So, just how much does it cost to cruise?

Experiencing what can only be described as a man’s ‘young-life crisis’, twenty-one year old Andrew Godfrey puzzled over his latest dilemma: “What should I do with my life?” 

The path should have been obvious. A recent graduate with his Bachelor of Science in Chemical Engineering, a career in water treatment for industrial power plants awaited him. But he said to his girlfriend of just one year, which is me: “I need a new goal.”

I am wrapping Christmas presents as snow begins to fall in our hometown, the former Winter Olympic venue Salt Lake City, Utah, USA, 1,000 miles away from any ocean. 

I nod. “Okay, like what?”

“I need something that will inspire me, something to keep my energy up, keep me purpose driven….”

I nod more, “Okay, okay….” waiting with bated breath for what would be the most unlikely of suggestions:

“What would you think about sailing around the world?”

It does not matter that he has never stepped foot on one single sailboat in his life.

A sailor at heart will be drawn by the ‘siren song’ even across miles of barren desert and alpine mountain. But how? More importantly ….

How much will it cost?

Lucky for Andrew, he had paired himself up, not with an accountant or an actuary, or even a mathematician; he had hitched his wagon to a young and easily-agitated litigation attorney: a.k.a. a barrister in the Australian language.

While an accountant, or an actuary or a mathematician may have had easier answers for this ever important question, this litigation attorney says, as she should, “… it depends.”

“Depend on what?”  Andrew asked.

“And that is the real question, isn’t it?”  I replied.

Over the course of the next few years part of our strategy to move from land to sea involved many lessons on how to sail, but we also needed to pinpoint exactly: how much it might cost for us to accomplish such a dream; and what we were willing/able to do to make that financial goal a reality.

Quite sensibly, I thought, our first strategy involved consulting a professional.  Dressed in slacks and proper closed-toe business shoes, we sat across the desk inside a well-appointed office of a financial advisor with side-swept thinning hair, a grey suit and flabby cheeks.  He greets Andrew with a handshake saying, “welcome brother!” 

It was not long before this desert-dwelling financial man had pinpointed our financial goals; he had bad news.

He plucked at a keyboard, leaving the colourful wheel on his computer screen to spin as calculations were drawn. He turned the screen toward us to say “you will need to save one billion dollars!” Please note: all amounts discussed,
here-to-fore, are in US dollars.

We left that meeting in despair, but it did not take long to surmise he cannot be right. There are plenty of other people out sailing already, doing exactly what we want to do.  It cannot be that hard.

 

It can’t be that hard

We started reading books, magazines, and blogs to understand what the sailing lifestyle requires. At this point in time YouTube was just the sparkle in some techy-guy’s eye.

Very few sailors shared their dollar by dollar expenses, but we scoured the internet to find as many disclosures as possible. We read the accompanying blog to consider whether those cruisers seemed to live like we hoped to. Then we tried to analyse how honest/accurate their data seemed to be.

From this research, we realised the style of a sailor’s trip will determine the cost. A sailing circumnavigation on an eight metre sailboat, built in 1973 with no watermaker and a hammock for sleeping accommodations, would carry a much smaller price tag than sailing around the world on an Oyster.

There are numerous financial factors tucked inside a sailor’s personality and they all impact the budget we had to project. We realised the only way to project our circumnavigation budget is to get clear on what kind of sailors we would like to be. We compiled a list of factors to analyse, see breakout box: Factors to consider in the cruising lifestyle.

 

What kind of sailors would we like to be?

We began to analyse our spending habits on land. What is now an Excel spreadsheet began as a paper chart taped to our wall. At the end of each day we did the ‘walk of shame’, dutifully scratching our expenditures into the day’s square and feeling the pain of any frivolous expenditure. Over time, an honest appraisal of our spending habits developed.

We tried to predict the amenities we needed, or sacrifices we could make, aboard our future ship. When we started sailing we then tested our theories.

We bought a small sailboat, doing all the refit and maintenance ourselves. We went remote wilderness camping to test our willingness for various inconveniences.

We chartered sailboats of various sizes, makes and models in several locations to experience differences between boat designs and sea state. We raced sailboats as crew and learned more about the difference between sailing on racing yachts, versus slower cruising yachts.

By the time we were ready to start our boat hunt, we thought we had a good picture of our expected sailing style. See breakout box: Our projected sailing style.

We then began research on the boat we would like to purchase. We narrowed our focus to a handful of boat designs that fit our sailing objectives.

We did research in our area of the world to figure out the initial condition, purchase price, refit, maintenance and recurring costs for the boat we needed to match our sailing style. See breakout box: ‘Factors for capital investment in yacht.’

In 2009, with all this research behind us, we licked a collective finger, poked it into the wind and made a guess at which direction our budget would blow. See breakout box: ‘Predicted budget.’

 

Fill the sail kitty and cast off

We analysed our earning rate at the time and calculated how long it would take to pile up the money we needed. Using the advice of many cruising mentors, we set a cast-off date from which we could not weasel out.

