Involved discussion on finances and plans to purchase boats
 

Okay
I have not seen anyone really touch on this subject and I feel a little awkward asking but I really would like in a few years to get a bigger more expensive boat than I have now.

I see all these Cigs, outerlimits and skaters ect and I am not dumb, I know what they cost
even your lower end boats like baja and sonic or "cookie cutter" boats as some refer to them as.
Where does the money come for this?

I see a boat with a price tag of 245 and I just about poop my pants.
and paymets like 1400-1600 a month for 20 years.
What the HELL am I doing wrong?
I think 400 a month for a car payment is insane.
Is it a business that is buying these things?
Is there a way to do your taxes to write some of these things off.

I know a few of the board members personally and alot of you I just know from here. But I cant help but sit here and scratch my head and think to myself that not everyone here is a Doctor and or a lawyer or what have you.
Im not asking you to tell me what you make in a year, that I dont care about. But im asking for in a few years I would like to go larger on a boat with of course more power ect.
Maybe a 38 sonic or 35 sonic, 38 TG or somewhere in that arena.
That is a big jump from a 30' baja that is 12 years old.
If I save money each month Ill be able to put some cash down but not like this insane 45% down, 1499.99 a month for 20 years.
How do you guys do it?
Me and my wife together make a good amount of cash per year I think. We have a nice 4 br burb house with the 2 car garage, IG pool ect, have 1 trans am and 2 trucks, boat ect.
im NOT financed to the hilt but when someone says yeah this car is going to cost you on a lease 695 a month, im ready to pull out a shot gun and waste em cause in my mind that is absolutely INSANE.
Either explain to me how you do it or tell me im nuts and living in the past or something.
I just dont get it.
and I know for my demographics, I bought a very inexpensive house in comparison to all the TOLL BROTHERS homes that are going up all over the US and in the 700 thousand range right across the street and they are being bought faster than they can be built.
Where does this money come from????
Is it cause I work for someone that makes me a chump?
Can someone explain what they had to do as a plan to be able to get themselves into a cig or a boat lets say for 250-300 thou?
That is a HEFTY price tag and I need a plan my friends.
Thanks to all that reply to this in advance.
Jason

Jason…. You have taken the words right out of my mouth.

See link from the Formula section….. http://www.offshoreonly.com/forum/sh...threadid=28809

I too am looking for that next boat, trying to scheme how I will make this happen. Everything I have will be paid off (2 sleds, 2 trucks, 2 cars, home, boat) by early next year and then the sky’s the limit. But I don’t want this to be a payment for 20 years event either. I own my own business and am too wondering if this can be a benefit to make the goal a reality. Come on guys and gals…. Tell us your secrets!

Some guys look at it as how long will i keep it and what is the estimated value at that time and them put down enough to where your payoff is at your perceived value at the time you sell. Therefore you are technically renting it for a few years. If you dont put anydown you will probably be upside down unless you steal the boat.

My boat payment is $1200 and cars are $1300 (3 of them) I make a decent income and could afford more payments but not justify them. I have never owned anything long enough to see the end of the term (A.D.D.) so i just look at how much it will cost me to own it and not how much it cost. example new mercedes is pricey but it holds the value the best and is easy to resale so if it stickers for 100k and 2 year old models are dselling for 70k it is going to cost me 15k a year to own it for two years.

I am sure all of the opinions will differ greatly.

I don't know if this really answers your question, but I deal with those types of people all day. You would not believe how much money is out there. Forget $1,600./month payments, I'm talking cash for boats $300,00 and up....

A great majority are self-made, i.e. started/built their own companies, or work in family businesses. Middle-aged (45+), and have been boating for a long time. Started small just like everyone else.

There are a few young ejerks out there, but the majority are as described above. It really does make my head spin sometimes......

A few years ago Powerboat magazine did a survey of the readers of there magazine. It had some of your answers you are looking for. I could be wrong but I thought medium income was around the $500,000 range.

interst on a second mortgage is tax deductible . boat applies if it has a head and kitchenette.

I hear ya, Im a lot older than you with grandkids and I have a very modest house and l make decent money for a working stiff and I had to sell my formula 311 because I couldnt handle the loan, gas and upkeep. Even my boat now keeps me broke because I cant leave well enough alone. I dont understand it either. We must be doing something wrong. I did use equity in my house to buy my present boat. That helped with interest and taxes.

