"Rosalie B." wrote in message
...
"Wilbur Hubbard" wrote:


"Rosalie B." wrote in message
news
Gordon wrote:


d) Why does the value of boats fall off so fast? Some new boats
seem
to loose half their value in five years.

Because people are stupid enough to buy a new boat which costs a
lot
of money. Same as with cars.

Not all boats lose that much. In 1989, an Island Packet 31
listed
at
under $78,000. Today there is a 1989 on Yacht World for $74,000 and
this
is typical for IPs. Of course if you count inflation--
Still not bad for an 18 year old boat.
Gordon

That has a lot to do with inflation. How much would 1989$$s be
worth
in current buying power? In the ten years between 1989 and 1999,
the
buying power of the dollar went down. What you could buy for $78K
in
1989 would take about $104 in 1999. That's not just a $4K loss - it
is a $30K loss

A more cogent analysis would be - how much was that boat selling for
in 1994? How much would you have had to pay for that $78K boat when
it was five years old?

Some of the older boats hold their value (discounting the cost of
inflation) pretty well, but that's an argument FOR buying an old
boat.

Another argument FOR buying and old boat is that the new boats don't
come equipped - you have spend mucho additional money to fit her out
with things like lines, fenders and the like.

AGAINST an old boat is that the equipment may be worn and outdated.


When it comes to things holding their value or increasing in value
people see what they want to see. Boats usually visibly go down in
value quite rapidly in the first couple of years. Same with cars. But
houses people claim make them money. But, people are wrong. They buy a
house for 100K and five years later they have it appraised and the
value
is now 150K so they say, "Wow I've made 50% on my investment. WRONG!
Add
in the 1) taxes 2) insurance 3) upkeep 4) utilities 5) inflation 6)
furnishings 7) mortgage interest, etc. and you've LOST money on it.
Simplistic bought for and sold for dollar values are totally
misleading.

Yes it is wrong to say that you've made 50%, but not necessarily for
all the reasons you say. Inflation actually helps you. You get to
invest your money and then inflation makes your investment worth more
- that is where the making 50% comes in.

But, as I just explained, the 50% is an illusion. . .

You have to live somewhere, and you will have a cost for it regardless
of where it is. On land, furnishings and utilities are going to be a
cost regardless of whether you rent or buy a house. So you can't
count that AGAINST house ownership.

That's where lubbers are caught in a trap of their own making. You MUST
count all expenses associated with living in a house if you are going to
claim exhorbitant profits. If you're honest with yourself, that is.

In the US, the taxes and mortgage interest can be used to reduce your
income tax, so that's kind of a wash. You have to pay one way or the
other - either more income tax or interest/real estate tax.

Another myth that about writing off taxes. You write off only a
percentage of taxes. Not the whole thing. It is NEVER a wash. It is
always to the government's advantage.

So generally speaking houses DO make money for people, which cars and
boats do not.

I disagree. It depends upon your vantage point. What if you said "screw
the landlubber lifestyle" and you saved your money and bought a nice
used sailboat in which you lived. You pay 50K for it. You pay no loan
interest, you pay no insurance, you pay no utilities, you pay no slip
fees, etc. etc. You have upkeep and registration fees which are modest.
You don't keep your boat in a marina. You sail around and anchor out.
You refuse to use fuel unless becalmed or in an emergency. Given this
scenario, you are truly making money. Like you said you have to live
somewhere. So live in your paid-for boat, take care of it so the re-sale
value stays high. All the money you save is money in the bank. Invest it
in stocks and bonds. Ten years and your double your money from people
paying YOU interest instead of the other way around.

My point is a boat is a great money-making investment. Much better than
a house on land by far, provided you use the sailboat as a home, too and
provided you use the sailboat for travel too. Don't let those lubbers
brag about their house being such a great investment because it isn't a
great investment at all. It doesn't pay it costs. A sailboat lived
aboard and sailed pays. It will make you a rich man. It's made me a
millionaire.

Wilbur Hubbard