Some Financial Details

I grew up sailing off and on but it was in college when I first started researching the dream of selling everything and living on a boat.  I had zero clue that lots of people do it and I didn’t even know why I wanted to do it.  At the time it just seemed romantic I guess; I was in art school and everything was about the romance.  Times have changed, we have crushing debt from said art schools (Erin and I went to college and grad school for various art degrees,) we’re married, have a mortgage, and work full time jobs.  So when we started researching living on a boat this time I was really curious about the financial side of things.  How do people afford to sail away into the sunset?

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It took some digging around but I found some blogs where they disclosed this information and Cap’n Fatty Goodlander came out with the book “Buy, Outfit, and Sail” which I re-read about once a year.

I’d like to start our rough contribution to the “how we are doing it” dialogue.  This is going to be pretty text heavy, I apologize in advance – I love the pictures too!  I would also like to preface this with our complete lack of financial guidance experience – we are not trying to give anyone advice, we are just letting you know what we are doing and if you happen to dig it, thats great! If not, thats cool too 😉

How can we afford to work on the Alberg?

First off: we only buy things on a major sale.  We NEVER buy any “marine” or boat item full price (actually we don’t really buy anything full price but we will get to that later).   Defender has great deals and even better sales.  I go to the clearance section every once in a while and they always have a good sale in October centered around the boat show in Annapolis.  When my dad was getting ready for his own “cruising dream” he would create a list of stuff he needed all year long and only buy it on sale in October when the boat show sales were going on.   We do the same.

Is it on sale?  Then don’t buy it.  Wait.  It will go on sale eventually.  There are some exceptions but the vast majority of things go on sale.  Use “wish lists” to track items you know you need.  Almost every online retailer has a wish list function, we have multiple Amazon.com wish-lists along with our Defender, Jamestown Distributors, and West Marine wish lists.   Speaking of West Marine – I usually stay away from them with the notable exception of their Friday sales.  They will have things like running rigging for 40% off once or twice a year for one day only.  This is the ONLY time to buy your running rigging.  Same with dock line or whatever else you need.  Back to wish lists – I use them as price-drop lists.  I just watch them, sometimes for YEARS until the price drops and then I make the purchase.  If the price doesn’t drop, I don’t buy it.  All that time gives you a good chance to think about if you really need the item in the first place.   Which brings us to a great point – don’t buy stuff you don’t need.

I was listening to the Tim Ferriss Show podcast  and he had a fellow who goes by the name “Mr. Money Mustache” who writes a blog and one thing really stuck with me.  He was talking about making himself wait to buy things and in that time figuring out if he really needed it anyhow.  In summary he mentioned he asks himself (I’m paraphrasing,) “Does this thing I would like to purchase REMOVE a NEGATIVE from my life?”  If the answer is yes then he feels good about purchasing it.  If the answer is no, then why are you really buying it?  Just to make yourself feel better?

So heres the thing:

Erin and I don’t have a cable bill,  hell, we didn’t even have the internet until two years ago and we still have the cheapest plan available, we keep the heat at 65-68 in winter and the AC at 75-78 during the summer, we rarely got out to eat, we don’t go to bars or nights out on the town, we usually just don’t buy stuff we don’t need.  We believe if you need stuff to make you happy there is a problem.  We’ve all been taught by society and mass marketing that buying things will make us happy… It’s a lie.  The richest people in the world who can buy anything will tell you this plain and simple – they do:  read their books.  The new push is “experiences will make you happy so buy the experience.”  I think thats a step in the right direction but you need to ask yourself why your not happy to begin with?  Why do you need something, anything, to be happy?  You don’t.   Happiness does not come from stuff.  If you break that mindset you will find yourself happier, with less clutter, more money, and happier than ever!

I’ve been there.  I’ve thought I needed a new this or that to be happy but when I purchased the thing of my desires the happiness created wore off in just a few days or weeks only to be replaced by the desire for that next thing on the horizon that I must have to be happy.  The process is never-ending and you can own it all and still not be any happier.  In fact, many of the ulra-rich report that they were less happy when this same realization dawned on them.  Again, read their books, they will tell you in their own words.

Back to us: All gas stations are not created equal.  When I lived in Chicago and New York City I rode my bike or walked everywhere.  It was glorious and wonderful and enhanced my life greatly.  Alas, we now live in a city where a car is a near necessity and we need fuel to power those cars currently.  The goal is to be car-free in 5 to 10 years but for now we choose our gas stations wisely.  There are always a couple gas stations that have lower gas than all the rest.  Find them.  Also, I NEVER frequent a Shell of BP gas station as I don’t feel good about supporting a company that promotes genocide.  If you don’t know what I’m talking about please google “Shell Niger Delta Genocide” and read all about it.  There will be lots of articles about past atrocities – what they aren’t reporting is that it is still going on sadly.

We don’t take vacations multiple times a year or even once a year.  When we do take the rare vacation we do it in the most cost effective way and we put a ton of research into it before hand.  If at all possible we try to center our vacations around sailing to further perpetuate the dream.

