When is it ok to splurge?

[sco]

The best plane is to get the Boat, the only alternative is an airplane. The family will have more fun on a boat, unless you really want to travel..

If it Floats, Flys or F... Something else, it is cheaper to rent it...

It isn't always about the TCO though...

[White Coat Investor]

Now I was in a very different financial position than you are when I bought the boat. And there is no doubt the maintenance and operational costs are significant. You certainly haven't convinced me you can afford a $100K boat. But if you've convinced yourself, then sure, go for it.

Is there a rule of thumb you would use for affordability?

I always struggle with affordability. I own only one car, but I tend to get a somewhat pricey one because I enjoy driving (I have a 2015 328i). I put a lot of miles on the car, so all told I think the car costs me about $10K per year (this includes depreciation, tires, maintenance, insurance, taxes, etc.).

Of course, a boat is a different beast since it's purely for recreation. My car does double duty.

Perhaps the best one I know of is that you can max out your retirement accounts and still pay cash for it.

Don't fool yourself. If your car model is made up only of numbers and letters, 95% of your car is just like my boat!

If you can afford it, great! Enjoy. If you can't, knock it off.

Another rule of thumb is Dave Ramseys. Count up all the things you own with a motor in them. Is their value less than half your annual income? If not, it's too much money in depreciating items. I like that one too.

[anoop]

Perhaps the best one I know of is that you can max out your retirement accounts and still pay cash for it.

Do mean pay cash with income earned in any given year, or can you dip into savings?

[HomerJ]

I was going to say maybe, but then I saw you want to spend $100k (!!), so I'm thinking probably no.

How much do you save a year? $20k? $50k? $100k? If you save $100k a year, then maybe I'll change to yes. If you save $50k or less, I'm probably going to stick with no.

I bought a boat and jetski a couple of years back, but not until after I paid off the house.

We probably need actual numbers (not just percentages) to give you a real answer.

You seem to be saving very well, and you can probably afford to splurge a little. It IS important to find that balance between saving and enjoying life. But a $100k boat is a pretty big splurge. Could you start with a $40k boat? Or just rent a boat for a couple of weeks each summer?

[HomerJ]

If I want to start drawing at 59 I need about 30 times salary... I've got a year's worth now. What would be ideal?

Note you'll want 25x-30x EXPENSES in retirement, not salary.

If you make $100k a year, and you're paying a mortgage, and saving 25%, then, in retirement, you may only need $50k a year (with a paid-off house) to live the exact same lifestyle you lived at $100k salary. Social Security will cover half of that, and now suddenly your investments may only need to cover $25k a year.

Big difference.

[Lobster]

$100,000 invested for 30 years at 7% return is $811,649.75.

I always use a compound interest calculator while I consider big purchase. Recently was deciding between a used Honda Civic or new Audi. The $33k difference comes out to ~250k in retirement. I smile every day I commute to work in my recently purchased 2012 Honda Civic

[jumppilot]

I want to buy a boat - it wasn't part of the "plan".

I really want this boat but it would set me back 100k and a few years of early retirement. Am I crazy or stupid or both ?

I plan to buy a boat someday.

In the past I owned a Porsche. I ended up selling it after 3 years and it wasn't the best financial decision but, man, I had a lot of fun.

Life isn't all about saving for retirement.

Mention anything - buying a car, a boat, gold coins, a truck - and someone on this forum will have a bad story for you.

However, as a previous poster mentioned, it depends on your income. Buying a $100k boat at $200k + (and a hefty down payment) is doable but if you make $70k a year it wouldn't be wise. I'm still paying for a mistake I made when I truly couldn't afford it.

Fair winds and following seas!

[8foot7]

You're on the right track. You could within reason have anything you want. You just can't have everything. If the boat is that any thing, then go for it.

[Amarisa]

As a prior boat owner, all I can say is charter or rent.

I know you won't listen, but I'd bet a good sum of money you will come to hate the boat.

Enjoy.

I owned a nice boat and this statement is very true. I was able to rent a much nicer boat cheaper and none of the headaches. You'll be money and heartache ahead this way. Plus you can rent pretty much anywhere and never have to transport the boat. No winterizing or replacing the motors. I loved my boat for 2 years then hated it to the point of giving it away. 15 years later I rent one and love boating again.

This works unless your one of those people who would actually use the boat all the time. I know a couple people that are better off owning. Either way I would find the same or similar boat and rent it for a few weekends and see if you actually like it. Some look so cool until you spend time on them and realize they don't actually fit you or your needs. Then your stuck.

