50-60k boat purchase??

[willthrill81]

I think it’s more the psychology of leasing or paying interest on luxuries. This is how people fall into trouble. Instead of thinking about total cost, they think about monthly payments. Because of that, I too am in the camp of paying cash for luxuries (except the house.)

I agree that the psychological trappings of using credit for consumables or depreciating assets has gotten millions of people into trouble. But, in the OP's case, the financial side of it is actually fine. Does it really matter if he pays a couple thousand, at most, in interest by taking out a 20% loan on a boat?

Nope, it does not unless it leads to more and more financed purchases. Also noteworthy is that arbitraging a percent or two on low financing isn’t going to move the needle either.

This is all psychology, and it is well proven that financing a purchase gets the buyer to spend more than if they would have paid cash. Not so different as adding options on a new car purchase for just a few extra dollars a month. Maybe OP or yourself are not prone to such common psychological foibles, but the vast majority of consumers are.

I know for me, it makes a big difference which I noticed right away the first time I paid cash for a car.

I agree that the Diderot effect (i.e. one purchase leads to more) seems to be very real. And paying with credit does tend to increase the amount spent vs. paying with cash. But the OP noted that all or at least most of this purchase will be made with cash. From a math perspective, a very short-term loan isn't likely to be a problem in the slightest as long as it doesn't go beyond that. Considering that his current boat is 20 years old, I think that he'll be happy with a new one for many years to come.

[EnjoyIt]

I think it’s more the psychology of leasing or paying interest on luxuries. This is how people fall into trouble. Instead of thinking about total cost, they think about monthly payments. Because of that, I too am in the camp of paying cash for luxuries (except the house.)

I agree that the psychological trappings of using credit for consumables or depreciating assets has gotten millions of people into trouble. But, in the OP's case, the financial side of it is actually fine. Does it really matter if he pays a couple thousand, at most, in interest by taking out a 20% loan on a boat?

Nope, it does not unless it leads to more and more financed purchases. Also noteworthy is that arbitraging a percent or two on low financing isn’t going to move the needle either.

This is all psychology, and it is well proven that financing a purchase gets the buyer to spend more than if they would have paid cash. Not so different as adding options on a new car purchase for just a few extra dollars a month. Maybe OP or yourself are not prone to such common psychological foibles, but the vast majority of consumers are.

I know for me, it makes a big difference which I noticed right away the first time I paid cash for a car.

I agree that the Diderot effect (i.e. one purchase leads to more) seems to be very real. And paying with credit does tend to increase the amount spent vs. paying with cash. But the OP noted that all or at least most of this purchase will be made with cash. From a math perspective, a very short-term loan isn't likely to be a problem in the slightest as long as it doesn't go beyond that. Considering that his current boat is 20 years old, I think that he'll be happy with a new one for many years to come.

I agree with you on the first comment. I can’t comment on if buying a $50k boat will make him any happier as compared to paying cash and buying a $35k boat.

[willthrill81]

I think it’s more the psychology of leasing or paying interest on luxuries. This is how people fall into trouble. Instead of thinking about total cost, they think about monthly payments. Because of that, I too am in the camp of paying cash for luxuries (except the house.)

I agree that the psychological trappings of using credit for consumables or depreciating assets has gotten millions of people into trouble. But, in the OP's case, the financial side of it is actually fine. Does it really matter if he pays a couple thousand, at most, in interest by taking out a 20% loan on a boat?

Nope, it does not unless it leads to more and more financed purchases. Also noteworthy is that arbitraging a percent or two on low financing isn’t going to move the needle either.

This is all psychology, and it is well proven that financing a purchase gets the buyer to spend more than if they would have paid cash. Not so different as adding options on a new car purchase for just a few extra dollars a month. Maybe OP or yourself are not prone to such common psychological foibles, but the vast majority of consumers are.

I know for me, it makes a big difference which I noticed right away the first time I paid cash for a car.

