Author Topic: New Hire Bought a Boat  (Read 5709 times)

wizofloz

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New Hire Bought a Boat
« on: September 20, 2014, 01:34:47 AM »
At my place of employment the probation period is one year from your date of hire. So in that time if the boss doesn't like the smell of your breath he can send you packing. After that time you receive your union 'protection', don't get me started on that scam. But for a lot of guys they get done with their associates degree, get hired on, and boom they buy insert ridiculous purchase here. Well the newest employee has set a new high mark. Tenure is at 6 months and he just dropped $72,000 on a ski boat. Or more appropriately he borrowed $72,000 to take possession of a ski boat. I couldn't believe it. I now openly ridicule his ridiculousness every time he walks in the room. Best part is we live in a state that borders Canada so it is at best a 5 months per year toy. Unreal.

LeboLebo

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Re: New Hire Bought a Boat
« Reply #1 on: September 20, 2014, 04:19:04 AM »
I'm sure busting his balls over this purchase is great fun, however you could be a great mentor if you killed him with kindness and slowly eroded away his pride, bringing him over to the mustachian way of life.

SELL THAT BOAT!

greenmimama

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Re: New Hire Bought a Boat
« Reply #2 on: September 20, 2014, 10:16:44 AM »
Ooh, a nice Mastercraft? :)

My BIL has one of those, its so fun to ski behind, but he bought it at an auction for $2500 :)

boarder42

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Re: New Hire Bought a Boat
« Reply #3 on: September 20, 2014, 06:48:15 PM »
i have a boat.  its an older wake boat but its still worth more than i have in it

Villanelle

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Re: New Hire Bought a Boat
« Reply #4 on: September 20, 2014, 06:50:17 PM »
He may be an idiot, but openly mocking a coworker is far from professional. And near to dickishness. 
« Last Edit: September 20, 2014, 08:05:59 PM by Villanelle »

missksaves

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Re: New Hire Bought a Boat
« Reply #5 on: September 20, 2014, 07:06:47 PM »
There's a big corner house on my block, which has three stories and is almost twice the size of the surrounding houses. They also have multiple cars and a speed boat parked inside an enclosed driveway. There was a stretch of time during this summer where every Sunday, I saw people sitting outside of that house holding a garage sale of all their crap. Consumerism at its best, just loads and loads of stuff and now they are owned by their possessions. I was also thinking you guys are selling the wrong things...
« Last Edit: September 20, 2014, 07:10:32 PM by missksaves »

GetItRight

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Re: New Hire Bought a Boat
« Reply #6 on: September 22, 2014, 10:56:44 AM »
If he had the cash, more power to him, but I would never borrow money for a toy and the coworker the OP speaks of is foolish for borrowing so much money for a toy when he can enjoy his hobby on the water for a fraction of that price by skiing with other people that have a boat or getting an older boat for a few grand.

I have a ski boat as I enjoy water sports. It's a luxury, but there's no reason to spend $72,000. A good ski boat can be had for much less, like remove a digit from that price, any digit. Fuel costs are minimal or free if you invite a couple friends to ski as everyone contributes gas money. I got my boat cheap (so far as these things go), and have less into my paid in cash boat+truck+motorcycle+car than most people have into a new car they replace every few years. Truck burns free fuel sometimes and motorcycle at nearly 50 MPG most of the spring/summer/fall offsets driving the truck in the colder months. My insurance cost on the whole lot of them is less than many friends pay on a single new vehicle as I can get the coverage I want/value (also classic/limited use/specialty insurance) and not what the bank dictates.

Also all my old junk has depreciated about as much as it's going to and some of it has gained value as it's all classic/collector vehicles... So while not exactly liquid so long as I have patience I'm not losing my shirt on anything should a change be necessary or prudent. I view these toys as cheap fun I can enjoy whenever I want, no expensive plane tickets, hotels, travel, meals, etc. required. Not Mustachian I'm sure but certainly not the extravagant spending way most mainstream people do vacations or similar luxury hobbies.

While I enjoy reading this forum and it has taught me a lot, I dislike the negativity and mockery (if not outright hatred) of people who have hobbies that involve burning fossil fuels and using motor vehicles. It's like some sort of environmentalist mindset which tends more toward religion than logic. Different strokes for different folks I say. It's just a different hobby and like most things in like these things can be done way more cost effectively than the average Joe Consumer does them.

Scandium

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Re: New Hire Bought a Boat
« Reply #7 on: September 22, 2014, 11:31:08 AM »
I'm sure busting his balls over this purchase is great fun, however you could be a great mentor if you killed him with kindness and slowly eroded away his pride, bringing him over to the mustachian way of life.

SELL THAT BOAT!
Nonono. I want the boat stocks in my index fund to go up. Tell him to buy another one!