[Jags4186]

Hold up a second. Assuming OP is maxing his 18k 401k contribution his base salary is $78k. Now unless he gets a huge bonus, there is no way he will be able to afford a 100k boat.

Sorry OP I think you're crazy on this one. If you want to use a boat, rent for the time being. You will not be retiring early if you buy this thing.

Edit to add some more details:

Looks like boats are financed over a 120 month period. That means if you put 20% down and finance 80k at 3% (no idea what boat financing rates are, could be higher) you just bought a $772/mo payment + whatever other recurring charges there are on a boat.

I mean, OP, would you advise someone making 78k to go buy a 100k Maserati or Porsche? It's just insane to me that you would consider this.

[goingup]

I think my plan looks like this :
Use some money from my fun fund to rent a few times this summer and if I still want it look for a used boat

Seems like a good plan! We've owned a boat and Sea-doos. Lots of fun and lots of work, too. One rule we live by is, "pay cash for toys". I think there is less regret about owning a boat if you're not making a monthly payment while it's in storage.

[White Coat Investor]

Perhaps the best one I know of is that you can max out your retirement accounts and still pay cash for it.

Do mean pay cash with income earned in any given year, or can you dip into savings?

If the savings is for the boat then fine. If it's savings for your home downpayment or kids' college, then no.

[anoop]

If the savings is for the boat then fine. If it's savings for your home downpayment or kids' college, then no.

Thanks. Interesting thought. I don't usually have a hard budget for my living expenses and I don't usually designate savings for any specific purpose, so I didn't think of that.

[ThankYouJack]

I bought a wakeboat last Spring. It was brand new and quite expensive. Although technically it was a price point brand, it had all the performance of the fancy brands. It wasn't $100K but it was close enough that you can see it from there.

We put 126 hours on it in 4 months and I spent 5 weeks (okay, one "week" was only 4 days) at Lake Powell.

My only semi-regret? Not splurging another $5K for a (second) engine upgrade. Sometimes at high altitudes I wish I had a little more power so I could pump even more water into the boat to make the wake bigger.

You can't take it with you. If it will make you happier, and you can afford it, then buy it.

Now I was in a very different financial position than you are when I bought the boat. And there is no doubt the maintenance and operational costs are significant. You certainly haven't convinced me you can afford a $100K boat. But if you've convinced yourself, then sure, go for it.

I get tired of the numerous responses of "a boat is a whole in the water, bust out another thousand, best 2 days, etc" responses, so hearing from actual boat owners who are enjoying and using their purchases quite a bit is refreshing.

[stoptothink]

I bought a wakeboat last Spring. It was brand new and quite expensive. Although technically it was a price point brand, it had all the performance of the fancy brands. It wasn't $100K but it was close enough that you can see it from there.

We put 126 hours on it in 4 months and I spent 5 weeks (okay, one "week" was only 4 days) at Lake Powell.

My only semi-regret? Not splurging another $5K for a (second) engine upgrade. Sometimes at high altitudes I wish I had a little more power so I could pump even more water into the boat to make the wake bigger.

You can't take it with you. If it will make you happier, and you can afford it, then buy it.

Now I was in a very different financial position than you are when I bought the boat. And there is no doubt the maintenance and operational costs are significant. You certainly haven't convinced me you can afford a $100K boat. But if you've convinced yourself, then sure, go for it.

I get tired of the numerous responses of "a boat is a whole in the water, bust out another thousand, best 2 days, etc" responses, so hearing from actual boat owners who are enjoying and using their purchases quite a bit is refreshing.

WhiteCoatInvestor's financial situation is quite a bit different than the OP's. He can afford a few holes in the water where you throw money into, the OP can't.

[Detroittl]

I was going to say maybe, but then I saw you want to spend $100k (!!), so I'm thinking probably no.

How much do you save a year? $20k? $50k? $100k? If you save $100k a year, then maybe I'll change to yes. If you save $50k or less, I'm probably going to stick with no.

I bought a boat and jetski a couple of years back, but not until after I paid off the house.

We probably need actual numbers (not just percentages) to give you a real answer.

You seem to be saving very well, and you can probably afford to splurge a little. It IS important to find that balance between saving and enjoying life. But a $100k boat is a pretty big splurge. Could you start with a $40k boat? Or just rent a boat for a couple of weeks each summer?

Save around $50k on average.

