Author Topic: Fanciness masquerading as need or a reasonable purchase?  (Read 5022 times)

rwheeler

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Fanciness masquerading as need or a reasonable purchase?
« on: September 16, 2013, 01:05:36 PM »
Mr Money Mustache readers,

We are looking for a mustachian viewpoint on a dilemma we have.  We are a young couple (well we consider ourselves young at 35) and recently had a gorgeous baby girl who is now 4 months old.  We live in London and have been trying to diffuse the crazy high cost of living by living on a traditional UK style narrow boat. This is basically a steel tube 60 ft long and 6 feet 10 in wide, which gives us a total internal living space of about 300 square feet.  We own the boat outright, having got a good deal two years ago, and pay for a residential mooring in London. The accommodation in the boat is functional but very basic.  We have a tiny kitchen with a gas stove and small refrigerator.  No freezer, washer or dryer or dishwasher.  Laundry is taken weekly to a local laundromat for which we pay approximately 21 GBP or 30 USD.  We have a wood burning stove that acts as our main source of heat, and a gas heater which is so inefficient that we can only use it on occasion otherwise it drains our bottled gas.  We use 'secondary double glazing film' on the windows for insulation, but overall the boat is old and not very well insulated.  Winters are cold, particularly nights, but we survive.  We are, however, a bit concerned about our daughter's comfort and ability to sleep as the temperature drops.  It is also becoming increasingly difficult to manage the space on the boat.  We have been very minimalistic with our baby gear, all of which came as gifts or second hand, but even so space is now very tight.  Not having a car we do require a good stroller/pram which does take up some room, as does some of the other baby kit.  Another real concern is that space for her to crawl in will be very limited and baby proofing is daunting with such a small space.

We are contemplating buying a new boat that would more than double our living space to approximately 700 square feet.  It would be better insulated, have a washer/dryer, and more space to expand our family (we are hoping for a second eventually).  We have a decent portfolio of investments, and are on track for early retirement in approximately 2-3 years.  We can keep a larger boat on our existing mooring (place where you park your boat) at no additional cost.  Maintenance for a new boat would be lower, and heating given better insulation should be a wash.  To purchase such a boat would cost about 60,000 GBP (90,000 USD) more than our existing boat.  This might sound like a house to those of you in low COL areas in the US but where we live it would just barely make the 20% downpayment on a 1 bedroom apartment.

We would either fund this from our existing assets or by taking a short term boat mortgage.  We would sell the boat when we reach FI and leave London, and shouldn't loose too much on it – possibly even making a modest profit by moving it to our  central London location as these are very scarce and desirable. The true cost to us then is having the 60,000 GBP in capital tied up in a non income generating asset for the next few years, plus transaction costs. It should make living in the meantime far more simple as we will have a reliable source of heat, won't constantly be re-arranging 'stuff' to make room for our daughter and won't be dragging laundry across town every week.  It would also be a much nicer living space which would hopefully add to our quality of life.   

We are torn as to whether this is major lifestyle inflation and should be avoided like a bedpan and catheter or whether this is a reasonable expense that will make the working years more live-able.  Given we are potentially so close to retirement it also feels like should we just suck it up and stick with the existing situation, but it is getting harder with baby and will be harder still with number two.

Asking regular non-mustachian people is no use because they will always just say “of course you should, duh!” along with things like “you've done ok for yourselves, you deserve it” and “how the hell have you coped so far?” So what we really need is a mustache sense check – is this a reasonable idea or just fanciness masquerading as need – in short, is it face punch time?