There is always something more to be learned, earned, or done before sailing away. So, we pin-pointed February 28, 2016 and set that date in stone. We committed to leave whether we had the money or not.

This enforced discipline, otherwise we would set off ill-prepared. No one wants that!

By 2012 we purchased our sailboat, a 1981 Valiant 40, with what we considered to be acceptable refit requirements.
We spent weekends over the next three years touching up the refit items and practicing with our ‘other boat’ in the open ocean just outside San Diego Bay, California, USA.

Our sail kitty hit the full mark just in time and, in February of 2016, we were ready to cast off. Overall it had taken us eleven years from the start of the idea to cast off to compile the money and the skill-set to go.  yet we still wondered: would our projections hold up?

Well, did it?

In a word: no.

Our capital investment, refit and maintenance budgets have been accurate, so far. See below: ‘Capital investment and refit results.’

Our lifestyle budget, however, is currently running approximately 25 per cent higher than projected.

See below: ‘Monthly costs to date.’

Our lifestyle budget overruns are not a result of mathematical inaccuracies for cost of living in various destinations, all that usually averages out.

Instead, the problems arose in areas where we did not adequately predict our personal styles. 

First, we discovered we love scuba-diving more than we thought we would. The South Pacific has the most incredible water and unique wildlife in remote places I may never reach in my lifetime, again.

We could not pass it by without the scuba experience. I am sure we are not alone in this projection error.

The great and terrible thing about sailing around the world is that the planet is even more beautiful than I imagined. There are more ‘once in a lifetime’ opportunities than could ever be snatched up. So we must accept we cannot see and do everything. Even if we had all the money in the world, it still would not be possible.

Second, we are travelling more slowly than projected. Our projected speed and course of our sailing circumnavigation proved itself to be inadequate by about the second major stop we made.

As Americans with professional careers, we were used to having two weeks of vacation at most. We projected the speed of our exploration route based upon this perspective. “Won’t it be great to spend two whole weeks sailing around French Polynesia?” We thought.

It was not long before we realised that our style of cruising requires an even more relaxed pace.

Two weeks might be enough to rest up from passage, find a place to get our laundry done, stock up on provisions and maybe explore one, maybe two, islands. That time frame is insufficient to do the whole of French Polynesia justice.   

Furthermore, Sonrisa has her own pace that she demands. Often she needs repairs as any cruising yacht will.

Usually, Andrew has accurately projected his maintenance schedule and we have spare parts with us on board, but sometimes an obscure piece breaks, or a piece that we did not predict will break at this particular time has problems, so then we must figure out how to acquire a new part from afar. One such case recently had us stalled in Langkawi, Malaysia for an entire year!

While we had projected funds for the yard costs, labour and parts expected during a mid-circumnavigation refit, we did not realise we should build in an entire extra year worth of time.

We should have realised that if you miss the weather window open for a particular ocean crossing, you have to wait another six months until the cyclone season shifts for you.

We are coming to terms with the fact that our five-year circumnavigation looks like it may take six or seven. More time; more money.

Third, we predicted that we would need to return home to visit family and friends twice during the course of the trip and we planned to tuck those expenses into our regular monthly budget. This projection, too, was inaccurate.

The first year of sailing was such a shift in my lifestyle that, by the time we reached the end of the sailing season in the South Pacific, I needed to return home to visit my family, meet our newest niece; plus, reassure myself that I am okay with the balance of time devoted to sailing and distanced from people I love.

I now know my willingness to miss out on weddings, new babies, graduations, my father’s retirement and, worst of all but hopefully not, funerals, is lower than I first anticipated. If I had this to do over again, I would insert enough money to fund flights home least once per year, per sailor.

Fourth: we recently adopted a ship’s cat along with the expenses she entails.  I am usually allergic to cats, so she was never in the projected budget.

I now know these ‘errors’ are to be expected. It is impossible to fully predict every element of your sailing trip, personal style and the future.

Learning about ourselves and working with the resulting serendipity is a part of why we went sailing in the first place.

 

Various margins of error

We were overbudget, but we still did not panic. Why not?

Luckily, back when we were compiling other sailor’s expense reports, we noticed many admitted to editing out ‘exceptions’ they did not include in their disclosures. They deleted expenses associated with trips home, unexpected major repairs, or their personal hobbies, assuming those to be outliers that would not translate to other people’s sailing experience.

We became convinced that these outlier expenses appear in every sailor’s life. So, we prepared with a built-in a margin of error.

When we set our calculated budget, savings rate and our cast-off date, we tried to remain conservative. We calculated our savings rate assuming we would never get a raise during the remaining course of our career before castoff; so any raise felt like an added bonus we could add to our sailing fund, just to be safe.

Plus, we set our cast-off date six months further out than the actual date we thought our finances would be ready. We did not spend the extra money, but socked it away for our ‘fluff budget’. This extra fluff did not have any line item attached to it, as by definition, it was intended to be used for the unpredictable expenses.

If I had this to do over again, I may also build in a two to three per cent factor for cost of living increase.

