Hmm… what does this article do in a sailing blog?! For better or worst my friends, money moves the world around so money is the mean to an end, to a sailing life dream coming true in our case. This is the reason I found very reasonable to make an approach hereby to the Economics of Sailing, even more the Economics of Living Aboard.
To begin with, we are dealing with two discrete categories of capital (i.e. money) here. The main one that everyone knows very well and keeps always in consideration is the Capital Expense (CAPEX). This is simply the amount of money we need for buying our sailboat, or yacht if you prefer! All of us comprehend very well what we can afford to buy and how much we have to stretch to do so. The simplest example possible, we make the math on the amount of money we can accumulate over a period of time (savings, sale of a house/car, etc) and then we benchmark this versus the sailing vessel of our dreams. Buying eventually our dream yacht brings us down to a financial standpoint were our cash account(s) maybe at near-zero value, or even negative in case of a loan. This is a very risky point since the “dream” needs fuel to keep going, and this metaphor does not refer simply to marine diesel itself!
So, this bring us to the second category, which is sometimes either overlooked or underestimated, the Operational Expense (OPEX). This refers to every other expense involved after buying the sailboat itself. Many-many-many cost elements fall under this tree. To name just a few, fueling, marina/mooring fees, food and drinks (onboard and restaurants), insurance for the passengers plus the boat, various taxes involved, etc! These are the kind of expenses needed to be made for either owning a yacht or – much more – living aboard.
To make things a bit more complicated, for those of us who cannot afford a brand new and shiny boat, another subset of CAPEX is also applicable. This is the expense for any used boat’s renovation/refitting after the acquisition. No matter how small and in quite well condition our new used-yacht might be, it will for sure swallow an amount ranging from a few thousands, easily reaching some tenths of thousands (…for those with a bit bigger boats, especially if obsessed with having all amenities possible aboard!).
Summing up the two main categories, CAPEX refers to once off expenses while OPEX refers to recurring expenses. So, while CAPEX is a major expense, OPEX is comprised of many-many lower value expenses, repeating weekly/monthly/yearly, thus cumulative over time can became a substantial amount, surpassing even CAPEX itself (i.e. over the course of quite many years).
So, do plan and count your already accumulated savings along with other incomes to come (e.g. house/car sale) but make sure not to drop all you pennies into the buying the biggest and meanest boat possible. Make sure you can afford to operate the sailing boat you are buying for the years to come!
For illustration purposes, I am attaching at the Forum section a:
- Consolidated excel list of draft/estimated CAPEX
- Consolidated excel list of draft/estimated OPEX
Both of these refer to the acquisition of a used yacht.
I am looking forward to your feedback on what might have been overlooked, over/under priced along with any other comment of yours in the Forum. Your Experience, Know-How and Wisdom sharing is always valued.