Timmmy

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Re: New Hire Bought a Boat
« Reply #8 on: September 22, 2014, 11:43:09 AM »
If he had the cash, more power to him, but I would never borrow money for a toy and the coworker the OP speaks of is foolish for borrowing so much money for a toy when he can enjoy his hobby on the water for a fraction of that price by skiing with other people that have a boat or getting an older boat for a few grand.

I have a ski boat as I enjoy water sports. It's a luxury, but there's no reason to spend $72,000. A good ski boat can be had for much less, like remove a digit from that price, any digit. Fuel costs are minimal or free if you invite a couple friends to ski as everyone contributes gas money. I got my boat cheap (so far as these things go), and have less into my paid in cash boat+truck+motorcycle+car than most people have into a new car they replace every few years. Truck burns free fuel sometimes and motorcycle at nearly 50 MPG most of the spring/summer/fall offsets driving the truck in the colder months. My insurance cost on the whole lot of them is less than many friends pay on a single new vehicle as I can get the coverage I want/value (also classic/limited use/specialty insurance) and not what the bank dictates.

Also all my old junk has depreciated about as much as it's going to and some of it has gained value as it's all classic/collector vehicles... So while not exactly liquid so long as I have patience I'm not losing my shirt on anything should a change be necessary or prudent. I view these toys as cheap fun I can enjoy whenever I want, no expensive plane tickets, hotels, travel, meals, etc. required. Not Mustachian I'm sure but certainly not the extravagant spending way most mainstream people do vacations or similar luxury hobbies.

While I enjoy reading this forum and it has taught me a lot, I dislike the negativity and mockery (if not outright hatred) of people who have hobbies that involve burning fossil fuels and using motor vehicles. It's like some sort of environmentalist mindset which tends more toward religion than logic. Different strokes for different folks I say. It's just a different hobby and like most things in like these things can be done way more cost effectively than the average Joe Consumer does them.

I believe the mockery (deserved) is for borrowing 72K on a depreciating toy during a probationary period where you can be fired for any reason at all not choosing a hobby that burns fossil fuels. 

Also, I'd love to see your math on the motorcycle saving you money on gas.  As a motorcycle owner who closely tracks spending and mileage it has never been a net gain for me to own the motorcycle.  I have a decently fuel efficient bike and low insurance costs and I still can't manage a net positive effect.  Obviously I'm not against owning motorcycles, I just don't like the oft repeated gas savings that vaporizes after all costs are factored in. 

Bob W

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Re: New Hire Bought a Boat
« Reply #9 on: September 22, 2014, 12:15:11 PM »
The two happiest days of a man's life are the day he buys a boat and the day he sells it.   

Unfortunately, your coworker is probably so upside down on the boat that he will never save enough cash to pay the difference he will owe on a sale and thus not have a second happy day.  Unless, of course he trades it for a $125,000 boat, which is not uncommon. 

It will be used 7 times the first year,  5 the second and by the 4th year will be permanently parked next to his trailer.   

His 20 year (yes, they loan that long on a boat) at 16%  (yes rates are high because no one ever lasts 20 years!)  loan is probably around $1,100 per month with taxes and insurance.  Don't forget the storage or dock fees plus the gas at 2 miles per gallon.   

So I would estimate that his cost per hour of use is merely  $2,200 and his total 20 year cost will be around $240,000.  In the divorce he will likely get the boat with the entire payment.   He'll need it to sleep in.

You just can't fix stupid.

I live in a boating lake town, so I laugh my ass off a lot around here!

Funny, but I'm still seriously considering paying $2,400 for 2 used PWCs with a trailer this winter.  I figure I can use them for 100 hours each and sell them for $1,200.  That should keep my average cost around $15 per hour.   I might do better if I can get a better price just before xmas and sell em 18 months later at the beginning of spring. 

boarder42

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Re: New Hire Bought a Boat
« Reply #10 on: September 22, 2014, 12:22:54 PM »
avg cost of use of my boats is close to free ... i buy for less than value and sell in couple years after using for more than i have in them.  boats can be affordable.   i put 60-100 hours on a boat every year. 

wizofloz

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Re: New Hire Bought a Boat
« Reply #11 on: September 22, 2014, 01:02:23 PM »
Villanelle,
In my work environment, and industry in general, if you can't take a little mocking you won't last long. It may be unprofessional but that is the rule rather than the exception in my experience.

And yes, the mocking is directed at his financing such a huge depreciating purchase with no job security.

GetItRight

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Re: New Hire Bought a Boat
« Reply #12 on: September 22, 2014, 02:36:45 PM »
Also, I'd love to see your math on the motorcycle saving you money on gas.  As a motorcycle owner who closely tracks spending and mileage it has never been a net gain for me to own the motorcycle.  I have a decently fuel efficient bike and low insurance costs and I still can't manage a net positive effect.  Obviously I'm not against owning motorcycles, I just don't like the oft repeated gas savings that vaporizes after all costs are factored in.