I agree that the Diderot effect (i.e. one purchase leads to more) seems to be very real. And paying with credit does tend to increase the amount spent vs. paying with cash. But the OP noted that all or at least most of this purchase will be made with cash. From a math perspective, a very short-term loan isn't likely to be a problem in the slightest as long as it doesn't go beyond that. Considering that his current boat is 20 years old, I think that he'll be happy with a new one for many years to come.

I agree with you on the first comment. I can’t comment on if buying a $50k boat will make him any happier as compared to paying cash and buying a $35k boat.

Good question. I don't know. I do know that I could buy a boat for $10k that would make me very happy.

[JBTX]

We live on the lake. We currently have a 20 year old ski boat that still gets the job done (tubing, skiing, etc)..

Thinking of upgrading to a newer (not brand new) boat with less hours, better interior, few more creature comforts...to do essentially the same thing as the 20 year old boat. Looking at 50-60k range...this boat would probably last us 10+ years and be a lot of fun for the family/memories on the water etc.

Married 39 yo with 3 kids (8,6,0)

Annual income 260k
Total retirement savings = 663k
Emergency fund = 35k
529 savings = 86k

Annual 529 savings = 18k
Annual retirement savings = 50k (I've been saving an additional 3k/month in taxable the last few months)

Home mortgage 149k @ 3.125% ($750 month payment)
Rental mortgage for business/building I own 180k @ 4.75% (1616/month payment)

I could probably get 8-10k for the 20 year old boat on trade in or trying to sell in myself. I'm thinking I could save another 40k by next summer without affecting retirement or 529 contributions. That would result in me being able to pay cash or close to it for next summer. We're fine with the old boat this summer. Certainly not a need and it would temporarily stop the 3k/month taxable contributions for about a year but definitely something I've been contemplating for awhile. Any thoughts would be appreciated! Thanks.

Sounds like annual spending excluding taxes is about $100k. Seems like $100k expenses excluding taxes on $260 gross is pretty good saving.

$60000 over 10 years is $6000 a year. Not chump change but if this is a primary form of seasonal family entertainment not necessarily unreasonable. You only live once.

On the flip side $60k invested instead could be $240k or more 20-30 years down the road. It really depends on what's important. Only you can answer that.

Are there reasonable options between a 20 year old beater and a $60k boat?

[HomerJ]

I'm on the "pay cash for toys" bandwagon.

Doesn't seem like that is an option. Suze Orman...denied....

This.

If you still have a mortgage... you don't get a $60k boat.

[Are there reasonable options between a 20 year old beater and a $60k boat?

Yes... yes there is.

[sergeant]

My neighbor has a 100k boat. That's what he paid about 12 years ago. He uses about once a year for a couple days. What a waste.
I say that you should absolutely buy the boat. You and the family will use it a lot. You can afford it. Enjoy!

[smitcat]

Two best days in a man’s life are the day he buys the boat and the day he sells the boat...

Sorry you did not like boating - for us it is a great opportunity and pastime with irreplaceable memories.

I’ve never had a boat but I’ve heard it many times from people that have.

Perhaps learn for yourself first hand?

[smitcat]

Worst. Idea. Ever. Instead, join HedgeFundie's Adventure (search for thread), invest it, and buy a Yacht like the rest of us in about 20 years.

I doubt you will buy the yacht when you have the funds to do so.
Funny thing is that time waits for no-one and his kids are small and able to appreciate stuff as they are when younger.

It is unwise not to save when you are younger.
It is also unwise to wait to live along the way.
Balance will serve well in life at any point in time.

[TarHeel2002]

Sounds like annual spending excluding taxes is about $100k. Seems like $100k expenses excluding taxes on $260 gross is pretty good saving.

This is a pretty accurate estimate. 95k excluding taxes. 142k with taxes.

I agree that the Diderot effect (i.e. one purchase leads to more) seems to be very real. And paying with credit does tend to increase the amount spent vs. paying with cash. But the OP noted that all or at least most of this purchase will be made with cash. From a math perspective, a very short-term loan isn't likely to be a problem in the slightest as long as it doesn't go beyond that. Considering that his current boat is 20 years old, I think that he'll be happy with a new one for many years to come.

