Our survival requires a bit of explanation.
As you’ve come to expect, my tale has a pithy moral and financial lesson at the end.
In the summer-oriented village on Cape Cod where I grew up, there are only two types of families: Tennis families and boating families. We were the former. Meaning, we could wield a Wilson Pro Staff on clay like Excalibur, but give us the main sail in a quiet harbor and we’d run the bow straight into a dock, probably tangling up everybody’s fahkin’ lobstah pots in the process.
I recall this family history because my brother shockingly transgressed the sacred Tennis Family/Boat Family divide four years ago: He bought an 18-foot Boston Whaler, an ‘unsinkable’ vessel common to these parts.
I put ‘unsinkable’ in quotes because he nearly drowned the whole family shortly after we left the harbor.
As a finance guy, a part of my brain began to calculate the per-hour cost of boat ownership, even as we gunned the engine out of the harbor at top speed, slapping the hull from wave-top to wave-top. (Yes, I know, this is the part of my brain where fun goes to die.)
My daughters seemed to enjoy the brutal bouncing over the choppy waves well enough.
For my part, I white-knuckled the ride out. Does my brother really know how to drive this thing? Will we hit a rogue wave and my five year-old will just bounce up and over the side? Also, do I detect the distinct smell of burning money?
A close call
By his own telling, my brother hardly knows what most of the buttons on the dashboard to his Whaler do. Once out on the bay he (inadvertently I guess?) pressed a button for automatically filling up the hull with fresh sea water, (intended, we later learned, to preserve newly caught fish, but what did we know?) but he neglected to put in place the ‘stopper.’ Ocean water poured in around everyone’s feet. A hurried dash for the safety of the harbor followed. Only when we reached the guys on the dock – to complain bitterly to them about some defective hole in the bottom of the boat – did we learn that there’s a button to control the inflow and outflow of seawater. So, yeah.
Now, as I mentioned already, boat ownership and a death-defying expedition like this offer important moral and financial lessons for all of us about what not to do.
Of course, the unforgivable sin isn’t so much the near boat-sinking part. We had life vests. Nor is the central issue my brother crossing over the Tennis/Boat family borderline, as radical as that undoubtedly must sound to all of you. No, for me as the finance guy, it’s the cost of this damned thing.
I know roughly what he paid for it. I know more or less what he pays for storage at the harbor throughout the year. There’s the Spring and Fall mandatory maintenance costs, prep for the Summer season (about three months long) and Winter in storage (about nine months). Plus fuel, insurance, and tips for the harbor guys.
Here’s one of the problems: my brother can’t use it very often. The season on Cape Cod only lasts a few months. It’s only fun in a Whaler if you can go with other people, but that’s not easily arranged. His son gets motion sickness and refuses to step on the boat.
I noticed my brother’s Whaler dashboard showed 44 hours of use since he bought it four years ago. Then I calculated the per-hour costs of boating because – as I mentioned – I hate fun. I don’t know if you know this, but boating is an expensive activity. It’s a bit like golf, only if golf cost 100 times more per hour. Seriously. I did the math and everything.
The financial point here is two-fold.
First, obviously, never ever buy a boat.
A yacht-owner of my acquaintance once told me he rued the day his childhood best friend introduced him to the joys of boating. “One of the most expensive decisions of my life,” says the yacht-owner.
When it comes to boats, that’s the rule, not the exception.
Boat ownership is like taking out your net worth into the open ocean, weighing it down with stones, and making it walk the plank. Boat ownership is like wadding up a tightly packed cannonball of all your $100 bills and firing it at Old Ironsides. Buying a boat is like sending your life’s savings into the Bermuda Triangle in the midst of hurricane season.
Be the First Mate
But what if you really love being out on water? The best strategy there is to find a friend or a relative who has a boat, and be the go-to First Mate for their boating needs. The boat owner – desperate because his son never wants to go with him, or his wife doesn’t really love wake-boarding, or there’s only so many hours of silent beer-drinking-while-staring-at-the-horizon his friends can handle – will always invite you out.
As that go-to friend you’ll get all the benefits and none of the costs of boat ownership. What I’m trying to say is I think being a boat-mooching hanger-on can be a really smart financial decision.
The second more general lesson – applicable to all manner of financial situations – Don’t buy into something you really don’t understand.
You’ll end up like my brother, stabbing at buttons on the instrument panel, nearly drowning your relatives on a calm day just outside the harbor.
A version of this ran in the San Antonio Express News.
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