We’ve managed to secure a liveaboard mooring and we’re going to launch the boat plan NOW – here’s how it impacts our financial independence campaign.
First: an apology from me
I’ve basically neglected you, the readers, since the start of 2023. It’s not out of spite or meanness, I assure you. It turns out that a) corporate law offshore can be as much of a thrash as it is in the city, and b) this epic plan required a lot of thinking, streamlining, details planning and all sorts of side actions to get to where we are today – and we haven’t bought the boat yet.
All the same, it’s a bit mean to leave you hanging for so long, especially when I’ve been busy. I feel a little bad about that. And, yes, I’ve been a busy boy indeed.
That all said: I hope you can forgive me and will enjoy reading about this exciting and bat shit mental unorthodox plan!
Quick recap on the Boat Plan
Long term, our Why of FI is to be able to set off to sea… and not have to return.
I’m happy to return from a life at sea out of choice. It’s not a failure if we get bored – or don’t like it – and come home willingly. It’s the choice, the freedom to decide that’s important here.
New plan: in general terms
We have secured a mooring that we rent in a marina that allows us to live on a boat as a regular home. It’s still a normal marina, so we can still sail the boat, but we basically have a permanent pitch provided we pay on time and don’t massively upset the neighbours.
The marina is still within 20 minutes of the office by bus or bicycle; Channel Islands are small places. We can therefore keep working in law and (in my partner’s case) business consultancy during the week.
We can’t set off and work remotely yet, because our dog – who we love and will not give up – won’t be welcome in most countries. We’re also not quite where we want to be as sailors and more experience would do us good.
Therefore, we’re quite happy to use the boat as a floating home Monday to Friday, with a view to getting more sailing practice for the next two years on leave and weekends. We’re going to get used to operating as a crew, navigating to places we haven’t seen (mainly northern France), and generally get more adept at living on and maintaining a boat we’re responsible for.
Long term, we’ll then be ready to sail away when the time comes.
Wait, what are you going to do about..?
Trust me: if there’s a problem to be overcome, we’ve already started working on it.
Obviously, not all problems seen as a theoretical issue are easily solved in practice. There will be a lot of friction here.
Want to let the dog out for a pee? Get your coat and wellies on, you’re going for a little walk.
Want to cook a big dinner? Try doing it as a one-pot meal.
Raining outside? You’re either getting wet or embracing life in essentially a snug bedsit.
It’s the everyday stuff that will probably be the worst rub.
Is it cheaper to live on a boat?
Yes and no.
Things that make it cheaper
Rent wise: we’re paying around £700 per month for the mooring size we need. You pay by boat length, so we’re working off a hypothetical length until the boat is bought.
Where we are, £2,300 is a cheap flat for rental. If we put in a massive deposit for a house, we’re still expecting to pay £2,000 as standard mortgage payments on a small 1-2 bed. No joke.
Boats don’t pay council tax (here that’s called “parish rates”, but the idea is the same.
Boats aren’t big spaces to heat and there isn’t actually much electronic stuff on them. Your utilities ought to be lower on a boat than for a house.
It’s impossible not to embrace minimalism when your storage space is limited to what fits in the lockers (boat cupboards) after the actual boat gear and safety stuff is loaded. Temptation to buy shiny things should be much reduced.
Oh, and we don’t need furniture. Well, not really. A boat has its own furniture built in.
But not everything is good for the wallet
Houses tend to appreciate in value. You grow equity in them, and reduce the debt by paying it off. At some point, you own a house and can sell it, release equity by borrowing against is when you get old, or simply live a cheaper life with housing costs reduced to just maintenance.
Boats don’t appreciate. They are depreciation assets, generally. Some flatline in value, but probably not the ones we’re looking at for now, and it’s very unlikely that a boat appreciates in cash value.
Maintenance costs on a boat are pretty comparable to a house, except that with a house you can live with broken windows for years whereas having to do a fibreglass repair to your hull is a very immediate problem on a floating home. The impression a lot of people get is that BOAT means Break Open Another Thousand, but those people tend to overlook the cost of replacing your windows an doors, roof repairs and replacements, boiler repair and servicing, kitchen and bathroom replacements, fence erections (heh) and myriad other home repair tasks that drain your wallet in a more traditional home.
The difference is that boat repairs are more frequent and tend to come in at high cost, whereas house repairs can be ignored, usually aren’t required for years at a time and the cost is easily forgotten about in between repairs. There’s also the outrage factor that a boat is a lot smaller than a house, so the cost feels worse.
How our financial independence campaign will be affected
New basis for our emergency fund
We’re going to hold an emergency fund that’s based on a worst-case repair, rather than the usual “three to six months’ expenses”. Our emergency won’t be that we can’t meet the mortgage: it will be that we’ve discovered osmosis in the hull, or that the engine has completely and irreparably failed, or something equally sinister.
All of those things would need to be solved without hesitation.
It basically means our emergency fund needs to be in the range of £12,000-20,000. Ouch. That’s a lot of potential growth to miss out on, but living in fear of a leak and a surprise swim would be so much worse.
Asset allocation: do we want a buy-to-let?
The fear with the boat plan is that we get to a point where we can’t do it anymore and need somewhere to live on land.
My partner is from this island. She really wants to maintain ties here. I’m not fussed, the world is a big place and there are lots of cool places to live, but I get it.
We’re now considering getting a buy-to-let flat here, which I wasn’t really interested in before. The housing market in the Channel Islands has been ridiculous of late, they just don’t have spare homes, so there is a chance that if we don’t buy a property soon we will never afford one. The rental market is pretty strong here, there just isn’t much on offer. Worst case, in the long term we can always move into whatever we have bought.
On the other hand, having a tie is a great excuse not to pursue our long-term dreams. It could also be a right pain to get back to if we’re trying to sail around and something needs attention.
Our thoughts aren’t fully formed on this one – feel free to comment below with your take on it.
Will our savings rate actually increase?
This I don’t know.
In theory, we should be able to maintain a high savings rate. Certainly, a higher one than if we were renting or paying off a HALF A MILLION POUNDS MORTGAGE (again, no joke).
What’s unclear is how much the running maintenance costs will be on the boat. It could be a lot in the early years, or it could be tiny. We just don’t have any decent sources of information on this.
I’m reasonably confident that even £10,000 of repairs per year plus the mooring fees will be cheaper than a Channel Islands mortgage, most of the time.
Holidays are planned for the next 2-3 years
We’re trying to uplift our sailing skills and we live in a dream sailing location. I sense a lot of French coastline in my upcoming summers!
That’s quite affordable compared to other potential holidays, with transport and accommodation costs dramatically reduced. Less so the wine.
We also have sailing courses we need to do, which are quite expensive but still reasonably affordable and good personal development. Nothing like investing in yourself as a hobby.
What happens if this all goes wrong
We sell the boat and buy the stupidly pricey house. A temporary but painful setback and a lesson learned the hard way.
Importantly though: we can take that hit, and that’s thanks to the financial independence campaign. Before I started taking my finances seriously, this wouldn’t have even been an option to me.
Well, hopefully we’ll never find this out.
I reckon if we make it through winter 2023 we’ll be sorted. Winters on the water are hard. Let’s see if we manage it!
Well, for now, we’re boat shopping. I’ll keep you posted.