Interesting..the Diderot effect..I’ve witnessed many people fall victim to this. I do feel like I’d be pretty satisfied for many many years to come with a newer boat and all its creature comforts considering my current baseline boat. We do get out on the water a lot.

[smitcat]

Two best days in a man’s life are the day he buys the boat and the day he sells the boat...

Sorry you did not like boating - for us it is a great opportunity and pastime with irreplaceable memories.

That doesn't qualify a blank check. I'm sure most memories would be equivalent with a 40k boat vs a 60k boat, or even a 10k boat for that matter.

Can you buy vacation at work, how many days of vacation can u buy with the 40k saved on a boat? Go boating an extra X days.

I grew up water skiing on a 40 year old boat, I don't think my memories would be any better if that were a 2 year old boat. I'd certainly be weaker as that old boat would drag you a hundred yards before you could pop out of the water.

I guess you do not think its worth the money and effort - everyone is different.
Buying vacation time has not been much of a problem. I find that doing things while you are younger to be irreplaceable as you get a bit on in age.

[DanMahowny]

Now, it it were a Tesla boat, there would be 20 posts thanking you for saving the planet with your new $300k electric boat that's going to save you a million dollars over the next 5 years.....

There would be far more than 20 posts, but otherwise, you nailed it. Well done.

And the thread would be immediately locked as soon as anyone posted anything negative about the Tesla boat.

[SQRT]

I think it’s more the psychology of leasing or paying interest on luxuries. This is how people fall into trouble. Instead of thinking about total cost, they think about monthly payments. Because of that, I too am in the camp of paying cash for luxuries (except the house.)

I agree that the psychological trappings of using credit for consumables or depreciating assets has gotten millions of people into trouble. But, in the OP's case, the financial side of it is actually fine. Does it really matter if he pays a couple thousand, at most, in interest by taking out a 20% loan on a boat?

Nope, it does not unless it leads to more and more financed purchases. Also noteworthy is that arbitraging a percent or two on low financing isn’t going to move the needle either.

This is all psychology, and it is well proven that financing a purchase gets the buyer to spend more than if they would have paid cash. Not so different as adding options on a new car purchase for just a few extra dollars a month. Maybe OP or yourself are not prone to such common psychological foibles, but the vast majority of consumers are.

I know for me, it makes a big difference which I noticed right away the first time I paid cash for a car.

I agree. Paying cash for your luxuries accomplishes a couple of things: 1) demonstrates you can really afford it. 2) demonstrates that you really want it enough to buy it.

For example I would never borrow money to buy a Ferrari or take an expensive trip. It wouldn’t matter to me If they were offering a below market interest rate either.

[bluebolt]

I agree. Paying cash for your luxuries accomplishes a couple of things: 1) demonstrates you can really afford it. 2) demonstrates that you really want it enough to buy it.

For example I would never borrow money to buy a Ferrari or take an expensive trip. It wouldn’t matter to me If they were offering a below market interest rate either.

I have a slightly modified view of this. I shop for cars & other luxury items as if I will be paying cash for them. I.e. won't look at anything I couldn't literally write a check for on the spot. Then, I make a decision about financing based on the rate.

[tibbitts]

Two best days in a man’s life are the day he buys the boat and the day he sells the boat...

Sorry you did not like boating - for us it is a great opportunity and pastime with irreplaceable memories.

That doesn't qualify a blank check. I'm sure most memories would be equivalent with a 40k boat vs a 60k boat, or even a 10k boat for that matter.

Can you buy vacation at work, how many days of vacation can u buy with the 40k saved on a boat? Go boating an extra X days.

I grew up water skiing on a 40 year old boat, I don't think my memories would be any better if that were a 2 year old boat. I'd certainly be weaker as that old boat would drag you a hundred yards before you could pop out of the water.

