The best laid plans…let’s look at a few
Let’s take a look at a few types of plans Loopers may have to fund their trip. More ideas will be added as we discover more backstories.
I see this as being two separate buckets: 1) Purchase of the boat, and 2) Expenses during the cruise.
Purchase of The Boat
- Start saving young
- Buy the boat outright with cash
This is an ideal plan if you were wise in your youth. Many were, but not all of us!
Home Equity Loan
- Use savings and home equity to buy boat
- Sell boat to repay
Could work if all goes according to plan. Need plan B for unexpected expenses.
- Down payment
I’m interested in knowing more about boat mortgages. What are the usual rates? Terms? Restrictions on age of boat?
Use boat you already own
- No big additional expenditure
- May or may not be optimized for loop
Buy a modest boat
- Lower initial outlay
- May require repairs
Find an older boat that’s still in reasonable shape. Ideally, one that will also be low cost to operate and maintain
Downsize…sell the house
Sell house and move into smaller, less expensive place.
Use some of the house sale proceeds to buy the boat and/or the cruising kitty.
How are you going to pay for the cruise?
The question of how to pay for the cruise is the same question as “How am I going to pay for life”, but magnified. It will cost more than staying at home!
If you are retired, the normal question of paying for retirement takes on additional layers. Same for working. Can your work life be structured to be on a boat for a year or more?
Have a pension? Take a moment to be grateful! A pension helps smooth some of the harsh bumps of no longer having a paycheck.
Remote work could be either self-employment or a special arrangement with your W-2 job.
Rental property and income from other investments. These could be in your retirement or your taxable accounts. Maybe you’ll even rent out your home.
You’ll likely want to save up a “kitty” for extra expenses. The size of the kitty will depend on your other resources.
Much has been written about the cost of looping. AGLCA has a snapshot of real costs from real loopers. One benefit of AGLCA membership is a searchable database of real costs populated by close to a hundred members and counting. The “Cost of Looping Calculator” lists things like type of boat, costs of fuel, average costs of marinas, etc. and is a great resource for estimating how much your trip might cost.