When stuff breaks we fix it instead of paying someone to fix it.  This might seem little to those of you who are well versed in your handy-person abilities but its a HUGE money saver.  It might seem IMPOSSIBLE to those of you who’ve never done it or feel like you can’t.  Give it a try – whenever something breaks just take it apart – what do you have to loose?  Its broken already!  Most of the time in the process of taking it apart you will find the offending part.  Google the broken thingie.  It probably costs $5-$20.  Thats when it hits you hard – the repair person charges $50-$200 to fix it and it only costs what!!!  Yup – save that money and do it yourself.  If you’r reading this blog you need to figure this stuff out on land while you still can so you can fix your boat when the repair person isn’t available!!

All this fixin’ and no-TV-watchin’ sittin’ in the heat or cold may sound lame to someone raised in good ol’ Amurica but if it does you may want to think about how it all contributes to the dream of living on a tiny plastic boat in the ocean.

Wanna know the amazing part?  All of the stuff we don’t do or don’t buy or don’t pay someone else to do makes us happier!  The more independent we become the happier we are, the more money we have, and the closer we are to sailing away.

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How can we afford to dream about sailing away on the Alberg?

This brings me back to Fatty and his book.  In Buy, Outfit, and Sail he emphasizes being debt free.  I didn’t think it was possible.  Erin and I had quite literally resolved ourselves to being in debt for the rest of our lives.  But we still wanted to sail away! So we were going to sail away still in debt – I actually have it calculated into my early savings and living expenses spreadsheets.  IT DOESN’T MAKE SENSE!  It took me a long long long long long time to come to that realization.  Erin and my combined student loan debt by itself was over $250,000 when we got out of school.  CRAP!  We really thought there was no way to pay it all off.  I remembering being crushingly depressed because of my student loan debt – almost to the point where I really could not function.  But we started paying it off, little by little and this past year we were actually able to pay off two of the loans completely.  We still have a ton of student loan debt, but we are making progress!  If all goes well, we will be debt free in the next 5 years.  That is just crazy to both of us.

So heres the thing: we DO put all of our extra money into paying off debt.  All of our monthly disposable income goes specifically to paying off student loan debt.  I am blessed to be in a position in my company where I receive bonuses a couple times a year.  ALL of that money goes into paying down our mortgage.  Before we had a mortgage ALL of that money went into paying for the Alberg.

Speaking of a mortgage: we only have a mortgage because it brings us closer to financial freedom and our dream.  We will actually save money on the deal in the long term by not paying rent.  By not paying rent we will be able to pay off our student loans faster.  And then when we leave we will have income from our house that we rent out to others while we cruise around.  Erin and I never wanted to buy a house and we would not have bought it if we couldn’t pay it off quickly.  Paying interest on such a large amount for 15-30 years seems like a really bad deal to me.  Thats why we put any and all of our extra funds into the mortgage.

Similar to the house, we do not buy new cars.  Ever.  Neither one of us knows what its like to drive a new car – the closest we have come is the truck that my job provided me last year as a part of my promotion.  An AMAZING benefit!  Cars are a huge money sucking waste and it sucks that most of us have to have them.  We don’t have to have a fancy new one though!  Does it really make you happier in the long term?   We set $10,000 as maximum for cars and we have only just recently purchased Erin a used Honda Civic for that price.  Her car before that cost $2,800 and my cars have cost anywhere from $4,000 to $7,000 over the years.  It’s honestly never crossed our minds to buy a new car – seems like a total rip off to me.

When we do buy stuff we need we buy it with credit cards that have rewards programs.  I highly recommend this if, and only if,  you have the discipline to NEVER pay interest on them.  This means you get zero interest cards and/or you pay the full balance every month.  If you have that discipline its like printing free money! I regularly make $50 to $100 every month and I use it to pay down the credit card bill.  I have the cards automatically pay themselves off each month so that I don’t forget and accidentally pay interest.  If you pay interest on a credit card, you are loosing the game.

Likewise, we try not to store our money in our checking accounts.  Having a large balance in a checking account is cheating yourself out of money that we could otherwise use to A) pay down student loans or the mortgage or  B) put into a savings or investment account.  We have a “rainy day” savings account that will cover 6 months of our expenses and we don’t touch the money in this account unless we have a serious emergency.

I feel like I’ve arrived at the investment table a little late in the game.  The student loan debt has always been so overwhelming that I just didn’t see the advantages.  That is until we began paying tons of taxes each year!  At that point a 401K or IRA just makes sense and will help you save money on your taxes through deductions while investing in your future.  Erin works for Starbucks and they match her 401K so that is also like getting free money!  The money saved through deductions on taxes will just get re-invested into paying off the loans! A win, win!