I don't know anyone with those types of boats personally. Like RT said, you'd be amazed at the money out there. Many of these people are paying cash, or $100k plus down. They ain't eatin Mac n Cheese, that's fo sho.

Almost everyone I know with a boat has two incomes in their family. And they can't afford new 38 Cigs.

I'm related to some (not closely enough thought) that can afford new $3-500k boats, but they don't buy them. 1 has an airplane and the other has probably a 1/4 mil in vintage signs. But they own companies doing $50 mil or so. And I know at least one could pay cash.

You gotta be a BIG balla'.

Jay, as to what you're doing wrong? You're not picking the right lotto numbers:D:D:D

As far as getting to more reasonably priced 35' boats or so, many get there over time and hard work. And many buy them a couple years old.

Mark

Okay well a MEDIAN income of half a million bones, that would explain where the skaters and outerlimits come in at.
Those people that do that and pay the dollars it takes to get there I can see but im talking average joe with a decent job here being able to get into something and not have to walk past it at a boat show but actually climb up on it and say to sales dude, hey, is there one I can test to see if it rides like it looks?
not just get a hard on and walk away with your tail between your legs.
I am a network manager for a small company in PA.
Me and my wife together dont even make 150 K a year and I think we are doing pretty well.
She has a 2000 ford explorer on a lease that is up in September and she thinks that a mercedes 500 LS USED was a cute car, so we drove one and it was 43 grand, to lease it with inception fees and other stuff tax ect. it was 695 a month
Im like your kidding? Salesman looked at me like I was a poor chump and basically in a nice way told us to leave.
okay Mr I sell to upper class and your trailer trash. (that is how I felt)
am I drunk or what? Toll brothers is building about 200 homes across the street from me and in their brochures say starting price is 550 thou , most end up being 700-750 with options like door handles and cabinet handles and floors.
I paid 254 for my house and im proud of what I got, but man where the hell does it come from? I have been plauged with this for a long time now cause it seems the salaries go up about 3% a year but the cost of everything is going up about 400% across the board.
Should I be investing in the stock market? CD's, Bonds and stuff?
should I at the age of 31 be financially stable to buy a 300 thou boat for cash? I have worked very hard to get where I am at and I look around and I feel like the world is passing me by and im doing something wrong. a financial plan to prepare myself in a few years to buy a bigger boat is what im after here but in my simpleton mind, if you dont make 500-900 thou a year and are a ceo and ect your boned in the butt baby.
and then you get treated like your a douche at the dealers and boat sales places.
went to RPM boat sales in NJ a few years back. Saw a Larry Smith 1987 (in essence a scarab) boat.
was nothing pretty
twin 420's TRS drives and a cabin wiht rubber flooring and just 4 couches facing each other.
Boat was on a trailer with no brakes cause dude that owned it was using a CDL dump truck to pull it.
boat was 20 grand. I figured at that time making little money cause of my recent career change I could do it but would be tight.
about 300 or so a month, plus money to put into it to make it look nice, new trailer ect. Needless to say I could not afford it so I walked away and the sales person was mad cause he thought I was prop kicking and was not serious.
Im trying to come up with a plan to overcome these obstacles here. and no I doubt Ill be able to come up with the cost of depreciation for 3-4 years worth on a 300 thou boat (and at the rate these are going up, probably boat in a few years will be up another 150 K)
So what to normal average people do?
I see the second mortgage thing as tax decuctible which is a start. Wife wants amenities like micro, enclosed head, so on and so on. So maybe I can swing that but still going to cost me 1200-1400-1600 a year which at this point in my life I cant see being able to do.
GRRRRR
Jason

This may not answer your question jay but it's a money thing and made my head spin. Last week my 24' baja was on blocks at a marina and I was under it in a pool of sweat with a bottle of wax. A guy walks up looking for the yard mgr. We talk, he leaves but before he does says he loves my boat, and he was sincere about it. Real down to earth, not cocky. Later I see him messing with his 38 step-hull Scarab, then he left the yard in a new Ferrari Modena. Holy crap I was talking to a millionaire!!!

I think the majority of big bucks speedboat owners are successfully self employed. Business & tax laws make it easier and cheaper to own expensive toys. All you need is operating capital and 3 sets of tax books.

