Talk about Great Loop financial backstories! One of the most comprehensive and transparent ones you will find is by Technomadia.
They have an excellent post about the thought processes behind buying and paying for their 4788 Bayliner. This particular post really opened my eyes to some possibilities I had never considered.
First, they discuss what they learned that had them increasing their original budget.
“Our initial plan was to pay cash, and to have a “disposable” boat we could be done with after a year or two.
Ideally something that would be easy to sell after we had finished the Loop, but which would not tie up too much of our assets if we needed to sell quickly for a steep loss”
However, when they started looking closer, they found the boats in their original target size and budget ($25-$50K) were in very rough shape. They were not interested in a project boat.
About the same time, they started entertaining the idea of a much slower loop, not rushing through in a year or two, but taking their time, which would justify something more than a “disposable” boat. However, boats in the little bit higher price range ($70-$80k) were still of an age to be needing major repairs in the near future.
“Our dilemma: older boats that were already updated and in great condition were too expensive for us to buy with the cash we had set aside, and yet they were too old to finance.”
Which leads to second point that made me sit up and take notice: their innovative approach to paying cash versus financing.
They had set aside around $100,000 for the boat purchase, which is similar to what we have in mind. Once they realized the need to get a newer boat and increase their budget, they were faced with how to come up with the difference. They had enough in investments to sell and pay the difference, but these were well performing investments and selling would mean paying capital gains and losing out on future appreciation.
So, despite a life lived generally without debt and monthly payments, they decided to finance rather than cashing in the investments.
If you’ve ever lived completely without debt, you understand how freeing it is not to have monthly payments. They were understandably reluctant to enter into the monthly payments game.
Here is their innovative approach, which is laid out in detail in their post.
They put the usual 20% down and paid for the normal boat purchase costs (survey, sales tax, etc.).
With the remaining cash, they socked away 5 years’ worth of payments in a bank account with an auto-draft for the boat mortgage. Voila! It doesn’t FEEL like monthly payments.
It’s a 15-year mortgage, so they’d need to deal with the remaining 10 years five years hence, but remember, they have the liquid assets to pay it off at any time.
In fact, Cherie reports the mortgage is almost paid off, just 2.5 years after inception!
In terms of monthly, ongoing living expenses, Chris and Cherie still work full-time. They’ve been perpetually on the road since 2006 and have their own business, working remotely as technology and strategy advisors, app developers, and authors. They are technology nomads, Technomadia.
In an August 2019 live video and post, “How do we afford it?”, Chris and Cherie explain their work and how they afford to be full-time RV and cruisers.
They address both the income and expense sides of the question.
They introduce the formula for their success, income>expense. I love it! It is the secret for everyone’s financial success…living within your means.
For years, they have tracked their expenses and published the monthly summaries for the world to see. It is great fun to compare the costs of RVing vs cruising. It is very eye opening to see how inexpensive monthly moorage costs are compared to daily rates. Their slow looping, “slooping”, has allowed them to take advantage of the monthly rates and keep costs low. Check out their live video where they discuss costs of moorage.
Their approach is definitely innovative and interesting to explore.
Bonus: Coming November 2019, watch for them on TV! They are part of a team of co-hosts on a new educational TV series, The RVers.
- Great Loop Financial Model:
- Buy boat with combination cash and boat mortgage, with invested assets available
- Alternate slow cruising and RV travel while working full time in entrepreneurial digital business
- Continue indefinitely as long as it’s still fun!
[The Technomadia blog and videos first came to my attention in 2017 when Chris and Cherie introduced themselves on the AGLCA forum and I ran across their name in the Bayliner Owners Club. After over a decade of full time RVing, which they started in their early 30s, they were transitioning to boating. Only a few months later I was up all night watching their live feed and the NOAA charts (and praying) as Hurricane Irma made a direct hit on Marathon and their boat Y-Not. Miraculously, Y-Not survived! Since then, I’ve been following their articulate, engaging, fun, educational web sites. Chris and Cherie are a real benefit to the boating community.]