| Hi Taylor:
I'm thinking of buying a boat. I've got enough to pay cash for a decent
ship, but I'm wondering how good or bad of an investment it might
be. - Brad
Hi Brad: In this case, it all depends on how you want to define
"investment." Compared to a piece of real estate or some other commodity,
a boat is a pretty bad investment. However, if we're thinking about
your lifestyle and spending money wisely, a boat might be a great
purchase. A few things to think about:
much boating will you do? You don't buy a boat thinking about
resale value (unless it's a fix-and-flip project). If you want
to know whether it's worth the money, be honest with yourself
about how often you'll actually use it. Do you live hours away
from the nearest body of water? If so, have you thought about
how much time you'll spend hitching, unhitching, and driving to
and from the lake? Do you want a fancy sailboat that you can take
into the open sea, and do you know how to operate such a vessel?
Did you love fishing as a kid, and you're hopeful your own boat
will rekindle that love affair? The last thing you want to do
is make this purchase on a whim, so be as analytical as possible
when weighing the pros and cons.
2. "The only thing that works on a boat is its owner." Phrases
like this are popular among the boating community because there's
a lot of truth to it. While depreciating in value, the boat you
buy will also require constant upkeep. The resale value will be
better than an automobile if you keep the ship in good condition,
but doing so will take a lot of time and money. This purchase
will definitely be labor; make sure it's a labor of love.
3. Vacation for purchase. In my mind, one of the best reasons
to buy a boat is to cut back on future travel costs. Instead of
flying to some exotic destination, you load the family on the
boat for a couple of days and enjoy the thrill of camping at sea.
If it fits your lifestyle, all the time and money spent fixing
and repairing your boat might still be cheaper than what you'd
spend on other summer getaways.
| Let's take
the word "investment" out of this conversation. Think about a boat's
personal worth instead of its financial meaning. Will the experience
merit the cost? If so, enjoy that boat!
© Taylor Kovar
September 1, 2020
More "Go Far With Kovar"
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.