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How to afford a yacht if you’re not already rich

16th November 2020 Print

Many people dream of someday owning a yacht, but they never take action because they believe they don’t have enough money. In pop culture, yacht owners are often depicted as being ultra-rich, and there are many examples of yachts that are exorbitantly expensive. For example, there’s the notorious History Supreme that costs more than $4.8 billion. It owes its valuation to the fact that it’s largely made out of solid gold. 

But the truth is, you don’t need to be a billionaire to buy a yacht. Or even a millionaire. There are yachts available for tens of thousands of dollars or less, and if you have the right approach, you can secure one for yourself—with minimal impact on your lifestyle. 

Choosing the Right Yacht

To start, you need to choose the right yacht. The billion-dollar yachts will likely be inaccessible to you, and the yachts being sold for hundreds of dollars are likely junk. But there are plenty of options in between, which means you can probably find one within your budget. 

The best place to start is to look at used yacht options. Yachts and other boats tend to depreciate fast, so buying new isn’t typically a good financial move—especially if you’re working with a limited budget. Used options, on the other hand, are often as good as new, as long as they’ve been adequately cared for by their previous owners. But they tend to be sold for far less than their new counterparts. 

There are a few caveats to this. For example, before you settle on a purchase, you’ll need to inspect the boat carefully for damage. 

If you aren’t sure what type of yacht you might like, consider reviewing your options with an expert. Talk to a mentor who has purchased a boat in the past, or work with a salesperson to discover more about your needs and what’s available. 

Establishing a Budget

Once you have a few options in mind, you’ll need to establish a budget for your purchase. You can get financing for the boat, assisting your purchase, and we’ll talk about that in the next section. However, you’ll still need to come up with a down payment. 

Additionally, there are peripheral expenses you’ll need to consider as a boat owner, including: 

- Insurance. Depending on where you’re going to use the yacht, you may be legally required to have insurance. Even if you don’t need it, it’s good to have a reasonable policy to protect the value of your investment. 

- Docking fees. You’ll also need to come up with docking fees on a regular basis. In winter, if your area experiences cold weather, you’ll also need to pay for storage. 

- Fuel. Don’t forget about fuel costs. They can add up quickly if you’re yachting on a frequent basis. 

- Maintenance. If you want your yacht to continue running efficiently and last a long time, you’ll need to invest in proactive maintenance as well. 

Make sure you get an accurate estimate of these expenses before you decide to move forward with your purchase. 

Securing Financing

Once you’ve determined that you can reasonably afford a yacht, you’ll need to think about how you’re going to finance it. Unless you’re paying all in cash, you’ll need to get a loan for whatever you’re missing. Fortunately, there are many lenders to choose from. 

Make sure you shop around for the best possible terms. If possible, seek a fixed interest loan instead of a variable rate—and try to find a provider with the lowest interest rate to capitalize on lower payments. Also pay attention to the terms of the loan; longer loans tend to have smaller monthly payments, but will follow you for a longer period of time. 

Increasing Your Income

If you’ve followed the above steps and you’re still having difficulty finding a yacht you can afford, your next best option may be increasing your income. With more funds, you may be able to make a yacht fit into your budget. 

The easiest way to do this is to cut expenses in another area; you can trim your entertainment expenses, or move to a different area, and pocket the money you save in this transition. You could also work to get a raise, or pick up a side gig to earn some extra income. 

Yachts aren’t exactly cheap, but they’re much less expensive than we’ve been made to believe. With a bit of hard work and a little creativity, you should be able to save enough money to afford a great yacht—and enjoy it on a regular basis. Start by estimating your budget and choosing a yacht that fits within it; from there, everything else should fall neatly into place.