Boat ='s what percentage of annual income?
04-24-2010, 07:03 AM
#11
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Think creative financing.
Buy a boat for 500 grand. Take a 20 yr marine mortgage on it.
Pay mainly interest and then subtract that interest amount from your gross earnings amout before you pay your income taxes.
Thats how it was explained to me but that only works in the USA. NO income deductions for mortgage interest payments here
Buy a boat for 500 grand. Take a 20 yr marine mortgage on it.
Pay mainly interest and then subtract that interest amount from your gross earnings amout before you pay your income taxes.
Thats how it was explained to me but that only works in the USA. NO income deductions for mortgage interest payments here
04-24-2010, 07:05 AM
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04-24-2010, 07:06 AM
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04-24-2010, 07:08 AM
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Like they say, it's not how much you make it's how much you spend. And I would add it is how much you have saved up to this point in life.
Discretionary income: Gross income - taxes - necessities is a much better of gauge of how much boat someone can afford. If someone is still working and has accumulated 20 years worth of savings in the bank he might not blink an eye at spending an entire year's income on a boat. Where as someone making twice his salary who's in debt up to his eyeballs may not even be able to afford the gas for the same performance boat, much less the boat itself.
The question of "Are you crazy or not" depends on your particular circumstances.
Discretionary income: Gross income - taxes - necessities is a much better of gauge of how much boat someone can afford. If someone is still working and has accumulated 20 years worth of savings in the bank he might not blink an eye at spending an entire year's income on a boat. Where as someone making twice his salary who's in debt up to his eyeballs may not even be able to afford the gas for the same performance boat, much less the boat itself.
The question of "Are you crazy or not" depends on your particular circumstances.
04-24-2010, 08:56 AM
#16
It isn't the payment or fuel that is the expensive part, it is the DEPRECIATION!
My buddy just sold his 07 Top Gun this week. Buying it new (boat was a demo of sorts) he lost 125K plus fuel/insurance/maintenance over a 30 month period/260 hours of use. Boat was free and clear from day one, no loan.
125K in raw depreciation divided by 260 hours is $480 an hour. Throw in fuel/insurance/maintenance and it is probably closer to $600 an hour. So whether idling in a no wake zone or running 80 MPH to the Bahamas the boat is costing $600 an hour.
Now if you divide your usage (less hours) by the expected depreciation plus loan costs your avg. $ per hour will be substantially higher. That is when you realize your 12-15 outings a year are costing you 5K each!
My buddy just sold his 07 Top Gun this week. Buying it new (boat was a demo of sorts) he lost 125K plus fuel/insurance/maintenance over a 30 month period/260 hours of use. Boat was free and clear from day one, no loan.
125K in raw depreciation divided by 260 hours is $480 an hour. Throw in fuel/insurance/maintenance and it is probably closer to $600 an hour. So whether idling in a no wake zone or running 80 MPH to the Bahamas the boat is costing $600 an hour.
Now if you divide your usage (less hours) by the expected depreciation plus loan costs your avg. $ per hour will be substantially higher. That is when you realize your 12-15 outings a year are costing you 5K each!
04-24-2010, 08:59 AM
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Unless you have some rich parents or inlaws you can count on down the line don't even think about buying a $200K boat at this point in your life. You need to sock more savings away IMO.
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04-24-2010, 09:30 AM
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The smartest thing to do is find a well maintained used boat that is a few years old and has already taken the big hit on depreciation. Put at least 50% down and get a short term low interest loan. If it has a porta-potti, sleeping area, and you throw in a Colman type stove, the interest can be tax deductable since it will qualify as a second home.
I did all of the above except we bought new since I couldn't find exactly what I wanted used. Although, we did get it for a fair price well below MSRP. Buying new is nice since you know exactly what you have and Formula has the 5-year warranty. To buy used you have to be flexible on your choices and take the time to completely verify the condition of the boat or you may run into other problem$.
I did all of the above except we bought new since I couldn't find exactly what I wanted used. Although, we did get it for a fair price well below MSRP. Buying new is nice since you know exactly what you have and Formula has the 5-year warranty. To buy used you have to be flexible on your choices and take the time to completely verify the condition of the boat or you may run into other problem$.