I wonder how many younger (I'm 41, so younger is younger than me) enthusiasts are risking their fanancial future for the present? I still have four kids in school (not college) and would not pay big bucks for a boat though I could easily afford the payment. Unless I could burn $300K and not care, I sure wouldn't spend it on a new boat.

Good story but im not saying that the "super rich" folks are not mean, ignorant or cool people.
Lets see if we can get someone here that makes with his wife a average 150 Grand a year income ish somewhere that is what a normal person considers doing well)
that sprung for a top gun or a fountain or whatever, does not matter what boat, that is in the range for a boat say between 160 thou to 300 thou (boat can be used as well no problem)
Fair enough?
Just post up the following
What did you put down up front,
payments per month and term (5 yrs-12 yrs ect)
Does your wife kick your butt to the curb each time a bill is due?
My wife is moaning that were poor cause "we own a boat"
My boat cost me 17 thousand bones and I have invested about 13 thou into it.
In reality from what I have seen up here Hell there are single engines that cost more than my whole shebang.
Thanks guys!!!!!
Jason

Jay-
There are also business owners that have the kind of money to purchase the big toys and don't, until they are ready. They run the boats that don't cost much and require constint maintaince, until they get the bills all knocked out. Then they buy the big boat.

One thought for you to chew on. You say that they are building houses across the street that go for 500-700k. That has got to be upping the value of yours? I would really have to consider selling and taking the profit, paying some bills off move into a nice house in a lower market and then start saving for that boat. I live in the country with 10 acres and a small house, paid a small amount for what I have. But they are possibly going to connect the main road to the intersate 5 miles up the road. You can bet I will sell when it ups the property value!!:D

Just a thought!

Chris

good question....my 2 cents
 

I wonder how I do it myself, it has become
a fixed cost, first boat 300.00
2nd 10,000.00 3rd 24,000 4th 60,000
this one over 100,000 with some negative
equity from the last one, 5000.00 down
15 yrs 800.00 month.
Small biz owner with 3 yrs declining sales
in this wonderful economy.
Just got married a year ago so no help
there. This will always be my expence.
I think my justification comes from living
in the same house I had built when I was
25, I'm 40 now the combined payments are
still less than most peoples house note.
Not to mention insurance, docking, gas, etc.
Its an expensive hobby, but i don't like golf.

Jay,

There are many thing to tpuch upon here. If I forget one I appologize in advance. Affording a boat, home, car etc. and making the payments are far cries from one another. I know people on this board who haven't a pot to piss in or a window to throw it out of but are still driving around in new/newer vehicles and or boats. Some come from old money, others parents/grand parents bail them out. There are also people here who have boats that cost more and are much nicer than their homes. Some are genuinely well off and successful in their own right. God bless them and much more success to them. Just don't let appearances fool you. Certainly, there are those who are EXTREMELY successful and just plain rich.

To be more specific regarding your question. I for one do not believe in financing fun. No car/truck loans, no snowmobile, waverunner, motorcycle or boat loans either. I do not buy what I cannot afford. Also, leasing is VERY EXPENSIVE unless you own a business and write the lease off through the business, all it does is put more money in the dealers hands and less in yours. PERIOD! Again, if you own a business then leasing MAY make sense.

You should NEVER sacrifice your retirement savings and saving for a rainy day to buy a boat. Remember, the odds are not in your favor that the boat will increase in value. Start saving for your new baby now, only after you have both maxed out your retirement savings plans. Also, if you have alot of equity in your home, a home equity loan or line of credit may be the most effective way for you finance your new toy. In fact, in many circumstances it may be better than paying cash as the interest is tax deductible. Also, it was said earlier and is TRUE, that if the boat has a head, kitchen and sleeping quarters it MAY qualify as a second home and therefore interest MAY be deductible in that case too.

A great book that you may want to read is The Millionaire Next Door. It was written by Jack Stanley and Bill Danko. It is really enlightening and a great read. I hope this is somewaht helpful and if I can be of any further assistance please let me know.

Shane:cool:

One more thing I forgot. Many people that are well off do not brand new. Many buy slightly used but immaculately maintained vehicles, boats, cars etc. There is so much depreciation in the first year or two is much more than they are willing to bear. It makes alot of sense. I tend to do that myself.

