Charlie Morgan wrote:


I've heard countless stories that are prefaced with: So we sold our
house and everything we owned to buy a boat and go cruising.

That's the poorest plan I've ever heard. For those who are math
impaired, let me simplify. NEVER sell an appreciating asset to
purchase a depreciating asset.

Excellent point!

If the percentyage of people who go cruising is tiny, then the number
who cruise for the remainder of their lives is miniscule. Keep the
house and rent it out. Hire a management company to manage it. If you
do it right, you may even have an additional income stream while
cruising. The best part is that when you are done cruising, whether in
1 week or 10 years, you aren't homeless, even though real estate
prices may have quadrupled in your absence.

A lot of people who get the cruising bug seem to
think they need a $200K+ boat to be comfortable,
when they only have $300K or less in net worth to
begin with. There was a story in the Wall Street
Journal recently about the average net worth of
people in various countries, and it pointed out
that a lot of people in the USA actually have
negative net worth--their debts exceed the value
of their assets. Many others have no significant
net assets outside the equity in their house, and
it is likely that their house will not produce
positive cash flow on the rental marketplace with
their current mortgage payment.

Let's face it. If you are going to buy a fairly
new large cruising boat and finance it, the
payments are just like house payments--AND it is a
depreciating asset. Most people cannot afford two
house payments.

On the other hand there are countless stories of
people like Fatty and Carol Goodlander who bought
a fixer-upper cheap, and then proceeded to fix it
up and sail it around the world. "Insurance?! We
only paid $6K for the boat!! Why would we pay
$1600 a year to insure it?" And believe me there
are plenty of fixer-uppers out there to choose
from--not all worth fixing up of course.

I don't know what the best answer is. Some people
we know bought a used 38' boat and moved aboard it
while they worked to pay it off. It essentially
was their house payment. When it was paid off,
they went cruising for several years.

In our case, we bought a boat we could pay cash
for and are putting our sweat into making it
"seaworthy" (crosses himself and mumbles). Of
course in the process we have learned tons of
things we'd have never known without the sweat part.

Don W.