Case Study – We want to live on a sailboat

[Stashy McStasherton]

Life Situation: My husband (age 34) and I (age 34) are selling our house and moving in with my mother-in-law. We hope to save enough money in 2-5 years to buy a sailboat and sail to the Caribbean. We will come back up north during hurricane season and work if we have to.

NET Salary/Wages:
Me (self employed massage therapist): $38,000 per year
Husband (UPS delivery driver): $65,000 per year

Pre-tax deductions: 401k (husband) current balance $70,000
He currently puts 20% of his weekly income towards his 401k. There is no match.

Monthly expenses after we sell the house and before we live on the boat:
Rent to MIL - $500
Groceries/ Eating out - $550
Health Insurance - $48
Vacations: $150
Gifts: $50
Republic wireless - $63ish (we pay for my MIL’s phone too)
Car insurance - $75 (we will shop around once we get rid of the homeowners insurance and the cars are paid off- hopefully this number will drop)
Gas - $160 (It was a trade off for the cheap rent. We will be further from work.)

Expected ER expenses:
We hope to live on $12,000 per year after the purchase of our boat.
The estimated cost for the boat will be $100,000. That includes any repairs and upgrades to make her seaworthy. This is a very high estimate. We are hoping to do it for more in the $75,000 range, but I would rather plan for the worst.

Assets: Roth IRA (mine) - $4,000
I plan on maxing this out every year after we sell our house.
I have been in the process of slaying student loan debt until now. (paid off $55,000!)

Liabilities:
2009 Honda Fit -  $6,961.45 2.99% $250/month
2007 Toyota Tacoma -  $5,339.51 1.99% $150/month
House - $124,000 left on mortgage 4.25%
With taxes and PMI (D’oh!) we pay $1300/ month – keep in mind we are selling this. We hope to sell it for between $160,000-$170,000 which would allow us to pay off the cars and have money left over.

Pension: Not sure what is going on with it. My husband’s union is claiming that they will run out money in a few years in the pension fund. I am not counting on this money at any point. If he gets a pension, it will be a bonus. When he leaves the company, he is going to have 12-15 years in.

Specific Question(s): After we sell our house, we hope to have $26,000-$36,000 left over to eliminate the car debt and have extra to save. We need to save $100,000 for the boat purchase and then additional money to live on. Keep in mind, we plan on working for a few months each year if we need to.
-Do we need to continue to contribute to my husband’s 401k? If so, how much should we put into it?
-Where do we put our money as we save? We will need $100,000 available to purchase the boat in about 2 years. Should we invest the leftover? How do we make the most of what we have without time to wait around for compounding interest?
-Any ideas for internet while on the high seas?
-Any ideas for gardening while on a boat?
 
Any other ideas you lovely, intelligent people have to offer, I will gladly take!

Thank you!

[Cromacster]

Wife and I are also considering this.  We need to learn how to sail first, which we are starting this spring :)

I think 12,000 is a reasonable amount when considering living costs.  Even less is possible, as shown here there is 2,000 posts discussing living on <500 a month.

Cruising on 500 per month

What most cruisers will agree with is that these figures do not cover health insurance, boat insurance, and maintenance.

These will easily push your yearly costs beyond 12,000.  Health insurance can easily run, 3600 a year and boat insurance is also about 3k-4k depending on the boat.  Also, many boat insurance policies won't let you be in the "box" during hurricane season, although it doesn't sound like you plan to be.  Boat insurance is optional, but if you are sinking such a significant portion of your networth into a boat and your home, it might be a good idea.  Similar to houses most people suggest expecting 5%-15% of the boat value in repairs every year.  It's going to vary, but as they say in the boat world, break out another thousand.

Honestly, your time frame seems really short to me for you to comfortably do this even with part time work.  Almost your entire networth will be in the boat which doesn't allow much room for big emergencies.

How long are you planning to sail?
Are you going to continue working your full time jobs while you live on the boat for a few years?

Edit to Add:  I don't mean to come off so negatively, as I fully support this idea.  The things I brought are just things I have found out doing research for myself.  The cruising life is an awesome one.

[mskyle]

Oh my goodness, are you my friends R & S posting this from 15 years ago? Because your plan is exactly the same, except for the jobs, and I think they lived with her father rather than his mother. Anyway, they did live on the boat for a couple of years, but it worked out to be much more expensive than they thought it would be.

