How much to spend on your boat compared to your wealth?

What did you spend as a % of your wealth (identity not shown)

  • Less than 2%

    Votes: 10 14.5%

  • 2% to 5%

    Votes: 12 17.4%

  • 5% to 10%

    Votes: 21 30.4%

  • 10% to 20%

    Votes: 11 15.9%

  • Over 20%

    Votes: 15 21.7%
  • Total voters
    69
Zing

Zing

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Define wealth. If you mean liquid assets, it was pretty much 100%. If you mean the figure I would leave in my will it was around 10%
 
There was some sage old broker on the TV once ( Monaco Show I think?) who said one should spend no more than 10% of ones wealth on a boat.

It is probably an OK rule of thumb, however wealth and income to many are very different things.

Home owners in London who have been in the market for years will be worth a fair bit on paper, but in my experience their income is also well committed ( mortgages, school fees, holidays, cars etc).

So you have 2 things.

a. How much is is wise to put into a boat as a percentage of your overall. Lets say 10%

b. can you afford to run it from freely disposable income? I do much of my own work, I shop about etc but the sum spent running my boat by the time you add up mooring, insurance, servicing, other problems, diesel and flights is considerable. For most that number is probably more significant than the percentage of wealth when it comes to owning a boat.

Boats cost more too run as they get older, and they of course depreciate so you have an almost opposite relationship where as a percent the running costs are rising.
 
I think it's more complicated than even that. IMO boats are much like cars, with noticeable exceptions, that are disposable assets and should not be included in wealth. And that boats over their lifetime apart from running costs are not much more than cars and may be even less. For instance over a 20 year period you will go through maybe 4 x 50k cars less resale and a single instance of a boat at 200k less resale, but recoup more as a percentage from your boat than your cars. Further how can you assign wealth to a fast depreciating asset? It has a current value only and cant be seen as an investment.

edit (internet wobbly) i.e. for me a better question is what percentage of disposable income rather than wealth is a better measure
 
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Running costs I write off as pound per fun and balance those in the ledger of life. Otherwise the word wise in the question is in shambles
 
CLB said:
Define wealth. If you mean liquid assets, it was pretty much 100%. If you mean the figure I would leave in my will it was around 10%
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I was referring to net worth, so the nominal value of your estate. Liquid assets don’t matter much as illiquid assets can usually be converted to liquid assets with a bit of time and effort and vice versa.
 
petem said:
Are we talking purchase price or running costs?
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I meant purchase price. As BruceK said they are linked, but running costs are an issue in itself. There are some people who are asset poor, but cash rich, so for them it might be less of a burden to purchase an expensive boat using finance knowing that from their massive income it will be easily paid off. A specialist surgeon for example. I know a spine surgeon in the US who earns over $1m a year, but saves little of it. For him it’s all about running cost and finance payments. I can’t live like that though.
 
Zing said:
I meant purchase price. As BruceK said they are linked, but running costs are an issue in itself. There are some people who are asset poor, but cash rich, so for them it might be less of a burden to purchase an expensive boat using finance knowing that from their massive income it will be easily paid off. A specialist surgeon for example. I know a spine surgeon in the US who earns over $1m a year, but saves little of it. For him it’s all about running cost and finance payments. I can’t live like that though.
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I think as wealth creation via property has become harder ( buying is harder and growth slower ) there are now many people who work on "what is the rent payment". It does not matter if it is a house, software, a car ( PCP) or in this case a boat.

There is nothing wrong with that .... as long as you have enough of a pension when you retire to keep making the payments ! And of course pensions are not what they were either!
 
The accepted wisdom used to be not to spend more than 10% of your net asset value on a boat but I would argue that for most people that should be nearer 5% these days because the return on most assets is so much lower than it was before the financial crash. That means you are going to need substantial assets to generate a sufficient return even to keep up with the depreciation on a newish boat and of course the running costs of keeping a boat rise inexorably year after year as well. Of course if you are both a high net worth individual and a high income earner thats not going to be so much of an issue

It also depends on what stage of life you are at. Being a lot closer to pensionable age than I used to be, I'm a lot less comfortable destroying my wealth through owning a boat than I was a few years ago
 
Deleted User said:
It also depends on what stage of life you are at. Being a lot closer to pensionable age than I used to be, I'm a lot less comfortable destroying my wealth through owning a boat than I was a few years ago
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Sensible view, but you could also reach an exactly opposite conclusion, along the lines of life's too short...
In my experience, this philosophy has more chances to work also with swmbo, as opposed to any man math applied to maintenance, upgrades, etc. :rolleyes: :D
 
5% !!!

You're living in a different world and lend credence to the idea that boating is only for the rich. No we do just fine on, gosh, havent a clue tbh what percentage it is but it's massively over 5%. However our crazy expenditure percentage is simply a running bill to our way of life, and whatever it is we're getting top value for money.
 
MapisM said:
Sensible view, but you could also reach an exactly opposite conclusion, along the lines of life's too short...
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Yes you could. If only we knew how long we were going to live exactly, we could match our boat buying man maths to the number of years we've got left;) Believe me if I knew for sure I was only going to last until this time next year I'd buy that SD92 and Ferrari 488 today;)

Actually my opinion is somewhat influenced by the situation regarding care for the elderly in the UK. For a start our state pension is far less than most other European countries and there is virtually no state funding for the care of the elderly in the UK so if youre going to live a relatively comfortable old age in this country, you better put some money away rather than spaff it away on a boat
 
Maybe we are still looking at this differently. Boating for me is still on what is disposable income. Pensions, mortgages, etc are in another pot.
 
Deleted User said:
The accepted wisdom used to be not to spend more than 10% of your net asset value on a boat but I would argue that for most people that should be nearer 5% these days because the return on most assets is so much lower than it was before the financial crash. That means you are going to need substantial assets to generate a sufficient return even to keep up with the depreciation on a newish boat and of course the running costs of keeping a boat rise inexorably year after year as well. Of course if you are both a high net worth individual and a high income earner thats not going to be so much of an issue

It also depends on what stage of life you are at. Being a lot closer to pensionable age than I used to be, I'm a lot less comfortable destroying my wealth through owning a boat than I was a few years ago
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I agree with that, except about the wealth destruction as you get older. That actually is a good thing. You can't take it with you and it would be wise to plan to buy a boat so that the time to replace it is at, or just after croaking. That way you don't have to worry about paying for depreciation. Your last boat ownership in effect has free depreciation. Even better is that your heirs are saving 40% tax on every pound of that depreciation. So make your last boat a very expensive one.

edit: Ha, you beat me to it.
 
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