Lans Holman

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #1 on: September 16, 2013, 01:34:20 PM »
I'm trying to mentally set aside the sheer awesomeness of what you have done and just break this decision down to the math.  Summing up, for a 60,000 investment you can double your living space, save on maintenance and laundry, and at least break even in the long run.  And that money would only be tied up for a few years?  How about we run the numbers on the worst case scenario, no appreciation on the boat vs. healthy return if you had left it invested.  Assuming a 7% return, that works out to some 22k over 3 years.  That's about 600/mo.  Subtract savings on maintenance and laundry, call it 500.  This is just back-of-the-napkin figuring, maybe you could make it more precise.  For me as a parent, when my little boy gets a cold, that's at least two sleepless nights right there.  If I could double our living space and know that I was keeping a little one comfortable for a price like that, I suspect I'd jump at it.  I'd say your badassity is sufficiently proven to stave off too many face punches.

cynthia1848

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #2 on: September 16, 2013, 01:43:33 PM »
I say go for it - sounds like a great plan. 

Jack

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #3 on: September 16, 2013, 02:17:53 PM »
We live in London and have been trying to diffuse the crazy high cost of living by living on a traditional UK style narrow boat. This is basically a steel tube 60 ft long and 6 feet 10 in wide, which gives us a total internal living space of about 300 square feet.

300 square feet is pretty reasonable (for a boat, anyway), but the 6 foot 10 inch width would drive me crazy!

If the 700 square foot boat is at least 12 feet wide, I say go for it too -- but I'd also suggest taking a look at something in the wider but shorter range (e.g. 12 feet wide, 30 feet long) and consider whether the different arrangement of space makes a similarsize boat to what you have now work better for you.

(Assuming wider boats fit in your slip, of course).

CALL 911

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #4 on: September 16, 2013, 02:42:51 PM »
Mustasianism is about optimizing your life. The back of the napkin math quoted above may be suspect, so double check with real numbers. The first question is can you afford a bigger boat with a cushion? It sounds like it, since using existing assets is possible. What is the opportunity cost? With the above mentioned math, it's 6k/year. Would you pay 6k/yr to rent twice as much space, with a washer/dryer? Personally, in your situation, I would. But that's up to you. How many hours of work does the 6k take? 10 hours? A thousand? Is that annual time trade off worth it? Can you negotiate a lower price for the new boat? Is there an intermediate size that would solve your space issue more economically? You're the only one that can answer these questions.

Jamesqf

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #5 on: September 16, 2013, 02:44:43 PM »
If the 700 square foot boat is at least 12 feet wide...

But British narrowboats are limited to a width of about 7 ft, by the width of the canals.  The length of the locks also limits the length of a boat to around 60 ft, so there's a pretty hard limit to how much living space you can fit in one.  (I'm assuming, perhaps incorrectly, that the OP intends to keep on having a functioning narrowboat, rather than a permanently-moored houseboat.) 

You do need to remember that these were originally working cargo haulers, so that a family would live aboard even with most of the boat devoted to cargo space.

meadow lark

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #6 on: September 16, 2013, 09:14:07 PM »
Very impressed!  (I did live for 8 months in an RV with another adult, an 11 yo, and a dog.).   I say find a way to keep your baby and yourselves warm and comfortable.  It really is worth it.

madmax

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #7 on: September 16, 2013, 09:30:54 PM »
Mr Money Mustache readers,

 (we are hoping for a second eventually)


Although I couldn't personally do what you guys have done so far and also couldn't fault you for buying the boat at all, how about waiting until you have the second baby before buying the new boat?

snshijuptr

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #8 on: September 16, 2013, 09:49:26 PM »
I'm not much help in the boat department, but for small space living with a baby, skip the pram! Buy a good carrier (Ergo, Boba, wrap, mei tai, etc). It was only awkward for about 2 months right before my daughter started really walking. Now I just let her walk everywhere or put her in our bike carrier (which folds smaller than some strollers).

expatartist

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #9 on: September 17, 2013, 01:28:34 AM »
Narrowboat living! We're hoping to do that when we move to the UK late next year. Bravo to you for doing it with a baby. One boat-living mum whose blog I read swears by babywearing and has been happy to ditch the pram.

Would the new boat be a widebeam then?

Half-Borg

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #10 on: September 17, 2013, 02:10:26 AM »
If you are FI in 2-3 years anyway and plan to move, why bother with all the buying, moving, selling etc.
That's gonna take half a year anyway.

beltim

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #11 on: September 17, 2013, 02:37:52 AM »
If the 700 square foot boat is at least 12 feet wide...