I'm worried that you may find living on $12K a year more difficult than you expect. Where are you going to moor, and how much will that cost? What are you going to eat? How are you going to cook your food (i.e. there *will* be fuel costs, even if you mostly sail)? The boat *will* require repairs, even after you purchase it. If you're coming home for hurricane season, you either have an expensive trip up the coast or you have to pay for someone to store your boat (someplace safe from hurricanes) and for a flight home. None of these are super expensive, but they add up fast when you're looking at budgeting just $500 per person per month.

Also, how long do you plan to do this? It's a nice life, but it's not, like, EASY.

Just make sure you are talking to actual humans who are living on boats in the Caribbean and ask to see a breakdown of their budget (their WHOLE budget) and really listen and ask the hard questions.

[fa]

Read this book: http://www.amazon.com/Buy-Outfit-Sail-Inexpensively-Safely/dp/1456310038/ref=sr_1_2?ie=UTF8&qid=1458912313&sr=8-2&keywords=goodlander

It pretty much tells you all you need to know.  This couple has cruised for decades, but they don't sugarcoat the challenges.  Goodlander was (or is?) the editor of the Cruising World Magazine.  The book details how to cruise if you have more time than money, because you will need lots of one or the other.

Happy sailings.  I hope you post as you go along.

[Stashy McStasherton]

Wife and I are also considering this.  We need to learn how to sail first, which we are starting this spring :)
Good luck! We can hang out!

I think 12,000 is a reasonable amount when considering living costs.  Even less is possible, as shown here there is 2,000 posts discussing living on <500 a month. Thank you!

Cruising on 500 per month

What most cruisers will agree with is that these figures do not cover health insurance, boat insurance, and maintenance.

These will easily push your yearly costs beyond 12,000.  Health insurance can easily run, 3600 a year and boat insurance is also about 3k-4k depending on the boat.  Also, many boat insurance policies won't let you be in the "box" during hurricane season, although it doesn't sound like you plan to be.  Boat insurance is optional, but if you are sinking such a significant portion of your networth into a boat and your home, it might be a good idea.  Similar to houses most people suggest expecting 5%-15% of the boat value in repairs every year.  It's going to vary, but as they say in the boat world, break out another thousand.

Honestly, your time frame seems really short to me for you to comfortably do this even with part time work.  Almost your entire networth will be in the boat which doesn't allow much room for big emergencies.

You are very right, as are the other posters. $12,000/ year is very ambitious. Maybe I should jump my number up to $20,000/year. That way we can get health insurance and fix anything that breaks on the boat- which will definitely happen. Boat insurance too.

How long are you planning to sail? Until we get sick of it!
Are you going to continue working your full time jobs while you live on the boat for a few years? Nah. We cannot work at either of our jobs while on the boat. I would love to continue to massage and teach yoga, but I can't count on a customer base while traveling. We have considered blogging, making videos, air bnb, but do not want to count on it.

Edit to Add:  I don't mean to come off so negatively, as I fully support this idea.  The things I brought are just things I have found out doing research for myself.  The cruising life is an awesome one. No worries! You did not come off as negative at all. I fully realize this is a very ambitious goal. We just want to get out on the water. So. Bad.

I appreciate your candor. We are in the very beginning stages of planning. We will make tweaks as we go.

[Stashy McStasherton]

Oh my goodness, are you my friends R & S posting this from 15 years ago? Because your plan is exactly the same, except for the jobs, and I think they lived with her father rather than his mother. Anyway, they did live on the boat for a couple of years, but it worked out to be much more expensive than they thought it would be.

I'm worried that you may find living on $12K a year more difficult than you expect. Where are you going to moor, and how much will that cost? What are you going to eat? How are you going to cook your food (i.e. there *will* be fuel costs, even if you mostly sail)? The boat *will* require repairs, even after you purchase it. If you're coming home for hurricane season, you either have an expensive trip up the coast or you have to pay for someone to store your boat (someplace safe from hurricanes) and for a flight home. None of these are super expensive, but they add up fast when you're looking at budgeting just $500 per person per month. The reason the boat and outfitting of it is so expensive is because we want to be as self sustaining as possible with wind and solar power. Sails for all types of wind (especially light winds, so we don't need to use the motor/ diesel). We hope to make wise decisions when grocery shopping on land. My hubs is an awesome fisherman, so we hope to eat as much from the sea as we can. We will not pay for a mooring or a dock unless we absolutely have to. There are plenty of options for free anchorages. Lots of people we have researched avoid these fees altogether. We can bring the boat back up the coast and keep it in Lake Champlain or on the Hudson. There will be cost involved here.