I made a spreadsheet that compared cost per mile and savings of vehicle A vs vehicle B while still owning vehicle A. Made when I was shopping for another vehicle to figure how long an additional vehicle purchase would take to pay for itself. So essentially negative purchase price + savings per mile -insurance cost per mile for expected annual miles driven * miles. Plugging in numbers for truck at 13 MPG and bike as below, looks like the bike has paid for itself after replacing about 6220 miles in the truck. I did not include maintenance for the sake of this as I'm assuming maintenance cost per mile to be comparable per mile for any vehicle I drive. I do track that but have not put it into my quick and dirty spreadsheet as that was not within the scope of what I was trying to achieve.

These are my figures for an old Honda, a common and reliable bike
Bike: $1200
Insurance: $71/yr
MPG: 48

For someone who would own a bike regardless any miles the bike was used to replace miles in the truck would be saving $.19/mi using these numbers as it's $.07/mi for bike and $.26/mi for truck, assuming they use the same fuel. Any time I take the bike for a practical drive vs recreational is saving money... And also adding fun for a fairly low cost.

For the bike as a second vehicle with a goal of quick ROI and saving money long term, the bike absolutely does that too. At 6220 miles to ROI and after that $192 extra in your pocket every 1000 miles the bike is used instead of the truck.

If you're the type to not ride to work or other necessary driving and just lay down a couple hundred miles most weekends or ride after work... Well the bike isn't going to appreciably save money or significantly offset the fuel costs of a higher cost per mile vehicle the handful of times a year it may be used for necessary vs recreational travel. At that points it's just hobby or recreational spending and should be budgeted for as such.

If we're talking about any sort of brand new bike $15k-$30k or more and getting 30-50 MPG depending on what it is... That's as absurd as financing a brand new Prius to save on gas from not driving your brand new financed truck every day... IOW a mental justification for an extravagant luxury or status symbol that will never reach ROI and the actions show that spending less money is not an actual goal. A simple older bike at a grand up to a few grand can easily pay for itself as a second vehicle in a fairly short period of time if the intent is to save money vs driving a lower MPG vehicle and the use reflects that day in day out throughout the year.

MPG gains are diminishing returns. For a truck that gets 10 MPG, improving to 11 MPG is a significant savings. A car that gets 20 MPG, improving to 21 MPG is not too shabby. A car that gets 30+ MPG, it's pointless to even worry about MPG at that point as an additional 1 MPG is a drop in the bucket and not appreciable reducing fuel costs unless you drive a ridiculous number of miles a year. In my experience with various vehicles and running numbers over the years at various fuel costs, 20 MPG or less you can usually pay for improvements in fuel economy or reach ROI on a second vehicle in some reasonable timeframe.

20-30 MPG is a gray area where savings may or may not be significant depending on several factors. If fuel cost doubles then those ranges will shift, but fuel is historically stable in price so I see no reason to worry. For example take a 30 MPG car and figure adding an overdrive transmission at a total cost of $3000 will improve to 36 MPG, saving about $.02/mi in fuel cost. After 131,000 miles you're now saving money on that upgrade. Depending on use and total miles on the engine you may be looking at other major expenses then too, including engine/transmission freshening up. For most people you're also over a decade in the future. 30 MPG car plug the same numbers from the bike as a second vehicle example above and it's 27,000 miles to ROI which may be 5+ years in the future. My cutoff for doing something to save money with vehicles is 3 years but I prefer ROI within a year. Anything farther out is too unpredictable for me to justify the action as a money saving endeavor.

In any event, for me the numbers work

GetItRight

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Re: New Hire Bought a Boat
« Reply #13 on: September 22, 2014, 02:55:25 PM »
avg cost of use of my boats is close to free ... i buy for less than value and sell in couple years after using for more than i have in them.  boats can be affordable.   i put 60-100 hours on a boat every year.

I put similar hours on mine every year, usually close to 100. I don't pay storage or dock fees as Bob suggests all boat owners do. About $20/hr in fuel these days, I figure my actual total cost per hour over the time I've owned the boat would be around $30/hr and dropping with every hour as the price of the boat is spread over more hours and I generally pay only a small portion of the fuel costs for a day. Mind you that's cost per engine hour, not cost per hour of use. I'm happy floating on the water, eating lunch, swimming, enjoying the sights and sounds, and socializing, all for hours while the engine is off. I haven't tracked total hours in the water and in use but I'm sure that would drop the cost per hour a good amount over just using engine hours.

boarder42

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Re: New Hire Bought a Boat
« Reply #14 on: September 22, 2014, 06:11:41 PM »
i pay dock fees but the are a measley 250 bucks in my community.  bargain.  better than trailering.  i can be on the water in 20 mins from leaving my desk at work.