DO NOT Pay Cash For A Boat Until You Watch THIS! | BoatUS

[@PaulGeorge-y7d]

You have to account for the long term capital gains tax (20%) he would pay on those stock market gains, eating about $12k of that $60k gain. Also, no one can see the future and gains in the stock market are not guaranteed. So opportunity costs have to balanced with risk tolerance.

[@boatus]

You're correct, Paul. But that's only if you take it out at that time. And it's still way more than covering loan costs, etc. We do mention that if someone is risk-averse, this likely isn't the right strategy. But we want buyers to be aware of the available options so they can make informed decisions.

[@KeithHarrington-f4q]

Love you guys for all you do! Disagree though with the going in debt advice though. A boat is a depreciating asset. I agree with your first suggestion, pay for it upfront! Keep the videos coming! (Dave Ramsey financial follower)

[@boatus]

Thanks for the kind reply and civil discussion, Keith. We don't begrudge anyone who chooses to pay cash upfront; we just want to offer another consideration for anyone weighing their buying options. There's nothing like the feeling of owning something like a boat (or vehicle) free and clear. But no matter which philosophy you follow when buying a boat, I think we can all agree with the advice to get out there and enjoy your time on the water!

[@AdventuresofHappyOurs]

He’s 100% correct. Every financial advisor will say the same thing. Caveat - you have to have the equivalent cash you would have put on the boat invested in a high yield bond or investment to see the benefit. Also, the interest on loans for boats considered a second home (have a head, galley and sleeping quarters) is tax deductible.

[@boatus]

Thank you for underscoring/clarifying that point, Happy Ours. It's a critical aspect to this philosophy. Thanks for the awesome tip on deducting the interest! I'm sure lots of folks don't know/forget that. We hope you're having some great adventures this summer aboard your "second home" and glad the hurricane season hasn't been what was forecast (though it's not over yet -- knocking on wood!!).

[@swilliams921]

No debt, no worries, still poor! I came to this realization when I paid cash for 2 vehicles. When those vehicles were traded in for just a few thousand dollars we compared those cars to how much a single rental property we owned went up in value. That house was put up for rent around the same time my wife bought her car. The house was worth about $95k and we paid 27k for the car. Today that house is worth $207k and paid for but if we never paid cash for that car and invested the rest we would have way more. I now finance everything and put every dollar into assets. If I fall into a pinch with money, we can sell something or borrow against the assets if needed. We keep nearly enough liquid cash to pay off any one asset because this is my first time owning a boat. Not ready to get a $200k boat yet.

[@boatus]

Thanks so much for sharing your experience, swilliams. This is exactly the point we were trying to make. Some folks aren't comfortable with that strategy, and that's OK. But you learned firsthand how it can benefit your bottom line. Hope you are enjoying your boat. And hopefully you'll earn enough in investments to get that $200K boat someday if that's what you want.

[@swilliams921]

@@boatus 100%. You have the people who just boat for fun but can't afford it and want to say things like boat stands for break out another thousand. And you have the people who do it for fun and can afford or you have the fishing fanatics like me that always has that line from Jaws in their head....."We're gonna need a bigger boat."

[@ScottDoesMore]

Sounds good - gonna go buy that 100' that I was thinking about

[@DustyBootsWoodcraft]

He never even mentioned taxes or inflation…

[@TheGeoling]

Excellent financial advice, in spite of the naysayers. They should pay cash. It better suits them.

[@boatus]

Thanks for taking the time to comment, Goeling. We agree with you (obviously), but we realize this strategy comes with some risk, and many folks aren't comfortable with that. That's OK. Our goal was merely to offer an alternative to consider that might mean more money in their pocket in the long run. But what do we know? 😂

[@jerroen]

The whole US economic is sick. Everyone is iving on credit

[@boatus]

Watch it again, jerroen. We're not saying you don't have the cash and we're definitely not advising to buy something you can't afford. We're saying finance the boat and invest that cash instead. Based on history, you'll end up well ahead over the lifetime of owning the boat, even figuring in the cost of the loan. But we also realize that strategy isn't for everyone.

[@JamieBerger-s1g]

The best advice I got on boat buying nearly 40 years ago was whatever you’re looking at paying for a boat assume that money is gone. If you’re comfortable with that, buy the boat and enjoy it. If that gives you some pause for concern, don’t buy it, find another hobby you can afford. The example illustrated here is true enough with the benefit of hindsight. You could just as easily find an example where the money invested dropped 30-40% rather than grew 167%. It is a fantastic example however, for someone trying to justify buying something they desperately want, or maybe convince their spouse of something they desperately want😂. BTW, have owned boats for over 40 years now.