Also, how long do you plan to do this? It's a nice life, but it's not, like, EASY.

Just make sure you are talking to actual humans who are living on boats in the Caribbean and ask to see a breakdown of their budget (their WHOLE budget) and really listen and ask the hard questions.

Thanks for the advice! We have lots to consider and think about!

[Cromacster]

Good luck! We can hang out!

Definitely!  Our current timeline is somewhere between 5-7 years.  Much to learn before then!

I would love to continue to massage and teach yoga, but I can't count on a customer base while traveling.

I wouldn't count these skills out.  Plenty of travelers love those two things, but there would be local competition.  Granted, it would only be reliable income if you are staying in one spot in US territories (USVI, PR), but not impossible in others.  If you developed a yoga based sailing blog/vlog and developed enough of a following, I bet people would seek you out and pay for yoga classes while on vacation.

We just want to get out on the water. So. Bad.

Haha I understand.  I check yachtworld way to often for my own good.

What blogs/vlogs have you been following?
My favorite at the moment are

White Spot Pirates

and

Monday Never (Which is really the best name for anything regarding FIRE)

I also enjoy the Sail Loot Podcast which discusses earning money while cruising.

[Stashy McStasherton]

Do you have experience cruising? What made you think of this?
My husband has been sailing since his days at boy scout camp. We have been sailing together for the last 3 years. We adopted the Mustachian lifestyle 18 months ago. The two ideas of sailing and Mustachianism blended together very naturally over the past 6 months or so.

Ok so, I am not a sailor but am just trying to give this a critical eye. If any of my assumptions are wrong let me know.

Given your listed expenses you're likely going to be able to put away 40-50k per year above and beyond your 401k and Roth. That means anywhere from 80k to 250k in money saved. Let's assume high end.

That leaves you with a boat and 150k after 5 years, or $6,000 per year in passive income.  You might have a bit more after the sale of your car and his 401k growth (though that money would be 5 years out from being accessible).  I just don't know how feasible this is without increasing your income. So let's say we end up with $6,000 in passive income every year. We would have to make $14,000 per year to reach my new goal of living off of $20,000 per year (see above). We will have 5 months to make $14,000. We can make $700 per week between the two of us during hurricane season. Totally do-able. Full financial independence would be great, but we want to get on the water!

We hope to live on $12,000 per year after the purchase of our boat
Where did this number come from? Is it realistic? Below* is a site that says to expect 3-5k per year in service and repairs. That eats up a huge chunk of your budget right there. Then you have marina/docking fees and storage fees if you're working up north.
We have done lots of research. This is totally do-able. A little buffer would be nice though. See above that I have changed the projections to need $20,000 per year.

We will come back up north during hurricane season and work if we have to.
For planning, make sure you count on earning (Yearly Budget - $6,000 + $5,000) above and beyond your living costs wherever you're working.

Where do we put our money as we save? We will need $100,000 available to purchase the boat in about 2 years
Depends on your timeframe. If you're looking at taking off in 2 years there aren't many places I'd put it. Nothing that will earn you above inflation, most likely. However, when you can buy the boat doesn't matter. When you will buy the boat does. Buying the boat should be one of the last things you do. (i.e. year 4.5 if you take all 5 years).
Yes.

Any ideas for internet while on the high seas?
Sim cards from different countries? Probably not going to get much on the seas but probably possible while docked in different countries. I'd also explore marinas that have a wifi signal and save the $$.

Any ideas for gardening while on a boat?
Again, not a sailor but you'll have a water maker on the boat. Not sure what type of volume you can expect but I suppose if you had potted plants/vegetables it would work.


Some of this may sound harsh but it seems like a stretch to make this feasible, IMO. It's great when people follow their dreams but I'd rather you be realistic up front than jump right into your dream thinking it will last forever only to have to get off the water earlier than you want because you're out of money.


