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Old 01-20-2020, 03:08 PM   #41
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Yeah I went through the same exercise with a plane. The issue seems to be the ability to rent exactly the plane/boat you want. For the plane I want to back country fly in ID. A 182 can work for that but most rentals will limit off airport landings.
Plus they charge you a minimum per day (loss revenue). So using the plane for a cross country trip gets expensive. I disagree with the 3 Fs saying, if you are going to buy, then use it, if you dont use it, sell it.
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Old 01-20-2020, 03:36 PM   #42
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I have just retired (54) and am spending 51% of my time in Florida. I am thinking about getting a boat (stinkpot) to run around in with the family. Does anybody have a point of view about what % of your Net Worth you use to calculate how much you will spend on a "toy"...

PS Interesting article I just found for cars https://www.financialsamurai.com/net...ing-guideline/
That financial samurai guy said 5% of networth is reasonable for a car. Heck, I paid that much for a car back in my 30s when I did not have the money I do now. At this point, I still buy the same type of car I did back then. I do not desire any 6-figure car now.

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A boat is negative net worth. If you spend 1% on a boat, it takes 2% off your net worth until you sell it.
Most people can get only a bitty boat with 1% of their networth. But for one that's only 1% of NW, you don't have to think too hard.

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Originally Posted by sterlingmossy View Post
True. Was thinking about a used Boston Whaler 270 or 320 Vantage.
I don't know anything about boats, but look on the Web out of curiosity. A used one will run $50K and up. It's more than I thought for a used boat of this size, but then I don't know anything. In any case, it's about the same as a nice car, and people buy cars in this price range all the time.

I'll say that if you have the money, go for it. As an earlier poster said, the longer you wait, the less time you have to enjoy it in good health.
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Old 01-20-2020, 06:39 PM   #43
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Not a boat, but I have maybe 3% of my NW "tied up" in 3 vintage cars that I own. All 3 are desirable in the right markets and would probably sell in hours for the values that I am thinking about.

I tell my friends that I can't drive my mutual funds around on a sunny day with the top down....
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Old 01-20-2020, 07:20 PM   #44
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We have about 2% of our net worth in our sailboat. It is a 1988 Pacific Seacraft 34 that we bought in 2004 and have taken from North Carolina to the Bahamas twelve times so far. Click on my name, profile, and about me, and your will find a link to my wife's blog. Along with pictures you can get some idea of what we do.

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Old 01-20-2020, 07:34 PM   #45
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If it isn't going to make or break you, I would buy it and enjoy it, and have fun. One way to look at it is you know your WR and if maxed at 4% then budget it for the X number of years. If your not using all the 4% then use the remainder and budget what is over for the X year of years.
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Old 01-21-2020, 05:43 AM   #46
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My boat is a sort of refuge, I don't need to have some people with me to have fun or entertain. I would prefer if you didn't join me. Out on the rivers and sloughs of the delta there is peace and nature and fish. Don't care if I catch anything but when I do supper will be especially fine.

Especially during the week when the crazed water skiers and the bass tournament guys are working. All alone just me and the river and the cry of the Hawks.
Thanks for reminding me what I liked about boating...the quiet Tuesday mornings on small inland lakes, with a line in the water, watching an eagle swoop down for a fish, or spying a few deer taking a sip of water, and no jet skis making constant noise.
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Old 01-21-2020, 07:51 AM   #47
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My wife and I have a dream if buying a Class A motorhome when we retire and full time in it for a while. In fact were seriously considering buying a Class B camper van in the immediate future to be able to part time in it for some road trips.

We will be having the same consideration regarding how much as a percentage of net worth would be reasonable to buy the RV which similar to a boat is a depreciating large ticket item with upkeep costs. Well probably sell our home which will help free up additional money but eventually we will need a place to buy again.

Im not sure what percentage well feel comfortable spending when the time comes. The good news is that we can plan for this and I will run our retire numbers based on whats left after buying the RV. Plus, if we end up spending the money on the Class B now well at least have something to trade in possibly.

Like the boat purchase buying an RV comes down to how much you think youll use it verses the opportunity cost. Im hoping we wont go over say 5% of whatever our net worth is at the time to buy the RV. We can also push retirement out a little further than the earliest possible point to allow for extra funds to cover this major cost.

Good luck. I dont think there is a rule of thumb. Be sure buying the boat will not put you in a financial hardship. If all else fails you could sell it after owning it for a while. At least you will have that time to enjoy it.
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Old 01-21-2020, 08:09 AM   #48
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^^^I think buying a used RV, or boat will eliminate some of the HUGE depreciation that is experienced on both when bought brand new. I am certainly glad that folks are still buying $90,000 boats, and RVs, but 1/3 of that cost will buy you a really nice 5 year old unit.....let someone else take the initial hit !
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Old 01-21-2020, 08:10 AM   #49
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As a former boat owner, 25 years, there is no right answer. If you really plan to use it often, we used ours 1-2 times a week May thru Oct all the years we were owners, you can justify spending a good chunk (5%?) - though % of net worth isn’t germane IMO. But if you don’t know or won’t use it often, you shouldn’t own a boat at all - rent, join a boat club, or make friends with boat owners.

The reason? Beyond purchase $, costs of ownership are much higher than some first time buyers realize. Insurance, fuel, slip/mooring costs, haulout and launch, club/org memberships, maintenance and periodic replacements, etc.

I spent $8K/yr owning a 30 foot sailboat NOT including purchase payments (paid cash). The years I raced the boat it cost $15K/yr. Resale on sailboats can be decent (less so on powerboats), so you get a good chunk back. It’s the year in year out running costs that really make boat ownership expensive, and you don’t get ANY of that back.

