Will You Regret Buying a Boat?

Summertime is magical.

Snow seems like a dream it’s so far gone. It’s all about the sunshine, heat, and not having to grab a jacket on the way out the door. You go off on picnics, join a softball league, and find pristine lakes to frolic in on weekends.

We live in the state of 10,000 lakes, so boating, along with cabins up north, is de rigueur in these parts. Crazy Norwegians…

Growing up with boats was part of the drill. You name it, any kind of boat, save for a World War II battleship. We had a ski boat that was the mainstay, along with an aluminum fishing boat with a strong enough outboard Johnson to pull water skiers. Turns out 25HP is all it takes on tin can boats.

On other lakes, we sailed catamarans and sunfishes. There is something to be said for slicing through the water without the engine drone and bouncing up and down as with a ski boat. Granted, a ski boat ensures you can enjoy the lake when the wind is too light or too strong.

In later years, the family graduated to bigger sailboats. The 28-foot-plus Catalinas. These are the kind of sailboats that combine a motor with sails, so you’re never stuck if the doldrums are upon you.

The great thing about these bigger boats? You can sleep, eat, poop, and effectively live on them. They’re great for long weekends with friends, or if you’re nuts, sailing around the world.

But I digress… This isn’t a Wikipedia post about all the kinds of boats Cubert got to bop around in over the years. Instead, this is a post about why you never need to buy a boat ever, unless you’ve got money to BURN.

Why Buying a Boat Is a Bad Idea

There are all sorts of reasons you don’t need a boat. The first of which is the money. Boats aren’t cheap. Ski boats run anywhere from $25 to $50 grand for a runabout, up to the cruiser variety at $300 grand plus (think “Caddyshack”).

Big sailboats like the Catalinas we’d sail on the Great Lakes, well, those can range from $100 grand to $300 grand and up. Unless you’re a dentist awash in debt, not for YOU, Cap’n!

There’s more to owning a boat than just the purchase price:

1. Insurance: Plan to spend about 1.5% of the purchase price annually. For a $25K weekend warrior, that’s $375 per year.
2. Mooring: Unless you plan to launch every time you use the boat, you’ll need a dock or slip. That can run you $300 or more per month depending on how glamorous your lake of choice is. Figure $3,600 per year. (Or, if launching, you can buy a trailer for a cool grand.)
3. Storage in Wintertime: This varies too, but most marinas will charge you between $1,000 and $3,000 PER YEAR depending on your location and boat size. If you try to keep it in your driveway, be prepared for unhappy neighbors.
4. Maintenance: Figure anywhere from 10% to 15% of the cost of the boat, PER YEAR. Let’s tack on $2,500. That’ll cover any engine maintenance, cover repairs, speaker short circuits, navigation system upgrades, new bumpers, cup holders, etc.
5. Gas: Let’s figure $500 per season. Not only for the boat but for your big a$$ rig that you’ll need to haul this fancy piece of fiberglass around, should you choose the trailer option in item 2 above.

Let’s tap tap tap that all up, and assume we will use our muscle power to launch every time because we’re at least 5% frugal in these parts… It comes to $30,375 in year one alone. Want to know what the 10-year opportunity cost is (figuring the alternative of 7% inflation-adjusted index fund returns)? Well, I’m glad you asked. Using my handy calculator, let’s tap some more:

The 10-year opportunity cost of a $25K boat: $115,824. Gulp

The 20-year opportunity cost (if you hang on to that floating cash sink): $292,521

Should we throw in the cost of a truck to pull the trailer? Simply double those two figures above. Yep, you could be trading up over half a million dollars for a combination pickup truck/boat/ trailer. I’m getting …. light… headed…

Now I don’t know about you, but that’s a lot of money to forego for the pleasure of bopping around on the water between June and August (what is that, 25% of the year?) and mostly one day a week (Saturday or Sunday). In fairness, let’s all agree that boating is flipping FUN.

The question is, are there alternatives that can keep us financially sound and still enjoying the water during our precious summer months? Keep reading…

Why You’ll Regret Buying a Boat?