I would go read www.bumfuzzle.com and contact the authors. NOT for ideas on how to copy them - they came into this with a lot of cash. But they can probably answer a lot of specific questions about day to day life on the boat.


*http://www.allatsea.net/true-costs-owning-catamaran/

Thank you!

[MandalayVA]

How is your husband not getting a match in his 401(k)?  I also work for UPS and while it's not a huge match (3%) there is a match.  And I don't even work for the division with the little brown trucks.  :D

[Stashy McStasherton]

I would love to continue to massage and teach yoga, but I can't count on a customer base while traveling.

I wouldn't count these skills out.  Plenty of travelers love those two things, but there would be local competition.  Granted, it would only be reliable income if you are staying in one spot in US territories (USVI, PR), but not impossible in others.  If you developed a yoga based sailing blog/vlog and developed enough of a following, I bet people would seek you out and pay for yoga classes while on vacation.

I can't tell you how happy I would be if I could make some extra money massaging and yoga-ing. I love both so much. Besides, I don't want my massage skills to wain while we are out for 7 months. The more money we make while we are on the water, the less we have to worry about making while hiding from the hurricanes.

What blogs/vlogs have you been following?
My favorite at the moment are

White Spot Pirates

and

Monday Never (Which is really the best name for anything regarding FIRE)

I also enjoy the Sail Loot Podcast which discusses earning money while cruising.
[/quote]

We also love Monday Never and Sail Loot.
Check out:
http://thesailingpodcast.com/ - excellent podcast about the cruising life. Has lots of information on sailing budgets.
https://www.youtube.com/user/WickedSaltySailors - a young couple and their little dog sailing in the Caribbean. Spoiler alert- they had to stop because they ran out of money.
http://www.landlpardey.com/ - She has been sailing since the 60s and has written books about sailing on the cheap. She has great stories.

[Stashy McStasherton]

How is your husband not getting a match in his 401(k)?  I also work for UPS and while it's not a huge match (3%) there is a match.  And I don't even work for the division with the little brown trucks.  :D

I don't know. UPS is so weird. I think it depends on the union and the center you work out of. The center that my husband works out of was in the national news last peak season due to the train wreck they are. 3% would be amazing! Ugh.

[Cromacster]

We also love Monday Never and Sail Loot.
Check out:
http://thesailingpodcast.com/ - excellent podcast about the cruising life. Has lots of information on sailing budgets.
https://www.youtube.com/user/WickedSaltySailors - a young couple and their little dog sailing in the Caribbean. Spoiler alert- they had to stop because they ran out of money.
http://www.landlpardey.com/ - She has been sailing since the 60s and has written books about sailing on the cheap. She has great stories.

Thanks for the recomendations, I'll check those out. 

I have watched a few of the Wicked Salty videos, but I couldn't stand the guy so I didn't continue.  I'm surprised they ran out of money, near the end they were earning $800+ per video they posted on their Patreon.

[Stashy McStasherton]

We also love Monday Never and Sail Loot.
Check out:
http://thesailingpodcast.com/ - excellent podcast about the cruising life. Has lots of information on sailing budgets.
https://www.youtube.com/user/WickedSaltySailors - a young couple and their little dog sailing in the Caribbean. Spoiler alert- they had to stop because they ran out of money.
http://www.landlpardey.com/ - She has been sailing since the 60s and has written books about sailing on the cheap. She has great stories.

Thanks for the recomendations, I'll check those out. 

I have watched a few of the Wicked Salty videos, but I couldn't stand the guy so I didn't continue.  I'm surprised they ran out of money, near the end they were earning $800+ per video they posted on their Patreon.

What?! I love Wes! How did you find out they were making $800+ per video? If I could do that, we wouldn't have to worry about money. From what I have read about making videos and having a blog, it seemed like it was not something to be counted on. Maybe it is more lucrative than I thought.

[Stashy McStasherton]

@Stashy - Saw your reply. Good to be flexible. I would say to just spend a lot of time really researching this budget, as we've almost doubled it in about 15 minutes worth of posting. At that rate, think how high it will be in five years! ;)

Also, should go without saying but your $700/week you guys make will have be above and beyond your living expenses. Definitely doable, especially for someone with a mustachian attitude, but you'll need $700/week + rent (probably month to month), storage fees for your boat, groceries, etc. Unless the 20k includes that rent, in which case just see my first paragraph.

