A Yachtie's Guide to Personal Finance
My girlfriend and I enjoying some freedom!

Do you know what financial freedom is?

Yachting is possibly one of the best ways to reach financial freedom as fast as possible.

By now you I hope you have realised my passion financial freedom but if not I will attempt to demonstrate a deeper understanding of what it means in the hope you realise the potential benefits. In a nutshell though, it means being able to support your lifestyle without the need to work. In this instance, work means the typical 9-5 job that you need to support your lifestyle. Before I continue, I want to mention that this particular website is targeted towards yacht crew who might not have the ‘typical’ lifestyle and commitments that land lubbers have which can slow down progress to financial freedom.

Being FI, to me, means;

  • having the ability to be picky when job hunting
  • not worrying if you are laid off
  • being able to take time off and not eat into your savings
  • being able to volunteer
  • doing things you want to do whilst everyone else is working
  • knowing I don’t need a job
  • Basically living your best life and breaking out of the system!

And many more, but you get the idea. It essentially gives you more choices and more freedom. Time and time again I hear my yachtie friends saying they are quitting next season blah blah, but, they always come back, why? I think it’s due to the ideal lifestyle and income. Well, what if you can have that and not have to work?

How do I become financially free?

In theory, it’s easy. 4 steps. Live below your means, invest surplus money, spend wisely and avoid debt.

Live below your means

This doesn’t mean spend nothing and spend weekends volunteering for watches, it just means being smart and conscious of your lifestyle. Your salary should not be seen as a spending target.

Avoid debt

This can be a complicated one as one could argue a case for good debt and bad debt. In my opinion, good debt would be a property mortgage or student loan debt. Bad debt then would be credit card (retail) debt, car loans and such.

Invest surplus money

Next, with the money you have left over from living below your means, invest it. I advocate index funds but there are many other investing options out there. The idea is to get your money working for you.

Spend wisely

This is a hard one for some people, especially some yacht crew friends I have who tell me they own containers full of unused brand new ‘stuff’ (a friend of mine has 2 snowmobiles?!). Some people buy the latest and greatest of everything, and that is fine, as long as it gives them value. I call it value spending, I own a full kitesurfing setup plus 2 surfboards because even though its expensive, it gives me value. Really analyse what you own and determine what gives you value.

What toys I own:

– 2 Naish kites and board etc

– 2 surfboards

– 1 longboard skater

– My partner and I ‘co-own’ a gopro

What some of my colleagues own:

– 2 snowmobiles

– a Ford F350 truck

– 6 cars, including a rare Mazda RX7 and Ford Escort

– A flying boat

– 3 motorbikes

– several drones and cameras

– a brand new, never used diving drysuit

Etc etc. Of course, this isn’t all one person and its just a bit of fun, but I hope it illustrates the idea that people have a lot of stuff they never use. I like to think I live in a quite minimalistic way because I realised a while ago that I don’t need many things, I followed the wardrobe concept of, you have lots of clothes but tend to rotate through the same ones. So, I decided to get rid of the clothes I didn’t wear. My view on personal finance is similarly minimalistic as well focussing mainly on a handful of index funds but more on this later.

Anyway, those are the 4 essential steps you need to follow and it is much easier said than done, but not impossible. My goal in the next 5 years is to become partially financially free, meaning I can take off a few months per year and live off my investments and work when I need to. What’s yours?

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