How To Go Broke: Yachtie Edition

A harsh look at what NOT to do with your hard earned money

Nov 12, 2024

Dear yachtie investors,

This week we are taking a different approach to money matters. Sometimes it’s easier to reverse-engineer our way to a solution by starting with the problem. Luckily a very dear friend of mine with a wealth of industry experience has decided to write a piece on what NOT to do with your moola.

He prefers to remain anonymous but trust me when I say he know’s what’s up. That’s it from me- everything from here on forward is all his opinion and not that of The Yachting Investor. Enjoy!

How To Go Broke: Yachting

As I sit staring out of the window of my Mexican house, I can't help but look back at my financial history and an article I read a long time ago called “how to go broke yachting”, back then I completely ignored it as the young and stupid often do, but looking back, it was some of the best advice anyone could’ve given me. So I write this as my experience being a financial fool hoping you get a little bit out of it and avoid the mistakes oh so many of us have made along the way.

I started yachting a few months before my 18th birthday, I remember borrowing money from my uncle in the UK to pay for the train from Nice to Antibes and a week of crew housing. I had known poverty in my life and regardless of where my life was going, the one thing I was certain of was that I was never going to experience poverty again, no matter how hard I had to work for it. To this day, one of my biggest fears is to not have financial stability, but if that was the case, why did I fuck up so bad along the way?

If I had to rate my financial self for my 35 years on this planet, I would give myself a -7, I really wish I had known what I know now, but hey, it's never too late to start.

Here's the thing when you start getting close to hitting the 20 year mark in this industry, you get tired, very tired, the long days, physical work, stress and constant unknown chip away at your soul year after year and eventually well… the tree that held up all these years starts to rot.

And here lies the little detail that nobody tells you about. I have wealth, my portfolio is good, I own a few properties, I live a great life, but I have to keep doing what I'm doing for another 15-20 years If I’m to retire comfortably.

When you are in your 20s, you are invincible, but mid 30’s come along and the bullshit meter runs out. I love my job, But if I could get out tomorrow, I would run out and never look back!

And the sooner you get your shit together financially, the sooner you will be able to leave this bullshit all behind and focus on yourself.

Do not work to make money and spend it, work so you can make money and stop working. That's the secret. It seems ridiculous in your 20s but trust, this life and career, catches on quick…

Here are some of the fools I’ve met along the way:

(I’ve been every one of these.)

THE LUX CHASER

The first and most important lesson (tattoo this into your brain): YOU DO NOT OWN THE YACHT, YOU ARE THE HELP.

And I don’t say this to bring you down, but rather to keep your feet on the ground.

Don’t pretend to be part of that lifestyle, you are nowhere near and you will likely never get there. I'm not telling you to avoid ambition or enjoying the unique opportunities that the industry offers, but rather to avoid falling into the ‘luxury’ trap.

We will use ‘Timmy’ as an example, Timmy showed up in Fort Lauderdale from a modest South African family, he only knows “wealth” from what Andrew Tate has taught him on Instagram.

As he dayworks and secures semi permanent gigs, his wardrobe gets more and more expensive, he peacocks around his fuck boy buddies buying drinks, getting bottle service, he always has blow and pays for everything because ‘he's the fucking man’.

His work stints don’t last long, his mind is not at work but rather in his Instagram stories, he's working for the lifestyle, not for the growth.

As his piggy bank clasps for dear life, his spending goes from absurd to obscene, is that a Rolex on his wrist? Is that a Lamborghini he rented for the weekend? Is he flying home multiple times per year between getting fired from his lastest job?

Yes to all of them, his lifestyle inflation has ran him over like a freight train, he hasn’t even started and he’s already fucked himself.

Him like oh so, so, so many young yachties, will keep going down this path, well into their adult lives, somehow barely hanging on, spending everything they own into trying to be a part of a socioeconomic class they cant afford and do not belong in. I know guys well into their 40’s whose entire net worth is comprised of sports cars, watches and luxury wardrobes.

Some quick maths will show that if you can barely afford to keep this lifestyle up at this level for less than a third of every year, you absolutely CANNOT keep it going full time. Trying to get this lifestyle is like heroin, it will never be as good as the first time and you will always be chasing that first high. $20 RCVA t-shirts turn into a $100 Balenciaga button up, $60 night at Tap 42 turns into $1,000 nights at Club Space every weekend. It never ends and you will look back at it and have NOTHING to show for it.