But British narrowboats are limited to a width of about 7 ft, by the width of the canals.  The length of the locks also limits the length of a boat to around 60 ft, so there's a pretty hard limit to how much living space you can fit in one.  (I'm assuming, perhaps incorrectly, that the OP intends to keep on having a functioning narrowboat, rather than a permanently-moored houseboat.) 

You do need to remember that these were originally working cargo haulers, so that a family would live aboard even with most of the boat devoted to cargo space.

I had never heard of these, so this is a fascinating discussion that led to some Wikipedia research for me.  So does the fixed width and maximum length (due to lock lengths) mean the new boat is a double-decker?

gooki

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #12 on: September 17, 2013, 03:57:38 AM »
I say do it.

theSchmett

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #13 on: September 17, 2013, 05:45:52 PM »
Do it.  Got to keep the kidlets warm AND it sounds like it makes good sense from a fiscal standpoint.

Is there a rental market for 300sqft narrowboats and can you sublet (so to speak) on that half of the berth?

jawisco

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #14 on: September 17, 2013, 06:52:16 PM »
You have it figured out.  I say go for it and change course if it doesn't make sense.  You will also learn about your preferences regarding square footage and make a better housing choice after leaving London.

Doubleh

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Re: Fanciness masquerading as need or a reasonable purchase?
« Reply #15 on: September 17, 2013, 11:58:17 PM »
Thanks all for your helpful insights, it really does help to frame our thinking. I'm the husband of the OP, and as my wife suggested part of the difficulty we're having is that our "normal" ie house living friends all think we're mad and need huge living space anyway. Indeed friends with 3 bed houses regularly tell us how tough it is for them since they got a baby and how they desparately need more space, before remembering how much room we have and looking awkward! So it's hard to get a check on whether we're just getting carried away with the fanciness of a new purchase!

Jamesqf - i'm impressed by your knowledge of uk canals! You're quite right about the old timers who worked the waterways, in fact I've visited a historic working boat in the london canal museum not far from us. Living space for the whole family is 6'10 by about 8-10' with a tiny coal stove and no running water - in short those guys were way more badass than we will ever dream of being! You're right that the largest boat that will go most places in the uk is 60' by 6'10" and even then there are a couple of canals out of bounds if you're over 58' long. But the width restriction is mainly in the midlands area around Birmingham, with extensive broad canal networks in both the north and south where you can fit a boat up to about 14' wide, the restriction being that you can't move between the two without a sea passage (that most canal boats are unsuitable for) or a crane out and transfer by road which is unlikely for a few years. Once we decide to go wide then we're pretty much restricted to the southern wide canals, where a length up to 70' is possible. This would still give us scope for many weeks of continuous travel if we had the time so more than enough for the 2 weeks at a go we're limited to for the moment.

We're looking at a range of different boats varying in size from 60'x10' to 70'x12' but there is surprisingly little difference in cost for a used boat in decent nick so price is not a major differentiator. Our mooring allows us to park one boat only, so unfortunately we could split and sublet it.

Thanks for the comments also about baby wearing, we do have two carriers - a fabric sling and a high tech baby Bjorn and use both. But the longest either of us can comfortably carry baby is about an hour. This might be fine in conjunction with a car but our main form of transport is Shanks' Pony (our feet) and we will regularly walk 10+ miles a day, including hauling all groceries on which case a decent stroller makes a huge difference!

The back of the envelope math is pretty much what I had worked the cost out, albeit there is some uncertainty depending whether we get a mortgage or take more money out of my company and have to pay extra tax, which I need to figure in detail (don't worry I'm an accountant so excel is my home). What you guys have provided though is a slightly different perspective, and yes I do think it would be worth the time it will take us to earn that.

As to sticking it out that has absolutely been our plan up to now - to be honest it's not so much the idea of 2-3 years as 3-4 hard winters that is a driver to changing that plan.