Best of luck.

Yes, the 20k would include expenses for the whole year. We can totally do it!

Just keep in mind, the reason I posted a case study was to get feedback from you fine people. If I knew it was a perfect plan, I would not have asked for the advice. I think 20k is going to be the budget to strive for an will leave plenty of wiggle room. 12k- no wiggle room.

[Cromacster]

We also love Monday Never and Sail Loot.
Check out:
http://thesailingpodcast.com/ - excellent podcast about the cruising life. Has lots of information on sailing budgets.
https://www.youtube.com/user/WickedSaltySailors - a young couple and their little dog sailing in the Caribbean. Spoiler alert- they had to stop because they ran out of money.
http://www.landlpardey.com/ - She has been sailing since the 60s and has written books about sailing on the cheap. She has great stories.

Thanks for the recomendations, I'll check those out. 

I have watched a few of the Wicked Salty videos, but I couldn't stand the guy so I didn't continue.  I'm surprised they ran out of money, near the end they were earning $800+ per video they posted on their Patreon.

What?! I love Wes! How did you find out they were making $800+ per video? If I could do that, we wouldn't have to worry about money. From what I have read about making videos and having a blog, it seemed like it was not something to be counted on. Maybe it is more lucrative than I thought.

Haha I gave him the benefit of the doubt for 5 episodes, my wife gave up after one video.

Many of the sailing vlogs utilize Patreon, which is a type of crowd funding mostly targeted to artsy types.  People either pledge an amount per creation (in this case per video) or a monthly contribution.  Like anything it's hard to actually make money doing this, but there are some exceptions.  The Patreon website tells you how much the creator is making.  I dislike the way some people try to market themselves on Patreon (excessive asking for support, shoutouts, etc), but the ones who just post a link at the end of their videos are fine by me.  The best Patreon model in my opinion is White Spot Pirates.  She posts a link at the end of her videos, doesn't do any other advertising.  She does create some exclusive content for contributors and also does Q&A with patrons.

SV Delos and La Vagabonde are two of the most succesful sailing vlogs I've come across.  They each earn $5,000+ per video from Patreon.  They produce some nice videos, but are more focused on pretty places and pretty people rather than the down and dirty of sailing.

[MandalayVA]

How is your husband not getting a match in his 401(k)?  I also work for UPS and while it's not a huge match (3%) there is a match.  And I don't even work for the division with the little brown trucks.  :D

I don't know. UPS is so weird. I think it depends on the union and the center you work out of. The center that my husband works out of was in the national news last peak season due to the train wreck they are. 3% would be amazing! Ugh.

Oh, I forgot the union, my bad.  Since my company was acquired by UPS the general office where I work avoided the Teamsters, but the service centers for the most part weren't.  And yes, UPS is VERY weird.  Still, you'd think the union would have a match.

[bobechs]

I won't comment on finances, which is what you asked about, other than to observe that you are planning a shoestring budget and I've got my doubts...

My real reservations are that I suspect you have no idea what sea life will really be like and very likely will come to dislike it, or just wear out.  The low budget will only make that worse and bring it on sooner.

The fact that you ask about internet access at sea and growing a garden on a cruising sailboat suggest to me you are acting from a profound ignorance.

Trying to be constructive, I recommend that before you commit to this you spend at least three to six months at sea (not partying in a marina), in chunks of no less than a month at a time.

If you charter, bareboat, crew or just pay passage to an active cruiser you will determine whether seasickness, wet, cold, heat, rain, dirt, bugs, sleep deprivation, isolation, irritability, annoying bureaucracy, uncertainty and occasional physical danger do in fact take the starch out of you or -significantly- your relationship.

Nominally this will 'cost more' or 'delay' your plan.  But do it anyway.

[patrat]

You will probably enjoy this book, I did. I have no intention of voyaging, but read it for the practical aspects of small space living and low energy, long term storage/preparation of food.

http://www.amazon.com/Voyaging-Small-Income-Annie-Hill-ebook/dp/B00B603S16/ref=mt_kindle?_encoding=UTF8&me=

[SailorGirl]

Lots of good replies so far.