I guess you do not think its worth the money and effort - everyone is different.
Buying vacation time has not been much of a problem. I find that doing things while you are younger to be irreplaceable as you get a bit on in age.

Everyone's job is different but I would say in general my experience has been that buying vacation time is either impossible or discouraged. And I think I understand that in most cases - it's just more efficient for employers to have employees at work.

[tibbitts]

Two best days in a man’s life are the day he buys the boat and the day he sells the boat...

Sorry you did not like boating - for us it is a great opportunity and pastime with irreplaceable memories.

I’ve never had a boat but I’ve heard it many times from people that have.

Perhaps learn for yourself first hand?

I think a lot of the posts here are missing the point that owning a boat when you live in a lakefront house is a completely different experience from owning a boat that you park in your driveway, and that in turn is a completely different experience from owning a boat that you have to park at a storage lot miles from your house.

[nick evets]

I think if you want to upgrade, you should. As an impatient sales rep at B&H Photo Video once told me, "Every man is his family's own accountant," when I was equivocating over a purchase....

I would just say, as a long time fisherman and boat owner, the market for used boats has been crazy over the last few years, so I'd be "situationally" ready, if the right opportunity presented itself. (And this may be shocking to non boat-owning BH'ers, but $60k is a modest amount for a boat, and barely buys a low-to-mid tier new boat, these days, in the 19-23' range).

[chrisjul]

I'm on the "pay cash for toys" bandwagon.

Doesn't seem like that is an option. Suze Orman...denied....

DITTO,,,cash or pass

[tibbitts]

I think if you want to upgrade, you should. As an impatient sales rep at B&H Photo Video once told me, "Every man is his family's own accountant," when I was equivocating over a purchase....

I would just say, as a long time fisherman and boat owner, the market for used boats has been crazy over the last few years, so I'd be "situationally" ready, if the right opportunity presented itself. (And this may be shocking to non boat-owning BH'ers, but $60k is a modest amount for a boat, and barely buys a low-to-mid tier new boat, these days, in the 19-23' range).

I agree that boats can be expensive, but not being a boat expert, I'm guessing the boat in the photo costs more than a typical boat in the same size range, but has some capability or features that other boats in the same size range (which I believe do cost less) don't? Since you mentioned cameras, maybe it's similar - to most people $2500 cameras look very similar to $500 cameras, but have some capabilities (larger, higher-resolution sensors, faster and more versatile autofocus, bigger buffers, etc.)

[willthrill81]

Two best days in a man’s life are the day he buys the boat and the day he sells the boat...

Sorry you did not like boating - for us it is a great opportunity and pastime with irreplaceable memories.

I’ve never had a boat but I’ve heard it many times from people that have.

Perhaps learn for yourself first hand?

I think a lot of the posts here are missing the point that owning a boat when you live in a lakefront house is a completely different experience from owning a boat that you park in your driveway, and that in turn is a completely different experience from owning a boat that you have to park at a storage lot miles from your house.

Many are losing sight of the fact that the OP already has a boat that his family is enjoying, so the typical pithy statements about boat ownership don't apply here. If we lived in a lakefront home, you'd better believe that a boat would be high on our priority list.

[finite_difference]

It actually stands for “Bring Out Another Thousand”

I think it depends on the boat. A fiberglass boat with a small outboard motor costs approximately $0 per year.

An antique wooden boat that needs yearly maintenance by specialists and that has a large, expensive engine = Bring Out Another (Ten) thousand.

[btenny]

I say no newer boat for now. But yes in 5-6 years. Plus that time will give you time to save up the money to pay cash. My issue is boat prices are crazy high right now and way beyond reason. Plus I think your boating needs will change (maybe a lot) in the next 4 years as your kids get older. When your 8 year old starts to water ski and wake board in earnest at 14 you may find you want a much different and more expensive wake board boat. And those boats are very expensive. Think about it.