[Detroittl]

I bought a wakeboat last Spring. It was brand new and quite expensive. Although technically it was a price point brand, it had all the performance of the fancy brands. It wasn't $100K but it was close enough that you can see it from there.

We put 126 hours on it in 4 months and I spent 5 weeks (okay, one "week" was only 4 days) at Lake Powell.

My only semi-regret? Not splurging another $5K for a (second) engine upgrade. Sometimes at high altitudes I wish I had a little more power so I could pump even more water into the boat to make the wake bigger.

You can't take it with you. If it will make you happier, and you can afford it, then buy it.

Now I was in a very different financial position than you are when I bought the boat. And there is no doubt the maintenance and operational costs are significant. You certainly haven't convinced me you can afford a $100K boat. But if you've convinced yourself, then sure, go for it.

I get tired of the numerous responses of "a boat is a whole in the water, bust out another thousand, best 2 days, etc" responses, so hearing from actual boat owners who are enjoying and using their purchases quite a bit is refreshing.

WhiteCoatInvestor's financial situation is quite a bit different than the OP's. He can afford a few holes in the water where you throw money into, the OP can't.

You're right. I'm leaning towards renting this season with money saved and then maybe go 3 years old Next year much cheaper.

Thanks again everybody.

[Detroittl]

If the savings is for the boat then fine. If it's savings for your home downpayment or kids' college, then no.

Thanks. Interesting thought. I don't usually have a hard budget for my living expenses and I don't usually designate savings for any specific purpose, so I didn't think of that.

I specifically earmark a "fund" for fun big purchases. I invest a little but most is in cash. It gives me something to look forward too and helps me save even more. I do a very small amount every month then 15% of my after tax bonus and any windfalls.

[Detroittl]

$100,000 invested for 30 years at 7% return is $811,649.75.

I always use a compound interest calculator while I consider big purchase. Recently was deciding between a used Honda Civic or new Audi. The $33k difference comes out to ~250k in retirement. I smile every day I commute to work in my recently purchased 2012 Honda Civic

This is what I did and it would basically cost me a few years of early retirement.

[pennstater2005]

I just bought 12 bags of milorganite. That was a splurge for me. It's all in my trunk and the car stinks to high heaven

[MrNewEngland]

I just bought 12 bags of milorganite. That was a splurge for me. It's all in my trunk and the car stinks to high heaven

That was quite the contribution, I'm sure everyone is impressed.

[pennstater2005]

I just bought 12 bags of milorganite. That was a splurge for me. It's all in my trunk and the car stinks to high heaven

That was quite the contribution, I'm sure everyone is impressed.

Awww, did you have a bad day Mr. New England? Thanks for taking the time out of your day though to respond

[HomerJ]

I bought a wakeboat last Spring. It was brand new and quite expensive. Although technically it was a price point brand, it had all the performance of the fancy brands. It wasn't $100K but it was close enough that you can see it from there.

We put 126 hours on it in 4 months and I spent 5 weeks (okay, one "week" was only 4 days) at Lake Powell.

My only semi-regret? Not splurging another $5K for a (second) engine upgrade. Sometimes at high altitudes I wish I had a little more power so I could pump even more water into the boat to make the wake bigger.

You can't take it with you. If it will make you happier, and you can afford it, then buy it.

Now I was in a very different financial position than you are when I bought the boat. And there is no doubt the maintenance and operational costs are significant. You certainly haven't convinced me you can afford a $100K boat. But if you've convinced yourself, then sure, go for it.

I get tired of the numerous responses of "a boat is a whole in the water, bust out another thousand, best 2 days, etc" responses, so hearing from actual boat owners who are enjoying and using their purchases quite a bit is refreshing.

Everyone loves their boat the FIRST year... so, sorry, you have to discount White Coat Investor's testimony...

Now, I've had a boat for 3 years, and I totally can't wait for the weather to get warm again, so that's a positive note... but, on the other hand, we just bought a jetski last summer, and I have to admit, I'm MORE excited about jumping back on our more recent purchase than that old boat.

[HomerJ]

I was going to say maybe, but then I saw you want to spend $100k (!!), so I'm thinking probably no.

How much do you save a year? $20k? $50k? $100k? If you save $100k a year, then maybe I'll change to yes. If you save $50k or less, I'm probably going to stick with no.

I bought a boat and jetski a couple of years back, but not until after I paid off the house.

We probably need actual numbers (not just percentages) to give you a real answer.