You can do $1K a month but only if you do all repairs yourself.  To this end consider buying a cheaper boat now that's in reasonable condition and learn to do all the repairs by upgrading it yourself.  Include things like learning to do fiberglass repairs and sewing patches in the sails.  These skills could also help you pick up a few dollars while cruising but be careful.  Most countries don't want you taking jobs from locals.

Remember that the bigger/pricier the boat, the more expensive things are to fix.  Limit electronic gadgets except for good navigation equipment.  Make sure you have a backup for any electronics that might break.  Learn to navigate by the stars (probably would never use but could get you a free beer at the bar).

Watermakers are expensive but I think buying water in the Caribbean is also expensive.  Make sure you understand about taking care of the membranes, back flushing and all that.  Practice gathering rainwater as a backup.

We had pump break a few months ago and had to clean sewage water out of the bilge.  BF has had to rebuild the potty several times.  Pumping out at stations is stinky and gross.  Prepare for all these things.

LEARN HOW TO ANCHOR.  Seriously.  The conditions of the ground below the water determine the best positioning.  Get a drag alarm in you're a heavy sleeper.  Invest in a quality chain and anchor.

You can grow herbs and fresh lettuce but not much else depending on deck space. 

Going all the way north for hurricane season would be pricey.  Most people just go far enough north or south to avoid the main storms.  You can always bolt farther if one looks like it's headed towards you.

[Stashy McStasherton]

Lots of good replies so far.

You can do $1K a month but only if you do all repairs yourself.  To this end consider buying a cheaper boat now that's in reasonable condition and learn to do all the repairs by upgrading it yourself.  Include things like learning to do fiberglass repairs and sewing patches in the sails.  These skills could also help you pick up a few dollars while cruising but be careful.  Most countries don't want you taking jobs from locals.
Thanks for your support SailorGirl. Those Negative Nancys were getting me down. We currently own a Santana 2023 and do all the repairs on it ourselves. I was fearful of mentioning this in the original post because it is not a part of my expenses. We buy about 5 gallons of gas for it a year and we have no fixes coming up in the foreseeable future that we can't do ourselves. It is an easy boat to trailer, so we just put it in for our week long excursions a few times a year.

Remember that the bigger/pricier the boat, the more expensive things are to fix.  Limit electronic gadgets except for good navigation equipment.  Make sure you have a backup for any electronics that might break.  Learn to navigate by the stars (probably would never use but could get you a free beer at the bar).
Yes, I totally agree with you. We intend to take celestial navigation classes and other sailing classes. What do you think about ASA? We could always make boat deliveries for extra money if my husband has his captain's license. The more research I do, the more people talk about keeping it simple. We plan on doing our best to get by without too many expensive and sensitive bells and whistles.

Watermakers are expensive but I think buying water in the Caribbean is also expensive.  Make sure you understand about taking care of the membranes, back flushing and all that.  Practice gathering rainwater as a backup.

We had pump break a few months ago and had to clean sewage water out of the bilge.  BF has had to rebuild the potty several times.  Pumping out at stations is stinky and gross.  Prepare for all these things.

LEARN HOW TO ANCHOR.  Seriously.  The conditions of the ground below the water determine the best positioning.  Get a drag alarm in you're a heavy sleeper.  Invest in a quality chain and anchor.
We have been practicing! My husband is ridiculous with his anchor sets.

You can grow herbs and fresh lettuce but not much else depending on deck space. 

Going all the way north for hurricane season would be pricey.  Most people just go far enough north or south to avoid the main storms.  You can always bolt farther if one looks like it's headed towards you.
Ok.

Thanks for the great advice from someone who is doing it!

[SailorGirl]

Thanks for the great advice from someone who is doing it!

We're currently at a marina in pricey Bainbridge Island.  My rough expenses are as follows (half of living expenses):

Marina - $250.  Includes live aboard fee and storage (which we don't pay but BF works around the marina in exchange)
Car ins and gas - $75.  Gas is a guess.  I really only drive when housesitting.  BF has his own vehicles.
Phone - $40
Cat food - $70
Health ins - $0.   State has expanded Medicare.
Food - $?  I don't currently track but we eat at home mostly
Repairs - $?  Almost none because we aren't sailing
Propane - $10.  Probably less
Elec. - $5 to $25 depending on the season.  Boat has solar and wind generators
Diesel/gas - $none now.  BF used ~$20 to sail up the coast of California.  I think we used less than 1/2 a tank to sail around the San Juans for two weeks.