Good Luck.

https://www.ebay.com/i/202702039999?chn ... gKHQfD_BwE

[nick evets]

I agree that boats can be expensive, but not being a boat expert, I'm guessing the boat in the photo costs more than a typical boat in the same size range, but has some capability or features that other boats in the same size range (which I believe do cost less) don't? Since you mentioned cameras, maybe it's similar - to most people $2500 cameras look very similar to $500 cameras, but have some capabilities (larger, higher-resolution sensors, faster and more versatile autofocus, bigger buffers, etc.)

I'm not familiar with inboard ski/wake boats, but yes -- I'd assume there to be some definite qualitative improvements in features and performance as you spend more. The boat should be faster, more comfortable, create a better wake for skiers...I'd expect a newer, more efficient motor, better wiring, etc, etc.

Heck, and if he buys used -- as he says he's planning to -- there's a good possibility he could sell it for MORE in the next few years. It's a really odd market, and that's my point. Maybe a lake-side neighbor is getting a divorce and would accept a quick cash sale? I agree that it's best to pay cash for toys, but if the OP is only a year or so away, keep the powder dry and be ready to 'fire' on the right deal.

[HomerJ]

We live on the lake. We currently have a 20 year old ski boat that still gets the job done (tubing, skiing, etc)..

Thinking of upgrading to a newer (not brand new) boat with less hours, better interior, few more creature comforts...to do essentially the same thing as the 20 year old boat. Looking at 50-60k range...this boat would probably last us 10+ years and be a lot of fun for the family/memories on the water etc.

Tubing and skiing doesn't require a $60k used boat. What "creature comforts" are you talking about?

A refrigerator? A cooler full of ice works just as well

Air conditioning? Make your own by pushing the throttle forward. Or if you're anchored, jump in the water if you're hot.

I'm not quite sure why you need an expensive boat to make memories.

I could probably get 8-10k for the 20 year old boat on trade in or trying to sell in myself. I'm thinking I could save another 40k by next summer without affecting retirement or 529 contributions. That would result in me being able to pay cash or close to it for next summer. We're fine with the old boat this summer. Certainly not a need and it would temporarily stop the 3k/month taxable contributions for about a year but definitely something I've been contemplating for awhile. Any thoughts would be appreciated! Thanks.

If you can pay cash for it without affecting retirement or 529 contributions, then go for it.

But wait for a deal and don't overpay.

[tibbitts]

We live on the lake. We currently have a 20 year old ski boat that still gets the job done (tubing, skiing, etc)..

Thinking of upgrading to a newer (not brand new) boat with less hours, better interior, few more creature comforts...to do essentially the same thing as the 20 year old boat. Looking at 50-60k range...this boat would probably last us 10+ years and be a lot of fun for the family/memories on the water etc.

Tubing and skiing doesn't require a $60k used boat. What "creature comforts" are you talking about?

A refrigerator? A cooler full of ice works just as well

Air conditioning? Make your own by pushing the throttle forward. Or if you're anchored, jump in the water if you're hot.

I'm not quite sure why you need an expensive boat to make memories.

I could probably get 8-10k for the 20 year old boat on trade in or trying to sell in myself. I'm thinking I could save another 40k by next summer without affecting retirement or 529 contributions. That would result in me being able to pay cash or close to it for next summer. We're fine with the old boat this summer. Certainly not a need and it would temporarily stop the 3k/month taxable contributions for about a year but definitely something I've been contemplating for awhile. Any thoughts would be appreciated! Thanks.

If you can pay cash for it without affecting retirement or 529 contributions, then go for it.

But wait for a deal and don't overpay.

When I had a boat, upgrading to just a slightly larger and different-design boat meant being able to use the boat in conditions (water, weather) that would have been impossible (or at least very unpleasant) with the older boat. If most people just looked at a picture of the two they wouldn't necessarily realize that. So in that sense it made it possible to make more, if not necessarily better, memories.

[Rrolack]

A few things:

• I'm surprised no one has asked how much home equity you have. I assume it's some non-zero amount. If so, that further improves your financial picture.

• There is a big difference between buying a used boat and, say, taking a round-the-world vacation. In contrast to the vacation, the boat will have resale value if you ever want out. This should be taken into account when deciding if you can afford to spend $X (in my opinion).