This is by far the biggest trap you will encounter, the ramifications this has later on in your life are incredibly far reaching and destructive, this lifestyle will only set you back.

Step away, fuck the FOMO and let them burn themselves.

Don’t try and one up these people, let their ego flow, hell, if they want to pay for a bottle at the club, receive it with open arms, but don’t be that guy.

Luxuries are not assets and only lose value.

THE HOARDER.

Due to some very unfortunate circumstances, I found myself standing on a beach in Papua New Guinea with my dear friend Chris. He was a second engineer and I was a second officer, we both had just left/been fired from a shit-show of a boat.

We both stood there in shock of the shit pile that sat before us,

5 surfboards, 4 kite-boards, half a dozen kites, wakeboards, golf clubs, skateboards, longboards, dive gear and God knows how many pieces of luggage full of shit we accumulated over the last two years we worked together,

I’ve had crew call me years later asking if they can have my surfboard, guitar, gaming console or bicycle I left on a yacht a decade ago!

How many black bin bags full of shit do you throw away every time you do a spring clean?

BUY BUY BUY BUY BUY, day off, go shopping, Amazon purchase, go shopping, amazon purchase, BUY BUY BUY.

Most of my garage is full of my yachting friends shit they will never come back and get! Fuck, I have at least a literal ton of shit scattered around the world in friends closets and garages.

We all want to fill that void and get that gratification of being able to buy what we want when we want it but fuck me... Go through the last 6 months of banks statements, how much of it are you going to keep or brings significant value to your life?

THE EXTREME HOBBYIST EXTRAORDINAIRE

Your mind wonders, you have too much time in your hands, you are eager to learn and improve your skills outside yachting. YOU MUST KEEP BUSY!

You get into photography, suddenly you have thousands of dollars invested into cameras, bags, lenses, etc…

You get into cycling and your bike setup is past the tens of thousands of dollars.

That old Land Rover or motorcycle at home that you pour your blood, sweat and hard earned cash into every spare second of your life.

Lets not talk about the half built van you are going to drive around the USA in… one day!

We all have dreams, we all want a taste of pursuing our passion projects and looking forward to a milestone in this realm. Whether its training to do a huge cycle, buying a van and converting it to go on a South-American surf trip for a year or buying and fixing a sailboat so you can go sailing.

Our dreams keep us going, but the dreams quickly become burdens when you realise the time and capital it takes to bring them to fruition! Not only that, but life almost always changes paths, and you will almost always have new goals you will want to pursue, and the old project will be left rotting in a storage unit or sold at a huge loss.

The money you invest into these depreciating assets/passion projects will never grow.

Passion projects are not financial investments.

Using myself as an example, if I had invested all the money I’ve put into my hobby (boats) over the last 10 years, into an index fund, knowing that my end goal was to have a boat and sail around the world. Today I would be able to throw a fat portion of those dividends into a perfect, turn-key boat and use the rest of it to pay for the cruising.

Instead, I have nothing to show for it. That's money I will never see again.

If you are set to go do something, or you really enjoy a certain sport or activity or you have a project that you really want to take on, ask yourself the following questions:

How much will the asset be worth in 6 months or a year, how much can i sell it for if i can't complete it, how much will it be worth when I'm done with it?
How much is your time worth and how many hours will it take for you to achieve your goals?
Do you need to buy the absolute top of the line, why not a second hand one or last year's model?

Every dollar you put into your passion projects today is 10 dollars you are not getting tomorrow.

So is it actually worth it to go and turn a 1 dollar shitter into an 8 dollar dream in exchange for all your time?

It’s pointless having all the time in the world to do things if you have no money.

But spending all your money on something when you don’t have any time to see it through, let alone enjoy it… well that’s just fucking stupid.

ARE YOU ACTUALLY SET ON IT, UNDERSTAND THE EFFORT AND CAPITAL IT WILL TAKE OR ARE YOU JUST IN LOVE WITH THE IDEA?

Hope you enjoyed the realness!

Stay safe- talk soon!