Hello,
I am a 23 year old living in the Midwest who is about to buy a beautiful 1995 27 ft. Crownline cabin cruiser for $8,500. I need your help /r/personalfinance, please tell me why I'm ruining my future and making the biggest mistake of my life!
The boat
I have the opportunity to buy a well kept 1995 27ft. Crownline cabin cruiser with a 310 HP 7.1 Mericruise 454 engine for $8,500. The boat has a galley, sleeps 6, bathroom and shower, refrigerator and freezer. It runs very well but has around 850-900 hours on it. It has two new batteries and the steering bellows were replaced last year.
The boat does not have a trailer and I do not have a truck. The boat is being stored at a marina that rents dock slips for $1000 per year and offers winter storage for $20 / foot ($540 to store a 27ft. boat for the winter).
My personal finance situation:
I am a health care consultant who makes $83,000 per year and travels 90% of the time for work (M-Th on the road).
I contribute 6% of my income per pay period to my company 401k and receive a 6% match from my company to the 401k.
I have very few expenses as I spend so much time on the road travelling for work. My net income per month is around $4000. I spend $800 on rent, $100 on utilities, average $200 on groceries, $300 in restaurants/bars, $500 in shopping, $300 on entertainment and have around $1300-$1800 a month left over. I usually put the remainder ($1300-$1800) into my stock portfolio or savings accounts. I do not have a car, pay for a cell phone plan (work), or have any other expenses.
My current portfolio is as follows:
- $3,000 emergency fund
- $4,300 in savings
- $11,900 in Vanguard ETF's
- $9,800 in 401k account
(Note: Graduated college in May of 2014, portfolio of $29,000 after 15 months working).
My Emotional Justification
Some of the fondest memories I've had in my life come from my high school and college summers that were spent on a lake in the Midwest, putting around with a 19ft ski boat, enjoying warm sunny days wake-boarding, fishing, playing sand volleyball, and relaxing with friends and family.
I believe life is unpredictable and strive to make the most of every day I have on this planet. I understand the importance of saving and being frugal for the future. Yes, compound interest combined with many years of time is an amazing thing and can result in a ton of cash, but so is youth. Money will always come and go, the only thing for certain in this world is death. I would rather live an epic 60 years of life on this planet than a mundane, uneventful, 90 years.
For me purchasing this boat will be an escape from long intense work weeks, a way to bring friends and family together, a way to enjoy and appreciate nature, and a way to make some epic memories.
I do not plan on purchasing a home before I am 30.
My Logical Justification
Boat Costs in 2015:
-$7,500 in cash up front (I plan on talking the price down $1,000).
-$1,000 for a boat cover (current one is damaged according to owner).
-$540 to store boat in winter
-$500 upgrade to sound system in boat
-$35 insurance / month for 3 months = $105
Total predicted costs for 2015: $9,645
I plan on paying taking $4,000 out of my Vanguard savings account and combining it with the $4,000 in my savings to pay for the boat up front in 2015.
I plan on purchasing the boat cover after one month using part of my disposable income for the month of October.
Estimate boat costs in 2016 and moving forward:
-$1,000 to dock boat for the season
-$1,500 in maintenance
-$1,500 in gas
-$500 for winter storage
-$420 for insurance
=$5,420 per year in estimated costs
TL;DR: I think I am having a quarter life crisis... I have convinced myself I would rather buy a $7,500 boat with $5,420 / year in costs than religiously save money so that I'll be wealthy when I'm old.
What are your thoughts /r/PF? Can I pull off purchasing a large boat at the age of 23 without completely wrecking my future or am I making a huge mistake?
Submitted September 16, 2015 at 01:07AM by imbuyingayacht http://ift.tt/1if12oR personalfinance
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