Boats are a hell of a lot of work. You can expect to put in some quality time keeping the hull scrubbed clean, the interior clean and maintained, hauling, and launching.

It all adds up. And that’s just for powerboats. With sailing, the work is about double (or triple). Maintaining the rigging, sheets, and sails alone is a monster task, especially for one person alone.

When all you want to do is go out and have fun on your new boat, remember that the maintenance and care will eat into your free time. Keeping your boat in a slip all season is ideal for avoiding the constant launching and parking ballet with every trip, but slips are not cheap!

If you buy a boat, the outlay and cost to maintain it, or keep a slip rented year after year will bury your chances of early retirement. For the pleasure of those few weekends that summer grants us, you’re sacrificing a decade or more of freedom.

And heck, during that early retirement adventure, what’s to stop you from occasionally renting a boat to create memories and have fun, without the hassle of owning it?

Alternatives to Buying a Boat (AKA: Floating Debt Anchor)

Let’s admit. Boating is lots of fun. If you’re still wondering, “Should I buy a boat?”, I can empathize with that.

My best memories from childhood are summers at the lake, whether it was the small lake where we power-boated or the big lake where we sailed on crystal blue water. Nothing goes better together than boating and beer, so long as the captain is a designated driver.

Getting pulled on skis or in a tube is exhilarating. Yeah, you can wipe out easily and get water up your nose sometimes. And that sucks. But would you rather be in a cubicle where it’s safe?

Nighttime cruises are a blast, especially when it’s super hot in July. We’d typically boat out on July 4 to check out the fireworks, and zip back in through twilight darkness. It’s an expensive way to cool off, but those were great memories.

So before I get all nostalgic and gushy to the nth degree, let’s explore some alternatives to owning a boat. These options keep you on track for financial independence while still enjoying the nectar of life on our beloved American waterways:

1. Renting a boat. This idea is gaining in popularity year over year. It’s still not cheap, but you could rent a 24-foot pontoon for $300 for four hours. That sucker can comfortably handle six people (maybe eight) so why not get two other couples and split the tab? Do this three times a season and you’re out a total of $300 (a $13,000 20-year opportunity cost, in case you’re wondering).
2. Friends and relatives with boats. Ah yes. The tried and true. If you’re fortunate enough to know anyone with a boat, be sure to accept any invites to the boat with them. And don’t show up empty-handed. YOU provide the beer, snacks, and gas money. Take them out to dinner afterward. Show some gratitude and appreciation. Anything you can do to offset their costs is appreciated because they are the ones paying through the water-soaked nose.
3. Buy a used boat as a project. This is a great idea and something my step-dad did years ago to a wonderful effect. My folks purchased an old beat-up Catalina sailboat and my step-dad spent many months refurbishing that bad boy. It was a labor of love and craftsmanship, but the final product was amazing. They sailed for several years on the Great Lakes and when it came time to sell, they had no issues. And it didn’t hurt that they’d achieved financial independence by this point! If you like to work with your hands, take on a used sailboat and save some major coin.
4. Just be at the lake. Oftentimes you just simply don’t need a big boat to enjoy the summertime. Being on the beach or out on a canoe, kayak, or paddleboard is great fun too. Our routine these days is to head out to the amazing public beaches here in our metro on a sultry weekend day. It’s fun to sit on the beach and stare at the big powerboats moored offshore, while the people from the boat soak up rays on the beach.

There’s Always a Flip-side…

Boating is fun, but that doesn’t mean you have to go out and buy a boat. If you’re seeking financial independence or an early retirement especially, look into the alternatives above. Being at or on natural bodies of water is good for the soul.

I am a child of the big water scene and will always have an affinity for lakeside fun. Nothing beats a long day of boating, beach time, grilling at the picnic table, and campfires by the water’s edge at night.

But those memories can easily be made still with rented cabins and rented boats. Enjoy the rest of the summer, folks. And if you decide to rent that boat, do your rules of the water homework first, Matey!