Years ago a friend with a 35 foot SeaRay power boat they used once a week, was out on the boat with his wife one day - and came to the realization each outing was costing them $500/outing. He asked his wife if she thought it was worth that, or were there better ways to spend $500/week? They sold the boat after that season and never looked back. And those costs were more than 20 years ago...
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Old 01-21-2020, 08:41 AM   #50
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I just see things as - if I need X in investments to support my retirement withdrawals, and I have X+Y, then I can tap into Y for toys or other spending if I like without endangering my retirement.
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Old 01-21-2020, 08:49 AM   #51
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I just see things as - if I need X in investments to support my retirement withdrawals, and I have X+Y, then I can tap into Y for toys or other spending if I like without endangering my retirement.
+1

That's exactly how I saw it when we purchased a Class A motorhome the year after we retired. I never thought of it in terms of what % of our net worth we spent on it, but looking back it turns out it was around 5%.
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Old 01-21-2020, 09:07 AM   #52
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I don't think I could bring myself to spend 5% of our net worth on any one thing.
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Old 01-21-2020, 09:12 AM   #53
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Agreed. I doubt I could bring myself to spend 5% of your net worth on any one thing either.
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Old 01-21-2020, 09:17 AM   #54
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I don't think I could bring myself to spend 5% of our net worth on any one thing.
With a boat, you can get a big chunk back on resale FWIW, but I dont disagree. We were boating fanatics and our last boat was much less than 5% of NW.
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Old 01-24-2020, 06:04 PM   #55
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I grew up around river/lake boats that we kept pulled up in the beach in the summer and moved into the cottage garage over the winter. They were used for years maybe decades, and waterfront property without a boat is a sin.

Down here in Florida is an entire different story. My friend with a boat pays for racking, which is a whole different thing. Even if you go out every week, and if you include depreciation on a used boat, it’s hundreds of dollars a trip.

A used boat on a trailer that fits in your garage is a different matter.

Renting is a fraction, and friends can split the cost. You can set off from different locations.

Other friends that are full timers like the boat club. There is an initiation fee

There are apps now to rent from owners like how Turo
works
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Old 01-24-2020, 09:25 PM   #56
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First get a firm grasp of the description "A boat is a hole in the water into which you pour money". Then determine what the yearly expenses would be on a boat the size you want: insurance, maintenance, docking fees, fuel costs (assume fuel goes up at least 10%/year), cost of replacing equipment (generator, VHF radio, compass, GPS, fridge, etc).

Divide that by the number of hours you would actually USE the boat (probably less than half of what you're thinking). Then decide if the pleasure of the boat is worth that many $$$/hour.

Typically, the two happiest days in a boat owner's life are the day he buys the boat and the day he sells it.
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Old 01-24-2020, 10:02 PM   #57
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A boat owner is guaranteed at least two happy days...the day he buys it, and the day he sells it...according to a friend of mine who owns one.

DW wanted to get a PWC. I thought I’d love to have one as well, but, I know we might get just one or two uses out of it per year. DW and I discussed it and decided we’d rent one whenever we got the itch to go for a ride. Venture a guess how many times we’ve actually done that?

Zero...just not as interested as we thought.
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Old 01-25-2020, 01:34 AM   #58
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I just see things as - if I need X in investments to support my retirement withdrawals, and I have X+Y, then I can tap into Y for toys or other spending if I like without endangering my retirement.
Hmmm....

My WR for last year was 1.5%. Using the above logic, I can spend down my stash so that the same amount of expenses becomes 4% of the remaining money. Lemme do a bit of calculations here.

It turns out that I can spend 62.5% of my investable accounts, and live on 4% of the remaining 37.5%.

Wow! I can buy something really big and expensive. That's a lot more than 2x the current values of my homes together.

But here's a problem. Something that big will take a lot for upkeep and maintenance. I will have new expenses, and my WR will be a lot higher than the targeted 4% of remaining funds.

Even as a thought experiment, it brings some complications.
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Old 01-25-2020, 07:45 AM   #59
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My wife and I have a dream if buying a Class A motorhome when we retire and full time in it for a while. In fact were seriously considering buying a Class B camper van in the immediate future to be able to part time in it for some road trips.

We will be having the same consideration regarding how much as a percentage of net worth would be reasonable to buy the RV which similar to a boat is a depreciating large ticket item with upkeep costs. Well probably sell our home which will help free up additional money but eventually we will need a place to buy again.

Im not sure what percentage well feel comfortable spending when the time comes. The good news is that we can plan for this and I will run our retire numbers based on whats left after buying the RV. Plus, if we end up spending the money on the Class B now well at least have something to trade in possibly.

Like the boat purchase buying an RV comes down to how much you think youll use it verses the opportunity cost. Im hoping we wont go over say 5% of whatever our net worth is at the time to buy the RV. We can also push retirement out a little further than the earliest possible point to allow for extra funds to cover this major cost.

Good luck. I dont think there is a rule of thumb. Be sure buying the boat will not put you in a financial hardship. If all else fails you could sell it after owning it for a while. At least you will have that time to enjoy it.
We had ample funds. We bought a nice motorhome. We lived in it and travelled for 5 years. We sold the house and put that money aside towards the next house. That was in early 2005. The funds we pulled from our retirement investments had already recovered a few months later making our heads spin.

Of course it doesnt always work out that way.
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Old 01-25-2020, 08:45 AM   #60
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if it flies or floats, don't buy it
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