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?