I think these are the basic costs.  Some people add alcohol, gifts, satellite, flights home, dinners out, entertainment....
Add your own requirements and remove the costs associated with being at a marina and you can get an idea of your own costs.  Water is usually free in the US but not other countries.

Other notes:  Boat belongs to BF and he carries the insurance.  We've already decided that we'd drop it once we left the US. 
Most countries have health care and we'd drop that also once we've left the shores. 
I'm looking into adding a big antenna to try to get some free wifi when near touristy spots, otherwise it will be internet cafes on shore.

[Crazycarl]

We are planning on something very similar. To avoid the capital gains taxes if we were to buy into the market now and then sell later to buy the boat, we are planning on having the house paid off by the time we are almost ready to set sail and use those funds to buy the boat. This is like earning your mortgage rate as a return with any appreciation as a bonus and the tax savings. In your case, you could plan to have as much of the house paid off (in equity) as you want to spend on the boat at the time you want to leave. Sell the house and buy the boat. You could even rent out the house to help pay off mortgage and possibly give more to savings depending on rental rates in your area and the house.

Good luck and keep us updated on your progress!

[Stashy McStasherton]

Hey CrazyCarl! That is awesome that you are going to live the sailing life too. We accepted an offer on our house. We are going to be able to save more by moving in with my mother in law. Renting out the house would not be lucrative, the taxes are ridiculously high here in upstate NY. We are going to stick with our plan and move in with mom for $500/ month instead of our $1300 mortgage (250 of that goes to the principal). Not to mention the extra we pay in insurance, heat, water, garbage, etc.

[Crazycarl]

How is the progress going? Anything new to report? My wife keeps wanting our now 4 year plan to become a 1 year plan...haha

I really want to have enough saved to live off dividends/interest as much as possible, so when we do decide to come back home we have enough safety cushion. If i felt comfortable enough to know we could make enough while out cruising we would probably be off much sooner, so I just have to keep plugging along.

Keep us updated! 

[Poeirenta]

If OP is still reading...

Go find Sailing Totem on the web if you haven't already. They're most well known these days for the Cruising with Kids book, but they have a great blog which is very frank about the challenges (while also reveling in the unique pleasures of this multicultural experience). They just finished their first circumnavigation and are back in the States after 8 years.

[Roland of Gilead]

I don't know if OP is still around but we plan on doing something similar.   We have actually transitioned from a house to our small homebuilt RV for a few years which will hopefully prepare us for an even smaller sailboat (something in the 38 foot range).

I don't know if  you can make the $12K work though.   We were thinking more around $40K per year, with an initial spend of $100K to $150K on the boat.

You might look into finding someone who needs a crew.  We plan to do that soon.   We have taken 5 courses in blue water sailing and have sailed our little 17 foot boat hundreds of times, but there is nothing like getting a month or two of hands on experience off the coast of New Zealand or somewhere on a 40 footer.

[Crazycarl]

Roland: Another Blog for sailing to check out is Trio Travels. I believe they have a set budget of about 1500/month. When we set off in 3 years, I am planning on ~2000/month but hoping to use only about 1500 or so, with everything depending on where we are at. We currently live on about 2000/month.

that includes 200-250k for a fully refitted catamaran if we hit our max goals by then, if not, then it will be closer to 150k fully refitted monohaul.

Have you made a list of your expected expenses that gets you to 40k/year? I am curious why it is so high.

[Cromacster]

The wife and I are making progress towards our sailing goals.  We completed our ASA 101 a month or so ago.  In a few weeks we are doing our first charter on Lake Superior for 3 nights.  Then next April we are taking ASA 103 and 104 in the BVI's.

We are planning to keep our monthly spending at 1500-2000 as well.  ideally we would spend 60-80k fully fitted for a mono.  Are goal is to have about 600k in investments and about 100k from the sale of our house.  The house sale will give us the cash we need to purchase then just start living off savings.

SV Prism also did a decent budget breakdown with their goal being 500/month.  They only covered the first 7 months of sailing plus 5 months of dry storage, but it gives you an idea.  I can't imagine a 2,000 costco run haha... just fork lift it onto the boat please.

