500 in this time, all in with no "not countings", starting Sept 16, 2016
- we started with about $475,000 in real assets like cash, 401ks, and some stocks
- the only "income" we have had in this time is about $4500/yr in a rental house the past 1.5 years
- our total asset reduction for this time period is about $10,274 and as of April 29, 2019 we still have $464,726 in same basic mix of assets
- this is the difference of our current assets of real time 401ks, stocks, cash, rental value at the purchase price

So we have cruised 31.5 months and have about $10k less than when we started.

These are the facts and are what they are. It is just something to consider if you get into some "you need $XX" financial manager BS story. Not saying I'm right or wrong in my approach, just that this is a hard $$$$ fact FOR ME. And just wait till what happens in 3 years when I start tapping into whatever is in the Social Security Fund (my money I was made to "invest") as we will be rich then.

I'm providing this info to help planners. I'm NOT interested in the peanut gallery questioning or spinning some story about my numbers, I have an MBA and understand my numbers. I haven't done anything "special" I feel and have taken a moderate to above average level of risk, which included a slam a couple of years ago that I stuck out.

So go forth and cruise before you are old. It's your money so be sure YOU get to spend some of it instead of leaving to your "heirs".

jephotog 04-29-2019 10:46 AM

Re: 2.5 Years of Cruising Assets Cost
 
I don't question your numbers at all it makes sense in the current upswing economy, with enough assets invested cruising is relatively free. I appreciate you sharing your numbers with us as it helps me plan and budget a potential cruise someday.

tempest 04-29-2019 11:14 AM

Re: 2.5 Years of Cruising Assets Cost
 
Very Nice! You sure can't take it with you! Basically, it looks like if you didn't spend your rental income you'd be even, or have grown assets.

I'm not suggesting anything, your plan is working great! You'll make that up in the 1st year of SS income and will have basically cruised for 6 years at that point for no real "net" cost.

krisscross 04-29-2019 11:42 AM

Re: 2.5 Years of Cruising Assets Cost
 
Thank you for sharing. Very useful. The $120,500 figure does not include the initial boat purchase, I presume?

Don L 04-29-2019 11:54 AM

Re: 2.5 Years of Cruising Assets Cost
 
Quote:

Originally Posted by krisscross (Post 2051599028)
Thank you for sharing. Very useful. The $120,500 figure does not include the initial boat purchase, I presume?

No and it doesn't include any money spent on it the 4-5 years prior to heading off. The addition we made to the basic boat prior to leaving was a dinghy davit and a 290W solar system (now replaced with 640W)

At the same time my asset $$$ does not include the boat at all so if we stopped cruising and sold it that money would be a windfall

Don L 04-29-2019 01:22 PM

Re: 2.5 Years of Cruising Assets Cost
 
BTW - I'm not suggesting people follow my example as all that's going to do is make them "boat people scum" like me. I feel it best for everyone (in the USA) to work till they are at least 80 and continue to invest into the Social Security Fund









I need to ensure SS continues to have payments into it

bshock 04-29-2019 02:22 PM

Re: 2.5 Years of Cruising Assets Cost
 
Thanks for sharing Don! :)

gulfsail 04-29-2019 02:43 PM

Re: 2.5 Years of Cruising Assets Cost
 
Quote:

Originally Posted by Don0190 (Post 2051599016)
So I've been full time living on the boat and cruising a little more than 2.5 years. In that time I've been very weak and have regularly exceeded the monthly budget of $3k/mo I had planned on. So I wondered how this has all worked out in the big picture so I took a 2.5 year review:

- we have spent approximately $120,500 in this time, all in with no "not countings", starting Sept 16, 2016
- we started with about $475,000 in real assets like cash, 401ks, and some stocks
- the only "income" we have had in this time is about $4500/yr in a rental house the past 1.5 years
- our total asset reduction for this time period is about $10,274 and as of April 29, 2019 we still have $464,726 in same basic mix of assets
- this is the difference of our current assets of real time 401ks, stocks, cash, rental value at the purchase price

So we have cruised 31.5 months and have about $10k less than when we started.

These are the facts and are what they are. It is just something to consider if you get into some "you need $XX" financial manager BS story. Not saying I'm right or wrong in my approach, just that this is a hard $$$$ fact FOR ME. And just wait till what happens in 3 years when I start tapping into whatever is in the Social Security Fund (my money I was made to "invest") as we will be rich then.

I'm providing this info to help planners. I'm NOT interested in the peanut gallery questioning or spinning some story about my numbers, I have an MBA and understand my numbers. I haven't done anything "special" I feel and have taken a moderate to above average level of risk, which included a slam a couple of years ago that I stuck out.

So go forth and cruise before you are old. It's your money so be sure YOU get to spend some of it instead of leaving to your "heirs".

Your information is an interesting data point.

I get that you have an MBA, but the other people here may not, and so the "asset test" presented here could potentially be misleading to some and merits some type of disclaimer. The past three years are not representative of the typical stock market, so people should be aware of that.

The cash flow and the basic principle, on the other hand, is quite interesting and of general use, and I'm in complete agreement that enjoying your savings is significantly better option than leaving a large bank account.

Well done, and thanks for sharing your data.

Scandium 04-29-2019 03:07 PM

Re: 2.5 Years of Cruising Assets Cost
 
Quote:

Originally Posted by gulfsail (Post 2051599064)
The past three years are not representative of the typical stock market, so people should be aware of that.

Not to be pedantic, but it's actually not far off. The annual returns for S&P 500 for 2016 through 2018 were 9.54%, 19.42%, and -6.24% respectively, average of 7.57% (Though not CAGR). Historic average for the S&P is 8.51% after inflation (10.7% before), pretty close.

OPs method of calculating "cost", and basically living off market returns in interesting. Though since I personally rely on those returns being reinvested when doing retirement calculations I'm not sure how comfortable I'd be with that myself. The spending would basically translate into "years delaying retirement". But if one does the math ahead of time and is ok with the trade off it's a good way to do it.

gulfsail 04-29-2019 03:17 PM

Re: 2.5 Years of Cruising Assets Cost
 
Quote:

Originally Posted by Scandium (Post 2051599072)
Not to be pedantic, but it's actually not far off. The annual returns for S&P 500 for 2016 through 2018 were 9.54%, 19.42%, and -6.24% respectively, average of 7.57% (Though not CAGR). Historic average for the S&P is 8.51% after inflation (10.7% before), pretty close.

OPs method of calculating "cost", and basically living off market returns in interesting. Though since I personally rely on those returns being reinvested when doing retirement calculations I'm not sure how comfortable I'd be with that myself. The spending would basically translate into "years delaying retirement". But if one does the math ahead of time and is ok with the trade off it's a good way to do it.

Try your analysis again, adding in the first four months of 2019 (and also adjusting for the last months of 2016 rather than using the whole year, and your numbers will be more aligned with the OPs results.

Those numbers will better illustrate the point I was making. The stock market has been great during that period.


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