Erin also takes advantage of Bank of Americas “keep the change” program which rounds up purchases she makes and puts the change into her savings account.  I do this to the extreme with an app called Acorns.  Acorns rounds up any purchase I make from any of my credit cards and invests it.  I also voluntarily set it up to take $1 a day out of my  checking account and put it towards my investments.  I am really not going to notice the difference and the money is going into a diversified account that I don’t worry about or touch.  These are easy ways for us to save money, pay less in taxes at the end of the year, and invest in our future.  Accounts like Acorns can help us while we cruise, accounts like 401K and IRA’s will help us not have to go back to work when we are older.

So here is the bigger point:  As a result of our desire for LESS instead of MORE we want to live on a small sailing boat that won’t have AC/heat, will not cost us money in rent, and needs only the wind to travel around the world.  Our cost of living will actually go down and our happiness levels and freedom will only go up!  They already are!  A lot of people think of a “yacht” as a luxury and they are usually correct.  For us, its a step towards independence, freedom, and sustainability all the while reducing our footprint.  It’s a step away from the mainstream consumer culture in the US and a step towards living our own lives, directed by love and happiness, not desire and want.

It took us a hell of a long time to arrive at some of the conclusions stated above.  I hope that maybe we can reach one person who is on the precipice of making some of the same conclusions and provide the support needed to go for it!  Anyone can do this stuff.  It doesn’t have to take a lot of money if you restructure the way you think you need to live.  That is a deal that we have decided to take and we have found it brings us even more contentment.  We aren’t experts at this, we aren’t even well practiced.  We hope to offer up our experience only as an example that is working for us so far.

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10 thoughts on “Some Financial Details

  1. It’s a great thing that you have learned the lesson on not buying happiness at a young age. I worked for a major insurance company for 15 years constantly spending my way to being happy. Bigger house, nicer car, nicer clothes, bigger more frequent vacations. I had a brand new Lexus, a Donzi sport boat, ranger bass boat, two motorcycles, a house on 10 acres with a three car garage, and yet every time I went to that job i hated I felt ill. I hated my job, I hated my life and yet I was stuck working it because I had built a life that required me to earn 100k a year. Then out of the blue, I was let go. With in six months I had lost everything that I thought made me happy. Broke, cars gone, boats sold, bikes sold all trying to keep myself from drowning in debt. When the financial storms cleared, I was busted (not broken) but I felt an eerie calm. Something in my 43 years of life I had not felt, free and happy. I made a promise to myself that I would never do that again. New cars, houses, debt in any form, all equal an end to my happiness now. I had wanted for years to learn to sail, but never had the time. Well I have that time I traded 40 to 50 hours a week away all those years, just to end up unhappy. As you know I bought an Alberg, and I am happier than I have been in my life. My future feels bright, and the measure of my success in life is not coming from my paycheck. Congrats to you and I love what you both are doing.

    Liked by 1 person

    1. Wow, what a powerful story John, thank you for sharing! I am so happy to hear that you are not still at that job and that you are happier now even without the fancy cars and sports boats! It’s a wonderful freedom to have and we are lucky to know it! Thank you again!

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  2. Im with you on living on the cheap. I will be debt free in 3 weeks and will start saving $750 a week towards the boat. I should have purchased and refit in about 2 years, then work 1 more so I can take a year off. Wish me luck as I have you and Ill see you out there!

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  3. Really well written.
    I admire your financial discipline.
    Paying off 250k in student loans is a massive job. I can understand how the realisation of this debt load was very depressing.
    The one point I agree with is that money doesn’t buy happiness. Actually, sorta the opposite.
    People strive to have a huge pot of dough, getting miserable all the while they are doing this. Why? Because they know that once they have mega bucks, their life will suddenly be filled with happiness.
    But, guess what? They now have a few million in the bank, and their personal life still sucks. Now, they’re really pissed, because all that they worked for didn’t buy them way they thought they’d get.
    Having dough is great if you have a balanced life to begin with.
    Here’s what bigger boats entail:
    Lots of expense
    Hiring crew (once you get above 60 feet)
    And pressure to either use it, charter it, or somehow live with the ongoing costs of a very pricey toy.
    There are TONS of sailirs who have boat lockers full of crap they will never use.
    With the right message, a lot of folks will send you stuff if you cover freight. I think this is really worth investigating. Put together a site where they can upload photos, etc., and then find ways to ship it cheaply.
    Then post pictures of all the great (and possibly not-so) that you have culled from others cast-offs.
    Now, one last thing I want to disagree with you on..
    You are dead set on not leaving while still having debt.
    I don’t agree.
    You are both young & healthy. You almost got killed in a car crash recently.
    Life is way to friggin short. Use it. Go sailing as soon as you can, and keep paying down the debt while you enrich yourself with irreplaceable moments you’ll never have twice.
    Money is a pile of paper you are shoving across a table .
    You will pay off the debt. But enjoy your life while doing it.

    Liked by 1 person

    1. Thank you Arthur! That is a fantastic idea about all the people with stuff that they don’t need or use! And you’re 100% correct, life is too short and we really do need to hit the water as soon as we can. Tomorrow is not guaranteed and neither is our health or abilities. Thank you for this reminder, sometimes we need it!

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