[Roland of Gilead]

(I guess we can kind of hijack the OP's thread since they have not been around for awhile)

Crazycarl:  Maybe the $40K is on the high side, but we will be in our late 40s and must prepare for remote healthcare that may or may not be fully covered under our USA ACA policy.   I figure about $10K a year for medical/dental.   I could see that our monthly budget will be quite low at times (certainly you are not spending a lot while crossing the pacific) but then you come into ports and maybe spend more than normal.  I know we will want some form of sat. phone which can be hundreds a month.    We can generate $40K a year from investments now with a pretty safe withdrawal rate, but it would sure be nice to be at $2000 a month.   I am just not sure how healthcare costs can make that level work.

Cromacster:  Excellent steps you are taking doing the courses.   We are actually heading to Lake Superior in a week or so to launch our 17 foot sailboat (maybe somewhere a bit north of Duluth) so maybe we will see you on the water.   It is a small lake, right? :-)

[Stashy McStasherton]

Hello All! Thanks for your continued support and interest in my husbands and I's goals. The house sold quickly and we got a great price. We have been doing really well. Here are the numbers:

Debt: NONE!

401K: 80,316.17 (was 70,000)
Roth IRA: 5,000 (was 4,000)
Vanguard short term bond fund: 25,238.84 (proceeds from the house sale after we paid off our debt)
Online Savings Account: 13,558.15 (2 months of savings!)

We had a couple of great months of savings - over $6000 each month. I had a great run with my business (self-employed) and we had lots of checks come in from the aftermath of the house sale (taxes, garbage, escrow accounts).  We set a goal to hit $50,000 between Vanguard and our online savings by Labor Day. Looks like we are going to do it!

We had a great trip on our sailboat in June. We spent a week sailing on Cayuga Lake. We really connected to the area. We even tossed around the idea of living there on our boat in the summers. You can get there from the ocean through the rivers and canals. Staying at marinas are extremely affordable on Cayuga.

Thanks for all the ideas!

[LifeHappens]

We even tossed around the idea of living there on our boat in the summers.

Hey, Stashy, looks like you are well on your way to turning your dream into a reality.

I think it's a great idea for you to plan to live on your boat next summer as part of your cruising prep. My DH and I lived on our 30 foot sailboat for 3 months, which was a great experience. However, it was an experience that showed me I would not want to live full time on a sailboat.

You may come to a totally different conclusion (and I hope you do, and start an awesome blog with pictures of your travels), but either way it will help you get to a firm "Yes" or "No."

[Crazycarl]

Thanks for the update and congrats on the NO DEBT! Are you planning on investing the online savings somewhere? That is a lot of money to just be sitting in an account not getting much interest. Are you talking Cayuga lake as in one of the Finger Lakes?? It gets really cold there in the winter, not sure if there is a way to keep your boat on the water during the winter there. I live in Buffalo and was looking into Seneca lake, without luck.   

You generate 40k now??? That is awesome! I would be out sailing by now haha


I think the Health care costs can greatly depend on where you are cruising. We will probably get the emergency care that I hear a lot about, but once we are out of the US, then drop all health coverage. Our kids will be about 4-6 by that time and we are very active and healthy as of now, but that can all change.

[Stashy McStasherton]

Thanks CrazyCarl! We will be in the Caribbean in the winters, silly!

Since we are saving in the short term (about two years) we figured we would put some money in the vanguard short term bond fund and then have the rest of our savings in an online savings account. I am open to ideas for short term investments. What are your ideas?

[Crazycarl]

I misread that and must have not seen the summer part...haha.

What is the interest rate for the online savings? Is it better than the Money Market rate at Vanguard? Personally, I would probably invest it in a higher dividend yielding stock such as ATT or PG that is pretty stable and will produce a yield many times greater than you are probably getting with the online savings. That could be an extra couple thousand after two years, but I am more risk tolerant.

[Stashy McStasherton]

Can't remember if the online savings is 1% or 1.25%. Either way it is definitely better than vanguard's money market at .45% and fees on top of it. I have no interest in investing in individual stocks. I don't want to play fast and loose with our life's savings. The bond market we are in is as much risk as I am willing to take.