Keep in mind, you cannot spend your way into prosperity.

Damn, Jay - thanks for making me feel poor!

All I can tell you is, if you have kids you can kiss that $100K+ boat goodbye! :(

Personally, we both work, one child, just moved into a newer (and larger house). I drive a ten-year-old truck with 150K+ miles, wife's car is 8 years old with 100K on it. No car payments, boat is 15 years old, so no payment there either. Still, we feel financially challenged sometimes, especially when we look at what we will be facing soon with child care costs. I think you touched on it when you talked about being a business owner. Most of the folks making the really big $$ sure as heck aren't doing it by working for someone else. They bought or started their own business, built it up, then either sold it or are reaping the benefits from it after it took off. That's why they call them entreprenuers (risk takers). I just wish I could work up the nerve and come up with a niche to do the same.

Good luck!

This is my assessment;

Run their own business, hopefull a CASH business
Don't have any kids
Wives that work
Don't have to provide a family "class" home
Inherited the money
Plain 'ol stepped in it.

I still buy lottery tickets and I am into a pretty decent 6 figure income. I do all my own work and pass it off as a "hobby"

I'm looking at an upgrade, but my finger is in a lot of pots. I can afford more, but I'm not stupid. Go to national liquidators sometime...

wanna buy a boat!

http://www.newfocusis.com/shooter/index.htm

(gratuitous excuse for another buy my boat plug!)

JAY- My first reaction is to tell you to look around.... I'll bet you'll see alot of people that work just as hard as you, or harder, that make substaintially less then you & have less to show for thier labor.... Its easy to notice those with more... keep it in perspective..... As a CPA I do work for business owners that make millions every year... some are very happy were they are.... others never will be... I work for myself... thats my reward... not that the $$$ doesn't matter... but it REALLY isn't the driving force... I like the autonomy being self-employed provides.... You're 31? Give it time son;) .... wealth takes time to accumulate.... like SHANE said.... you can't spend your way to prosperity.... one more thing.... it was mentioned here several time to use the equity in your home to finance that new boat.... if you do remember... should you be unable to make that loan payment... the Bank will not take the boat... they take you HOME... be careful there... or at least by a comfortable boat to live in....;)

This is my strategy.
1) Buy low hour slightly used boats. Never buy old boats. Never buy a new boat.
2) Pay it off and sell it for near what you bought it for and put the cash down on the next one. If you cant buy the boat for less than market value dont buy it.
3) Have your priorities straight. I drive a 1993 full size Blazer thats been paid for since 1995. There is room for a boat note without a truck note.
4) Own your house and use the equity in it to your advantage. We are a double income family with one child and the house will be paid off in 10 years.
5) Never get into an upside down deal on a boat. Always be able to dump the boat quickly at less than market value and still get cash back. If you cant dont buy it.

So right now I have a boat note, with tax deductable interest that I can get out of if anything changes, instead of a truck note. I own my own business and this gives me the ability to pay the boat down quickly with chunks of cash every now and then. The hard part is not buying superchargers and such and just pay for the boat first.

My first boat was a '95 22 Scarab that I bought in '96 and sold for $500.00 less than I paid for it in '02. Put the cash from the Scarab along with some savings down on a year old 27 Fountain with 32 hours. The Fountain will be paid for in 3 years and still be worth almost what I paid for it.

There are plenty of good deals out there. If I do this a few more times I will have the near new 35 Fountain I have always wanted. The trick is being able to buy the boats right. The home equity line of credit makes this possible. It gives you the liquidity to jump on a good deal when a seller gets motivated. It also lets you buy your new boat without having to sell your current boat first so you never miss any boating. Never get upside down on a boat and dont think you can makeup your maintance or modification cost (new engines). This hobby has lots of cost besides the purchase of the boat.

Just my strategy, it will never get me that $600K Outerlimits but it will keep me in clean low hour performance boats.