• Bogleheads tend to be biased toward delaying gratification, more so than is optimal (in my opinion). Yes, you could wait several years to buy the new boat, but then your kids would be older, and you'd have fewer years to enjoy the boat with your family.

• It looks like you can easily afford the boat even if your home equity is zero.

Best of luck with the decision.

[HomerJ]

We live on the lake. We currently have a 20 year old ski boat that still gets the job done (tubing, skiing, etc)..

Thinking of upgrading to a newer (not brand new) boat with less hours, better interior, few more creature comforts...to do essentially the same thing as the 20 year old boat. Looking at 50-60k range...this boat would probably last us 10+ years and be a lot of fun for the family/memories on the water etc.

Tubing and skiing doesn't require a $60k used boat. What "creature comforts" are you talking about?

A refrigerator? A cooler full of ice works just as well

Air conditioning? Make your own by pushing the throttle forward. Or if you're anchored, jump in the water if you're hot.

I'm not quite sure why you need an expensive boat to make memories.

I could probably get 8-10k for the 20 year old boat on trade in or trying to sell in myself. I'm thinking I could save another 40k by next summer without affecting retirement or 529 contributions. That would result in me being able to pay cash or close to it for next summer. We're fine with the old boat this summer. Certainly not a need and it would temporarily stop the 3k/month taxable contributions for about a year but definitely something I've been contemplating for awhile. Any thoughts would be appreciated! Thanks.

If you can pay cash for it without affecting retirement or 529 contributions, then go for it.

But wait for a deal and don't overpay.

When I had a boat, upgrading to just a slightly larger and different-design boat meant being able to use the boat in conditions (water, weather) that would have been impossible (or at least very unpleasant) with the older boat. If most people just looked at a picture of the two they wouldn't necessarily realize that. So in that sense it made it possible to make more, if not necessarily better, memories.

I hear what you're saying, but I don't think it's worth $30,000 or $40,000 or more.

Let me give you a concrete example. We have a $35,000 tri-toon that we use at Lake of the Ozarks in Missouri.

We don't usually go out on Saturday afternoons because the water is too rough... Our boat can't handle it very well with all the other large boats and the increased traffic on Saturday afternoons.

However, our boat is fine Sunday through Saturday mornings, and even Saturday afternoons in September or October with less traffic.

Saturday afternoons in the summer, we hang by the pool or the swim dock. We do go out Saturday evening for a sunset cruise.

It would take some serious mental gymnastics for me to justify spending $70,000 instead of $35,000 just so I could have a boat that I could use an extra 5 hours a week. Especially since I don't need those 5 hours. We already tube and ski as much as we want. We just do it on Fridays, Saturday mornings, and Sundays.

All luxury purchases hit the wall of diminishing returns.

This is a hugely important concept. Going from no boat to one boat is a big change in lifestyle. Going from one boat to a bigger boat is a much smaller change in lifestyle. Same with houses. Same with cars.

There is indeed an upgrade. You can ski and tube with my boat, but you can't wakeboard. So a bigger better boat can indeed be a real upgrade. I'm not arguing against that.

But there are diminishing returns as you move up and up. Twice as much for 30% more fun; then twice as much again for another 15% more.

Each person has to decide for themselves where to stop.

[smitcat]

We live on the lake. We currently have a 20 year old ski boat that still gets the job done (tubing, skiing, etc)..

Thinking of upgrading to a newer (not brand new) boat with less hours, better interior, few more creature comforts...to do essentially the same thing as the 20 year old boat. Looking at 50-60k range...this boat would probably last us 10+ years and be a lot of fun for the family/memories on the water etc.

Tubing and skiing doesn't require a $60k used boat. What "creature comforts" are you talking about?

A refrigerator? A cooler full of ice works just as well

Air conditioning? Make your own by pushing the throttle forward. Or if you're anchored, jump in the water if you're hot.

I'm not quite sure why you need an expensive boat to make memories.

