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Posted on Dec 21, 2012 | 0 comments

Even the Best Laid Plans

In any major venture in life, honest and objective evaluation must constantly be part of the planning. That is especially true for us as we try to make decisions regarding our finances and how best to provide for our dream of cruising. When we first started making plans for cruising, we estimated that we would require approximately $1000-$1500 per month for basic necessities and boat maintenance. Using this estimate, we calculated that we would like to have around $70,000 in hard savings in addition to whatever money we decided to use for a decent boat. That would give us a very comfortable 4-5 years of savings that gave us plenty of options for continuing just by adding small amounts of income from scuba diving and other odd jobs.

Then came the wait. Three to four years starts to feel extremely far away when you are constantly reading and learning about how amazing that life could be, and when the cruising experts all say to go cheap, simple, and as soon as possible. And so, we decided to move up our intended departure date to the fall of 2013. We would sell our house and use the equity to buy a boat, and hopefully save enough money to have only two years instead of five in reserves.

That brings us to today, when the honest evaluation comes in. Our house has sold and we are six months into this phase of saving. At closing, we will be receiving around $40,000 from the equity of our house. We have also saved just under $10,000 in additional cash for our kitty. It might sound like a lot to be sitting on, but we’re honestly a little less than excited about it. If you’ve ever been boat shopping, you will note that there aren’t many family friendly boats on the market for only $40,000, especially if we want to do more than coastal cruising.

After the long, hard look at our money, we’ve decided that we need to make our money work a little harder to be able to meet our goals. The way we plan to do that is by purchasing two houses immediately which we will rent out to increase our monthly income while cruising. We will live in one while saving our kitty and rent the other as soon as possible. If all goes well, we will add 2-3 more by the end of the year. The much lower mortgage payment will also allow us to save more every month towards our goals.

While our new plan may not get us on a boat in the next year, we are very confident that it will give us much a higher chance of success and that still within the original time frame. What do you think about our new plan? Let us know in the comments below!

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Posted on Dec 5, 2012 | 0 comments

We sold our house… now what?

Last Thursday Michele and I received the call that we had both hoped would come, but had nearly given up on… a legitimate offer on our house. The offer was over 9% less than our asking price but at least we had some action! Let me back up a bit… We had grown disheartened at the numerous showings, followed by exceptionally minimal second showings, followed by a complete lack of offers. “The street is too busy,” “loved the house,” “buyer showed interest,” “great kitchen!” were all followed by a noted lack of action on the buyers’ parts. With that in mind, you’ll understand why we were excited to get any offer (even one that was almost 10% lower than asking price). We had talked about the price and had settled on 93% as our lowest acceptable price, definitely in range for this buyer. Our goal was 97%, however. After a few tense rounds of negotiation we were able to come through with our exact goal… right on the dollar.

We now are faced with weeks of inspections, tests, and (hopefully not) the possibility of more negotiations over any requested repairs. Our house is in exceptionally good condition so any requested repairs are most likely nit-picky (that doesn’t sound biased, does it?). Thankfully we were able to get the buyer to agree that no repairs would be made as a result of these inspections.

We looked at each other once the last counteroffer was accepted and Michele said what we were both thinking, “Now what?” We had been focused so much on getting our house sold that we hadn’t thought about the actual possibility of it selling. Crazy, I know. Now we are at a cross roads. We can find an acceptable apartment for a couple hundred dollars less than we were spending on our house, providing a decent boost to our future cruising kitty. We can also purchase a “starter/rental” house and spend almost nothing, we’re talking less than a normal car payment here, per month. The second option saves money over time but is also the riskier option. We would have the opportunity of renting the house after we are done with it, or selling it and (hopefully) making a profit. There is, of course, that nagging possibility that it wouldn’t sell or sell for less than we bought it for. Either way the bottom line is we are making progress.

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