Ron

Problem is my house is 25 years old, and these toll brothers houses are brand new.
Everyone wants new, vaulted ceilings, skylights, big foyers, big kitchens ect
Mine is not as big, not as fancy, so on and so on.
It is actually keeping my house price at a minimal cause these things are staring us in the face.
they are really HUGE looking but not overly huge inside.
nice homes definately, 700 thou worth of house, not by a long shot.
Hell they cant get zoning to put a IG pool in, cause of their postage stamp lots they are on (.2 and .3 acre lots)
the houses are around 3500 sq feet.
mine 2700 I think
My house will appreciate yes but the problem is no where around my area is going down, they are all going up like mad.
so If I sell and make some cash on my house, then I have to pay that increase if not more to get another house.
I hear what your saying though, go to a more lowered area of cost of living and start again and put more down to have less per month over head to free up $ for boat and boat payment
Okay that is good

So, that is 2 really good inputs there
#1 second mortgage if boat has right amenities and is able to be written off
#2 possible relocation to local less expensive yet equal amenitie home.

Getting there one by one with the answers.
Good discussion so far
Jason

My wife and I make a nice living(too bad I spend it as fast as we make it), but we bought a duplex while she was still in college so we could afford to get out of an apt. but still get a house. Went from paying $675 on an apt, to right at $400 on a mortage. Lived in one side and rented the other. Then we moved to the contry and rent both sides and let the over flow pay some of our mortgage. I like to try and be the jones instead of tryin to keep up with them:D We don't have a $100+ boat by anymeans but once the trucks and some bills are payed down the yes we will move to a larger boat:D

Oh, Jay by the way I am 28 and she is younger than I. I have watched my family members either rent houses until their kids have left school or other members file for bankruptcy. We will never go there I'll sell the houses and toys first then work towards it again. I agree with Shane on the book, I read one a few years ago and it make alot of sense. I can't remember the exact title something about a Barber(shane any idea?)but I am going to pick up the one Shane mentioned. If you pay bills off or down use the snowball method, it will work for you!!

You've got your goals, now just get a plan and work for them!!

Chris

yo dude
you should think about moving above Nockamixon. you'd be surprised how much cheaper it is to live just 20 min. north of Doylestown. once i'm ready i'm going to start looking up there. i've seen houses a tad smaller than yours with about the same yard for 60-90 thousand cheaper than your house. no pool and i know thats a snag with the Mrs. just an idea bro

Russ

They are all drug dealers :D:D:D:D

Like it was said before, Buy "New Used" I use to work at a marina while I was in college and I even sold a couple of boat's.

Anyway, what it tought me was Never buy a New Boat! There are WAY too many people that go out and buy a brand spanking new boat and finance it to the tilt, then when money get's tight it's the first thing to go!!

I use this theory in just about everything!! Car's, Truck's, Women oops!! I didn't mean that!!;)

I once heard from a salesman at a marina that sells a lot of large SeaRay's he said that the people that buy the big one's usually pay for it and not finance it!


BTW, I have never seen a Funeral Director in a new (or even a used) Skater, Outerlimit's, etc. Soo. I don't know where they are getting the Money!! All I know is that they ain't puttin people in the ground!!;)

Geez, now I feel really bad. Im 50, dont have a pot to piss in, although I do live on Lake Erie, no retirement, negative worth, tank for a boat, but I had a lot of fun getting here. I already have my retiremnet shopping cart picked out.:D

Eh kid, If you gotta ask, Fugettaboutit !:D

Just kidding :p

They all belong to the lucky sperm club.:eek:

RIGHT TIME RIGHT PLACE
 

AND A LOT OF HARD WORK

Lots of Mac & Cheese - Mmmm :p

Jay .. at 31 you seem to be doing pretty good...We are prob in the same league as you and we are self employed with 2 small biz's going and a 3rd up and running in 3 weeks...I think it is all about priorities for most...at least for me it is.... I 'm chomping at the bit to have a newer and certainly a bigger boat..(20' CIG here) and could prob afford one if I quit sinking all my money into building my/our future and that of our daughters , BUT , first things first... I actually whent backwards with my last boat ...sold a 98 24' proline and bought this ole 20 cig ..had to pay for the new biz somehow...also sold my ski boat which was really nice...but first things first..

I will have a newer boat 35/38 something ...and with one of my stores being called DoublEdge a cat is certainly in order $$$ Skater no doubt... when will that happen ? I have no idea .