You seem to be saving very well, and you can probably afford to splurge a little. It IS important to find that balance between saving and enjoying life. But a $100k boat is a pretty big splurge. Could you start with a $40k boat? Or just rent a boat for a couple of weeks each summer?

Save around $50k on average.

Then 2 years of savings is a bit much, in my mind...

[White Coat Investor]

I was going to say maybe, but then I saw you want to spend $100k (!!), so I'm thinking probably no.

How much do you save a year? $20k? $50k? $100k? If you save $100k a year, then maybe I'll change to yes. If you save $50k or less, I'm probably going to stick with no.

I bought a boat and jetski a couple of years back, but not until after I paid off the house.

We probably need actual numbers (not just percentages) to give you a real answer.

You seem to be saving very well, and you can probably afford to splurge a little. It IS important to find that balance between saving and enjoying life. But a $100k boat is a pretty big splurge. Could you start with a $40k boat? Or just rent a boat for a couple of weeks each summer?

Save around $50k on average.

Then 2 years of savings is a bit much, in my mind...

I agree. A $100K boat seems out of line when it is equal to two years of retirement savings. By way of comparison, my boat was like 1/4 of a year's retirement savings. I wouldn't have spent as much as I did if there weren't some major new features available on wakeboats these days (surfgate if anyone cares). I would have preferred a 3-5 year old boat which is about half the price.

[likegarden]

You are single and a $100k boat will attract the opposite sex, so you did the right thing.
Otherwise, you are not a real Boglehead yet. We here enjoy not spending. After a while the need to spend big is gone forever.

[jumppilot]

You are single and a $100k boat will attract the opposite sex, so you did the right thing.
Otherwise, you are not a real Boglehead yet. We here enjoy not spending. After a while the need to spend big is gone forever.

That's awesome.

[jfn111]

I just bought 12 bags of milorganite. That was a splurge for me. It's all in my trunk and the car stinks to high heaven

That was quite the contribution, I'm sure everyone is impressed.

I was impressed. I've been looking for fertilizer that is pet friendly.

[StevieG72]

Wowee wow! 100k? I skimmed the posts and did not see if you specified what type of boat you wanted.

Buying a boat was a bucket list thing for me, I have purchased one. I have a 22' Center Console in my driveway.

Couple lessons I learned......

Buy a boat that is big enough, but not too big. There is a sweet spot for functional vs. operational costs. Bigger boats will cost more, burn more fuel, cost more to store at Marina etc. Bigger boats can burn hundreds of dollars in fuel every time you take them out! Too small of a boat and you will be cramped for space and the ride can be rough.

My boat for me hit that sweet spot.... It only costs me $130 per month to dock it at the Marina near my house, I keep it there seasonally. I did not buy a truck to tow this boat, my fishing buddy tows it for me when needed. Fuel costs are very reasonable for this boat.

I have a 1991 boat ( Pro-Sport wood free hull) with a 2013 motor ( 175 hp Suzuki 4stroke under warranty until 2020) Fully equipped with electronics, trim tabs etc. This is an ideal boat for me, new motor is reliable, older hull so I only cringe a little when it gets bumped and banged up. ( if you are a new boater you will scratch / bang up your boat, I would cry if some of the mishaps I have had happened to a brand new boat!)

I paid $15,000 for boat and trailer. The motor alone is almost worth $15,000.

I have had it for 1 season so far and no regrets. I have many fond memories of fishing trips, mishaps that we can laugh at after the fact etc.

I second the recommendation to rent for a season or two, mainly to determine what type of boat you want. Lots of folks think a cuddy cabin / cabin cruiser is awesome. It all depends on what you want to do. A cuddy cabin is great for storage or for a porta potty but when its hot outside you wont be spending much time in there. Passengers can not travel in these areas while underway, and the air conditioning equip typically only works while connected to shore power.

I would stay away from those boat club memberships. You could easily spend $25,000 + for a five year membership with nothing to show for it once it ends. Also they have many complaints about availability of boats and restrictive timeframes.

Go for it! Buy a boat! Do your research 1st and buy a boat you will be happy with that will not break the bank.

[cheese_breath]

I just bought 12 bags of milorganite. That was a splurge for me. It's all in my trunk and the car stinks to high heaven

That was quite the contribution, I'm sure everyone is impressed.

I was impressed. I've been looking for fertilizer that is pet friendly.

I bet the dogs especially love sniffing around in it.