I could probably get 8-10k for the 20 year old boat on trade in or trying to sell in myself. I'm thinking I could save another 40k by next summer without affecting retirement or 529 contributions. That would result in me being able to pay cash or close to it for next summer. We're fine with the old boat this summer. Certainly not a need and it would temporarily stop the 3k/month taxable contributions for about a year but definitely something I've been contemplating for awhile. Any thoughts would be appreciated! Thanks.

If you can pay cash for it without affecting retirement or 529 contributions, then go for it.

But wait for a deal and don't overpay.

When I had a boat, upgrading to just a slightly larger and different-design boat meant being able to use the boat in conditions (water, weather) that would have been impossible (or at least very unpleasant) with the older boat. If most people just looked at a picture of the two they wouldn't necessarily realize that. So in that sense it made it possible to make more, if not necessarily better, memories.

I hear what you're saying, but I don't think it's worth $30,000 or $40,000 or more.

Let me give you a concrete example. We have a $35,000 tri-toon that we use at Lake of the Ozarks in Missouri.

We don't usually go out on Saturday afternoons because the water is too rough... Our boat can't handle it very well with all the other large boats and the increased traffic on Saturday afternoons.

However, our boat is fine Sunday through Saturday mornings, and even Saturday afternoons in September or October with less traffic.

Saturday afternoons in the summer, we hang by the pool or the swim dock. We do go out Saturday evening for a sunset cruise.

It would take some serious mental gymnastics for me to justify spending $70,000 instead of $35,000 just so I could have a boat that I could use an extra 5 hours a week. Especially since I don't need those 5 hours. We already tube and ski as much as we want. We just do it on Fridays, Saturday mornings, and Sundays.

All luxury purchases hit the wall of diminishing returns.

This is a hugely important concept. Going from no boat to one boat is a big change in lifestyle. Going from one boat to a bigger boat is a much smaller change in lifestyle. Same with houses. Same with cars.

There is indeed an upgrade. You can ski and tube with my boat, but you can't wakeboard. So a bigger better boat can indeed be a real upgrade. I'm not arguing against that.

But there are diminishing returns as you move up and up. Twice as much for 30% more fun; then twice as much again for another 15% more.

Each person has to decide for themselves where to stop.

Of course there are diminishing returns with most everything in life, and people also do not like the same things or experiences in life.
In our case our boating activities included in excess of 65 nights a year and countless days on the water.
We also try to keep in mind that the only purpose of money is to spend it - whether that be for someone else , a charity or yourselves in the end funds have no other purpose.

[smitcat]

We live on the lake. We currently have a 20 year old ski boat that still gets the job done (tubing, skiing, etc)..

Thinking of upgrading to a newer (not brand new) boat with less hours, better interior, few more creature comforts...to do essentially the same thing as the 20 year old boat. Looking at 50-60k range...this boat would probably last us 10+ years and be a lot of fun for the family/memories on the water etc.

Tubing and skiing doesn't require a $60k used boat. What "creature comforts" are you talking about?

A refrigerator? A cooler full of ice works just as well

Air conditioning? Make your own by pushing the throttle forward. Or if you're anchored, jump in the water if you're hot.

I'm not quite sure why you need an expensive boat to make memories.

I could probably get 8-10k for the 20 year old boat on trade in or trying to sell in myself. I'm thinking I could save another 40k by next summer without affecting retirement or 529 contributions. That would result in me being able to pay cash or close to it for next summer. We're fine with the old boat this summer. Certainly not a need and it would temporarily stop the 3k/month taxable contributions for about a year but definitely something I've been contemplating for awhile. Any thoughts would be appreciated! Thanks.

If you can pay cash for it without affecting retirement or 529 contributions, then go for it.

But wait for a deal and don't overpay.

When I had a boat, upgrading to just a slightly larger and different-design boat meant being able to use the boat in conditions (water, weather) that would have been impossible (or at least very unpleasant) with the older boat. If most people just looked at a picture of the two they wouldn't necessarily realize that. So in that sense it made it possible to make more, if not necessarily better, memories.