I also work a full time onj top of everything else and as mentioned earlier I pay noone to fix anything I can do myself..and if I cannot do it I learn how...15 yr mort. , the stores we have in operation were set up and built by my wife and I , I mean everything , lights , flooring, ect...ect..We bust our as#$% to just keep em going just as alot of the poeple you see tooling around in that 50 ' OL or whatever have done...just hoping our time is comming but all the while being thankful for what we have

I have often wondered the same thing you have ..How do they do it ?? for most it is hard work and yrs of it...HEY I can do that ..and so can you ...


sorry for the rambling...set some goals ...reach em ...set some more..

That's a good point. Set a goal for when you would like a boat for a certain amount of money. Most people that don't get there fail because they don't have a plan with a specific goal in mind. Go for it!:)

don't worry Jay. you'll get there sooner than you think

My wife works and we have 1 kid. I just sold my boat and looking for another. probably around 50-60k. We make good money, but I would like to pay my house off first. You have determine what is comfortable to you and your wife. Check out Dave Ramsey. Read his book and make your own decision.
Dave Ramsey

Jason,

You don't have to get a second mortgage on your house for your boat interest to be deductible. It can just be a regular old loan. It qualifies for deductibility as a second home anyways. A RV can also qualify for the same. But you of course can only have your first home and ONE other home - your vacation home as the IRS likes to refer to it. The three things that you must do to meet the IRS guidelines for deductibility are:

1. Toliet - we have a porta potti
2. Cooking of some sort - one of those little plug in cooktop stoves works
3. You must spend at least 2 nights on your boat during the year.

BTW I work at a CPA firm.

Cyndi

Mrs. 283Check: Did you mean to type 2 weeks?

Jayl13: Working as a business consultant for privately-owned firms for years, I noticed one thing about the successful ones: They didn't notice when they got rich. Most were so busy working to build the business, it just happened on them. (Others who were born into it noticed, and the more flamboiant(sp?) they are, the sooner they lose it).

If getting rich fast is your goal, I reccomend commission sales of high-dollar items or services. The good ones make lots of imcome, but they are a small % of total salesmen. And don't kid yourself, they work long, hard, hours to get there. Doctors and Lawyers also work long hard hours, and have little time to enjoy themselves.

Very few will generate that kind of wealth working as an employee. Most own the business.

If you subordiniate the rest of your life to a fancy boat, you may be able to buy one without making/having that much money. Boils down to priorities.

One last thing: As someone else on the board said, any boat that gets you on the water, having fun, is a good boat.

I pretty much live by what Fred said. Very well put. Be thankful you have a boat :), others standing on the docks think your rich just because you have a boat.

You can afford it, if you want to!!!!!
 

I had an excellent economics professor in college who started his macro class off with a story about buying a Ferrari. He said all of you can afford one if you want to. The question is how bad do you want it versus other things in your life. He then lauched into a discussion of limited resources versus needs and wants (necessity versus luxury). It became very clear that the needs side of the equation is indeed very small. Where the higher cost comes in is the wants. You need a car but do you need a Merc. SL or do you want one; etc, etc.

If you and your wife make nearly $150,000 a year, you can easily afford a $250,000 house a couple of cars and a $200,000 boat. The question is do you want to. You have limited resources to spend. What do you spend it on ?

There is a lot of knowledge in the previous posts. Things like leasing versus buying, buying used versus new, keeping the older car cause it still works just fine, fixing stuff yourself, eating out less often, the list goes on and on. What you and your wife need to do is sit down and determine the priority of your wants. You have more than enough to meet your needs, it's your list of wants that make the boat seem so difficult to get.

My bottom line is, set your priorities and goals, budget your resources accordingly (and stick to it) and be happy. :D

Slingshots right, a lot of hard work. Most of my customers with the high dollar boats are always working. I've seen many performance boats with only 35 hours or so in 5 years. Especially when they're self employed. Sometimes the guy with the 24 Baja has more fun with his boat than a lot of the guys with the big boats and gets to use it a lot more.

Like H20 said, it's all a simple matter of priority ! ;)

The Grass Is Always Greener
 

Success..
Some of it luck, some of it hard work...Some never achieve it. Whats realy important is being happy where you are in life.. Im not that proud so I can say that I dont even make 50K ..My girlfreind makes 75K ..Humbling (think im gonna marry this one).
Im realy enjoying life ..My 24 footer at 80+ is more fun to drive than my bosses 41 Sonic with 1600 H.P.
And always remember " A fool and his money soon part":D :