[ThankYouJack]

I bought a wakeboat last Spring. It was brand new and quite expensive. Although technically it was a price point brand, it had all the performance of the fancy brands. It wasn't $100K but it was close enough that you can see it from there.

We put 126 hours on it in 4 months and I spent 5 weeks (okay, one "week" was only 4 days) at Lake Powell.

My only semi-regret? Not splurging another $5K for a (second) engine upgrade. Sometimes at high altitudes I wish I had a little more power so I could pump even more water into the boat to make the wake bigger.

You can't take it with you. If it will make you happier, and you can afford it, then buy it.

Now I was in a very different financial position than you are when I bought the boat. And there is no doubt the maintenance and operational costs are significant. You certainly haven't convinced me you can afford a $100K boat. But if you've convinced yourself, then sure, go for it.

I get tired of the numerous responses of "a boat is a whole in the water, bust out another thousand, best 2 days, etc" responses, so hearing from actual boat owners who are enjoying and using their purchases quite a bit is refreshing.

WhiteCoatInvestor's financial situation is quite a bit different than the OP's. He can afford a few holes in the water where you throw money into, the OP can't.

My point is that the "best two days of your life" responses don't help the OP one bit.

OP, I charter a brand new $70k wakeboarding boat for $100-$125 / hr. That includes the gas, driver, professional instruction and all the gear. If you get 10 friends together you can spend the entire day on the water for under $100 each

[White Coat Investor]

I bought a wakeboat last Spring. It was brand new and quite expensive. Although technically it was a price point brand, it had all the performance of the fancy brands. It wasn't $100K but it was close enough that you can see it from there.

We put 126 hours on it in 4 months and I spent 5 weeks (okay, one "week" was only 4 days) at Lake Powell.

My only semi-regret? Not splurging another $5K for a (second) engine upgrade. Sometimes at high altitudes I wish I had a little more power so I could pump even more water into the boat to make the wake bigger.

You can't take it with you. If it will make you happier, and you can afford it, then buy it.

Now I was in a very different financial position than you are when I bought the boat. And there is no doubt the maintenance and operational costs are significant. You certainly haven't convinced me you can afford a $100K boat. But if you've convinced yourself, then sure, go for it.

I get tired of the numerous responses of "a boat is a whole in the water, bust out another thousand, best 2 days, etc" responses, so hearing from actual boat owners who are enjoying and using their purchases quite a bit is refreshing.

WhiteCoatInvestor's financial situation is quite a bit different than the OP's. He can afford a few holes in the water where you throw money into, the OP can't.

My point is that the "best two days of your life" responses don't help the OP one bit.

OP, I charter a brand new $70k wakeboarding boat for $100-$125 / hr. That includes the gas, driver, professional instruction and all the gear. If you get 10 friends together you can spend the entire day on the water for under $100 each

I wish there were some place around here I could charter a brand new wakeboarding boat for any price. I don't know of any place that does it out here. Probably a good business opportunity there.

[ThankYouJack]

OP, I charter a brand new $70k wakeboarding boat for $100-$125 / hr. That includes the gas, driver, professional instruction and all the gear. If you get 10 friends together you can spend the entire day on the water for under $100 each

I wish there were some place around here I could charter a brand new wakeboarding boat for any price. I don't know of any place that does it out here. Probably a good business opportunity there.

I bet liability insurance and gas are the biggest expense. He partners with a major boating company so he gets a killer deal on the newest boats and may even make a bit when he sells it at the end of the season.

He's a former competitive wakeboarder and has a full-time job so just does it on the weekends. So he's probably not making a killing, but loves being out on the water, loves having a good time teaching people the sport and it's a great way to cover most (maybe all) of his boating costs. His instruction is top notch. I wake-surfed no problem for the first time and first time wake boarders I've gone with got up on their second tries.

[hudson]

I just bought 12 bags of milorganite. That was a splurge for me. It's all in my trunk and the car stinks to high heaven

Thanks for sharing! I learned something....and it's a deer repellent....so I'll try a bag....around my okra plants. 36 pounds for $13 at Lowes. It's interesting where the Milorganite comes from....
https://en.wikipedia.org/wiki/Milorganite

For the OP: I try not to splurge unless I've got my bases covered...and I try to splurge small. I can't imagine doing a 100K splurge....maybe a 3K splurge. Since I've decided not to borrow any more money, I have to pay off all splurges in 30 days.

That's just my way; I don't have a problem at all if you buy the boat.