(Image Credit: Wealthmanagement.com)
I think it is somewhere in the Gospel of Luke where Jesus talks about tallying up the costs of starting something before undertaking a project. I'm not sure He had boating in mind when talking about this, but I think it applies.
Seas The Day is now one-year old and since she's scheduled to go in the water this weekend, I thought it would be cool to tally up all the costs from her first year - just so we could understand were we have been and what we are in for.
We didn't approach this buying a boat thing lightly... we had heard all the stories about BOAT meaning "Break Out Another Thousand" or that a boat was "a hole in the water that you throw money into". We knew that besides the cost of owning the boat, we were committing to a LOT of additional costs. Of course, it sometimes is astounding to see it all in black and white. Still, we have appreciated seeing other sailing blogs and forums discuss their costs, so we'll share ours here.
Before I get into specifics, here is a bit about us. We are both professionals with well-paying higher-pressure corporate jobs and the main resource limitation we have is heartbeats (i.e, time). Neither of us are getting younger and we both were starting to feel that it was time to enjoy some of the fruits of our labor. We're in this hobby for fun, relaxation and enjoyment, so our philosophy is that if we enjoy a job, we take it on, but if we don't and someone else is doing it for their income (especially if that person lives in our town of Keyport, NJ), then we hire it out to support the local economy and "share our blessings" so to speak.
Now back to costs. I'm breaking the costs into 3 categories - ONE TIME COSTS (e.g., down payment, purchasing the mooring, initiation fees at the yacht club, and winter cover), RECURRING OWNERSHIP COSTS which are costs of having the boat that we expect will happen each year (mortgage payments, yacht club dues, launch fees, insurance, maintenance, etc.), and finally EXCURSION COSTS which are the add-on costs associated with each trip (Marina charges, provisions, restaurants, fuel, etc.).
Here is a quick overview of our first-year expenses.
ONE TIME COSTS
Buying Seas The Day was expensive. The cost of the boat (including 3 days for a delivery captain and an ASA course) came in between $175K and $200K. (Note: We love our dealers and suppliers, and I don't want to upset them by posting their prices, so we'll round things from time to time.) We never actually parted with $175,000, though, (we financed it) so we have a down payment and ongoing mortgage costs. Presumably, when the time comes to sell it, there will be residual value that will pay off the remaining loan (and hopefully have something left over).
We wanted to put a large percentage down, so the down payment was by far the biggest one-time cost which was not quite $46K. Mooring costs, yacht club initiation fees, and the purchase of a winter cover add to this bringing the total one-time costs to a little over $51,000.
I round up the mortgage slightly at $1000/month or $12K for the year. That is half of the recurring costs. Things like yacht club membership, mooring and launch fees, safety equipment, insurance and maintenance bring this total up to a little less than $24K for the year. Noteworthy is that insurance is $1600, maintenance was $2800, mooring/launch/storage ran $2400 and the yacht club (counting event fees, etc.) was $1600. We include the yacht club membership because that gives us access to incredibly reasonable mooring fees and because boating is social in nature and the Keyport Yacht Club is a great group of people! Also included in recurring costs are safety items, courses, boat accessories and clothing.
This ranges depending on what we do. The three day delivery (motoring) excursion cost $1100 (lots of fuel, marinas, food and restaurants), while a day out on the Raritan Bay costs us approximately $40 (snacks/beverages & maybe 2 or 3 quarts of fuel). A simple overnighter can range from $175 (visiting a sister club and going to a nice restaurant) to $725 (going into Jersey City at an upscale marina and restaurant). We did 25 trips, spending a total of $2800 on excursion costs.
So what have we done for all this? In 2014, we took 25 trips ranging from a 4-hour evening sail to a 3-day excursion around NJ. We spent 750 man-hours on the boat (I alone spent 230hrs). We had a grand time with a wide circle of friends and learned a lot about how we communicate as a couple and face the slight dangers we encountered while learning the ropes (literally) of a new boat. It was a fun and thrilling summer!
Finally, I wanted to express this in a way I could grasp... as a sort of "cost per day on the water" sort of figure or some other average. For this, I added 1/20th of the one-time costs (I figure a Catalina 30ft sailboat should last at least as long as the mortgage - they have a great track record), add that to the yearly recurring costs and divide by the number of days we spent on the boat. Finally we add an "average" excursion cost to that.
That comes out to be $1000 per day spent on the boat.
Here's another way to try and understand the costs... 1/20 of the one-time added to the total of the recurring and excursion costs and divide by 12 months.
That comes out to be $2400 per month.
Both of these numbers help us to plan and understand. If we want to lower the "per use" cost, we invite lots of people to share it with us and go out frequently. If we get busy and only go out a few times, that "per use" number will climb very quickly, so that encourages us to maximize our sailing season.
The "per month" amount tells us what to budget for upcoming years. While that's essentially a nice mortgage payment, right now we can do that. If we cease to be able to handle that, we need to plan to sell quickly. (Interestingly, if I were to do ALL of the maintenance myself, that would only drop the $2400 "monthly" cost down to $2175.)
But there's really no way to get around the total... in order to enjoy this fabulous year on a brand new 31ft sailboat, a total of $78,000 passed through our hands.
So... are we seizing the day? or are we being foolish? I can't say yet, but I do know I had an absolute BLAST last year and I can't wait for Seas The Day to get back in the water and our 2015 season to start. If you're friends or family, I hope you join us and help us maximize our value from this investment.