How much can I reasonably spend on a boat?
I am in my early thirties and have always longed for a boat. I used to spend more time on the water when I was younger and decided I want that as part of my life again. My wife is also on board. With my TC(370k) I am comfortable paying up to $1500/month, but almost all of the boats I am looking at require 20% down for either new or used. My net worth is about 1.6M (just me, not including wife), of which about 350k is cash. I’m sure many here think saving to the grave is always the best answer, but I’d like to start enjoying my life in new ways and the PNW has so much to offer from a nautical perspective. Given my situation, how much should I put down on a boat? I feel like $50k is too much but that’s the range I need to get to to get the boat I really want. I would love to hear some financial advice or insight as to how people think about disposable income as a ratio to net worth or other rules of thumb.
Do you have enough to save for retirement? Emergencies? What do you lose if you put 50k down?
I mean that’s always the question right. if I spend 50k, I’d still have a decent bit of cash, but it does impact and delay my retirement goals as well. I’d like to retire with $5M+ by the time I’m 50.
Only you can make the opportunity cost analysis here
Do you have to own a boat. This is a liability. You need to maintain and store it. Why not just rent it when you need it? This way your cash can grow and you are not chained to liability.
This is a good question and one I have thought about a lot. I’ve decided I’d like to own for flexibility and occasional nights aboard the boat. You can still sleep up to 15 nights a month on a boat in marinas that don’t allow live aboards.
As someone whose family owned boats for decades, this is 100% true. While it's nice to have it in the summer, it's a total pain in the ass to maintain. Unless you need it professionally, you're retired, or you have fuck-you money (e.g. vacation homes throughout the world), don't do it.
How did you save this much by 30? Cashed out founder or just saving diligently?
Just timing of good paying jobs and growth in stock and housing market.
Well done
I am your age and have owned several boats. I've learned that there is one loan program that beats the pants off all the others when it comes to this. Lightstream.com The key is to have plenty of assets and good credit, which you obviously do.
Is your wife onboard with with you on the boat?
no. he still hasnt bought it, silly
3f rule my friend. If it flies, floats or fucks, dont own it, rent it
Here I was thinking I’d be the first to post that here, but you beat me to it. Well played.
I've added "drive" to this list too. I don't give a shit about cars anymore.
A good rule of thumb is the rule of 1/3s. Split your money 1/3 on living, 1/3 on savings/investments, and 1/3 having fun, traveling, capital expenditures etc. if i were in your shoes I’d be comfortable spending 50-100k down on a boat if you really enjoy it.
If you managed to save up all that money already, then you're probably pretty savvy financially. For things like boats that only depreciate over time, you should treat it like a car -- figure out the total cost to own (loan, repairs, depreciation), and how long you plan to own it. Amortize the total cost to own over the time that you'll own it, and determine if that hit to your savings rate is acceptable. Also if you can find a way to make the boat into a business capital expense, you can write off all the maintenance and capital costs.