Projections done during 2007-2011 and prior seemed to indicate we could not spend $4,000 per month in the South Pacific if we tried; there just was not anything to spend money on there. Once we arrived, we found restaurants, tour guides, scuba opportunities and all manner of tourism ripe for the spending.

What once were remote destinations now have growing tourism industries that are finding ways to charge sailors for their experiences. The world has advanced measurably since our projections were first penned. We are glad we cast-off holding approximately a 15% margin of error in our financing. 

 

It’s all about the adventure

In addition, as we sailed, unexpected opportunities have come our way. A consulting contract here or there, publication of a book, the strong dollar, a favourable stock market, recovery in the housing market from the 2009 mess we found ourselves in, all included.

None of these are enough to keep us sailing forever but, just like finding a lucky Yamaha 5HP outboard propeller tucked away on the jumbled shelf of a Chinese parts shop, sailing life is not always unexpected expenses. Sometimes it brings gifts of income to offer one small shovelful into the pit of expense.

So far, these opportunities have kept us within the averages required to get home.

We undertook this circumnavigation as a sabbatical, rather than waiting for our full retirement or trying to remain employed along the way. We plan to return to work at its conclusion.

There are reasons for this. We did not want to risk losing the opportunity due to loss of health or an untimely death. It is the ‘go as soon as possible’ approach.

We made that choice knowing the strategy carried risk, including vulnerability to insufficient funding. So, what?

What if we only make it three quarters the way around the world, then must stop and work somewhere until we can fund the remaining route? What if we must drop our lifestyle demands and alter our trip to sacrifice more expensive land tours, scuba diving, eating in restaurants, or (gasp) our rum rations, until we reach our home port?

Those strategies will be part of the adventure. We will figure it out. 

Is that not that the skeletal bone underpinning all sailing voyages?

A sailor must trust him or herself to find a way. 

 

Costs considered for desired cruising lifestyle

  • Desired insurances
  • Expenses associated with keeping ties to land
  • Size, make, style, age, and condition of desired boat
  • Cost of maintaining the boat and all equipment
  • Cost of maintaining and using amenities on the boat
  • Expected frequency of routes or sailing speed likely to increase equipment failure
  • Cost of keeping the boat + crew in a location
  • Expected use of fuel/energy consuming equipment & amenities
  • Cost of communication, navigation, weather prediction subscriptions/equipment
  • Frequency of changing sailing location
  • Cost of sailing location
  • Cost of maintaining clothing and aesthetic appearance
  • Cost of maintaining crew health
  • Cost of additional hobbies (scuba, windsurfing, photography,
  • blog/vlog,etc.)
  • Cost of dining out
  • Cost of purchasing specialty foods to keep on board
  • Alcohol budget
  • Cost touring away from the boat and/or traveling home
  • Work as you go, take a sabbatical, or hope to retire fully.

Factors considered for capital investment in a yacht

  • Purchase price of yacht
  • Initial refit costs predicted to be Insurance 50% of purchase price
  • Ongoing maintenance at 10% per year
  • Follow up refit costs at 25% every 3-5 years
  • Costs prior to set-off date: marinas, registration etc.
  • Insurance: set at 1% to 5%.

Our projected sailing intentions

  • Five year sailing circumnavigation
  • Current budget for dining out, groceries, clothing and regular living costs to be retained
  • Maintain all personal insurances, inc. yacht, disability and evacuation insurances.
  • Purchase 80s to 90s bluewater cruising yacht
  • Sail as a couple with no extra crew required
  • 75% sailing done in tropical waters
  • Transit Panama Canal
  • 75% of all refit and maintenance to be handled by us
  • Engine, water maker, fridge/freezer, autopilot, daily showers and oven are all required necessities
  • Avoid marinas where possible
  • Even out expensive and inexpensive destinations.

Predicted budget

 Based on a 3 year preparation cost and a 5 year circumnavigation

Yacht $125,000
Refit and capital investment $65,000
Maintenance set at 10% per annum  
Living expenses $48,000/yr
Half-way circumnavigation refit $36,000
TOTAL $538,000

 

Capital investment results to date

Purchase cost $124,154
Price $112,000
Surveys $960
Lender's fees $694
Marina deposit $1500
California sales tax

$9,000

Preparation costs 2012 to 2015 $37,049.97
Slip fees $749/month
Insurance $309/quarter
Bottom clean $45/month
Electricity $10/month
California property tax $1190/year
Pre-departure maintenance $12,617.01
Initial capital improvement refit $54,054.78
Total initial capital improvement investment $227,875.76
Mid-circumnavigation refit $35,674

Captain's labour costs were free. Regular mainenance and spare parts costs were included in monthly budget.

Circumnavigation cost results to date

Estimated at $48,000 per year  
Actual 2016 (10 months to date) $47,908
Actual 2017 $61,018
Actual 2018 $53,705
Actual 2019 (inc. mid-circum refit) $58,834
Total, 46 months sailing, excluding refit $232,943

Leslie Godfrey
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