Similar with us as well - we ended up boating for many many years on numerous boats. The boats offered a great time and have been an excellent choice for us with another boat yet in our future. Even this weekend our daughter will be having some fun and also making money as a result of her PT jobs being related to her past boating experience.

[Stormbringer]

Two best days in a man’s life are the day he buys the boat and the day he sells the boat...

+1

A corollary to that is that is the best boat belongs to one of your buddies.

When I was younger, I had friends with boats, which of course meant I had to have one too. It was a 24' speed boat with a Ford 460 King Cobra that did about 65mph. Between storage, insurance, repairs, fuel, depreciation and other expenses I figure it cost me about $500 every time I looked at it. I loved it at first, but after a few years I was so happy to be rid of it.

[PQ12$]

Hi OP - In my experience there are a lot of people who will never understand/agree on the purchase of a boat regardless of circumstances. Boating is a passion, luxury etc. that doesn't make sense unless you have that passion and the money to do it. I've had 3 boats and currently own a $250K Regulator which makes absolutely no sense to most. I forgot how old your kids are but if you are entering prime lake boat years (kids 5-20) I'd say do it. It will be a good use of money as you'll use the heck out of it. As functional as your old boat is my bet is it doesn't excite you - that is something alot of people don't understand/feel, but you might. A new(er) boat sits in the water and speaks to you for years -- get something you love to look at and are excited to jump in and go every time. If your spouse is in agreement (that is a law in our house for anything over $5K) I say buy and enjoy.

[smitcat]

Two best days in a man’s life are the day he buys the boat and the day he sells the boat...

+1

A corollary to that is that is the best boat belongs to one of your buddies.

When I was younger, I had friends with boats, which of course meant I had to have one too. It was a 24' speed boat with a Ford 460 King Cobra that did about 65mph. Between storage, insurance, repairs, fuel, depreciation and other expenses I figure it cost me about $500 every time I looked at it. I loved it at first, but after a few years I was so happy to be rid of it.
[/quote

"I loved it at first"
Times change - glad you had that great time in life.

[whiskeymike]

Similar situation here. 44 now with 3 kids 10 and under. Upgraded boat from a 2002 carburetor engine inboard to a 2013 fuel injection inboard in 2017.
Best decision I ever made.
While I could always fix the old boat on the fly. I was always fixing the old boat. Boats after 2012 are made much better like cars. They are just much more reliable.
Used boats retain their value well if maintained I sold my old one for a 1000 more 4 years after I bought it. If I sold my current one would only lose probably 10% at this point but I bought 35% off new pricing.
We use it a lot and yes we are making a lot of memories with the kids and their friends.
If you don't use it then it's probably not worth the money. For us it is. If you find yourself not wanting to go out on your current boat because it's small, It requires "work" or it's just a hassle related to the boat then I'd say upgrade
wm

[SQRT]

Of course there are diminishing returns with most everything in life, and people also do not like the same things or experiences in life.

We also try to keep in mind that the only purpose of money is to spend it - whether that be for someone else , a charity or yourselves in the end funds have no other purpose.

Agree with your sentiment (which is quite rare here). This illustrates the problem with these “should I spend $X on something” threads. I’ve said several times that you can only spend it or give it away now or later. In the end money is for spending. On what/when you spend will be influenced greatly by how much you have as well as many other factors. Someone with a relatively high net worth has a very different attitude than someone with a more modest net worth. Yet we continually try to equate our spending attitudes with others.

Someone (not me) once said. “If you spend more than me it’s a waste, if you spend less than me you’re cheap”. Maybe a little of that going on here?

[dekecarver]

It's your money, it makes sense, buy what makes you happy.

[mikemikemike]

One way to interpret the advice on this site is to remember that this is the same group that argues against spending an extra $0.5 on better ice cream...

Just buy the boat. Boats are great. You can afford it. It's not a finance question so much as a "what to do with your discretionary $". Enjoy.