[@boatus]

You make a great point -- it's all about being comfortable with the potential loss. And there is something of a gamble involved. Historically it's worked out in the buyer's favor, but you're right: It might not always go that way. Boat ownership is also a gamble in some respects (we all know what "BOAT" stands for!). The enjoyment has to outweigh the down sides. Sounds like that's the been the case for you. But I'd give it to 50 years at least before you make such a rash decision! ;-) Thanks for taking the time to comment.

[@Seanhowies]

Poor financial advice

[@boatus]

How so, Sean? We are NOT recommending going into debt. Watch the video again -- all the way to the end. We are offering another option for buyers, which is to finance the boat and instead take the cash you would have spent and invest it. Over time (given historical performance), you'll come out ahead, even with loan fees, etc. It's not the right strategy for everyone though.

[@ronaldharmon9891]

Wow the "financial experts" are coming hard in the comments 😂

[@boatus]

😂😂 It would also help if they watched the entire video before commenting.

[@JohnsonBannerman]

Imagine taking financial advice from essentially a tow truck driver.

[@boatus]

I'm not sure where you got "tow truck driver." But I think you're also insulting tow truck drivers. This video merely offers another option to consider when buying a boat. You do what's best for you, your financial situation, and your comfort level. Move on if you don't agree with it.

[@jamesrobbins2708]

I find it funny how in this video put out a month ago from when I'm writing this comment, they reference a loan taken out in 2013 (11 years ago) when interest rates were low (home loans were less than 4%) as opposed to now when current boat loan rates according to google are between 6.49% and 7.99%. Given that the S&P 500 growth over the last 4 years adjusted for inflation is 7.28% it's effectively a wash. Any financial advisor will tell you past performance doesn't indicate future returns. Never take financial advice from someone trying to sell you something. This guy is nothing more than an boat industry shill used car salesmen. 🙄

[@MichalLempicki]

Debt is the modern day slavery. Come on now.

[@boatus]

Watch it again, Michal. We NEVER recommended to go into debt. We said to take the cash you would have spent and invest it instead. We realize this isn't the right strategy for everyone though, but we want to give folks another option to consider if they're in the market.

[@DoorCountyScott]

no debt, no worries except boat maintenance, this video is horrible advice. Really disappointing video by BoatUS

[@boatus]

I think you missed the point we are making, Scott. I suggest watching the video again. We NEVER recommended going into debt. We said that instead of paying all cash up front, consider financing and instead invest that cash you would have spent. Historical data shows you'll likely come out ahead and also cover your loan costs and maybe even maintenance over the lifetime of ownership. This strategy might not work for everyone, and we do offer those caveats if you watch to the end. Even though you didn't agree with the advice given, we thank you for watching and taking the time to discuss.

[@srbader]

@@boatus sorry but "consider financing" is suggesting going into debt. Didn't mean to be snarky, I am concerned about how much debt is out there and it is getting worse.

[@boatus]

Watch it again, srbader. We are NOT advising anyone to go into debt. This assumes you HAVE the cash. If this strategy doesn't work for you, then move on and do what works best for you and your situation. We merely want to give folks additional options to consider, whether you agree or not.

[@nabilchaudhry1]

Don't buy a boat, period! You have to budget for 10% of the value of the boat for maintenance EVERY season.

[@boatus]

That's another consideration, nabil. Maintenance is not cheap, and ignoring maintenance is even more costly. Boat clubs are a good option for those who just want to get on the water and not worry about cleaning or maintenance.

[@ciroromer7380]

Worst advice ever. How can these people even feel they have the wisdom to give financial advice. Buying a boat is a horrible investment. Depreciating asset that cost money and does not pay interest or dividends. Now you want to go into debt to finance it?? Stick to towing guys.

[@boatus]

Watch the video again, ciroromer. We never advised to go into debt. We said, instead of paying cash, take the cash and invest it. Based on historical data, you'll likely end up ahead in the end. You're correct: Buying a boat (or car, truck, RV, plane, etc.) is never a good investment. You purchase because it's something you want to enjoy. Investing the cash you would have paid will likely far offset the depreciation and loan costs. That said, if you're not comfortable with investing, pay for the boat outright. There's nothing wrong with that. We just want to present another option to consider.

[@boatus]

Watch the video again, jerroen. We never advised to go into debt to buy a boat. We said that if you were planning to pay cash for the boat up front, consider financing the boat and investing that money instead. Based on historical data, you'll come out ahead. That said, it may not be the right strategy for everyone, and some people aren't comfortable putting their money in the stock market. We're merely trying to let folks know there's another option to consider. Do what makes sense for your specific situation and comfort level. Thanks for taking the time to watch and discuss.

[@ciroromer7380]

Proves my point. If you finance you go in debt.

[@boatus]

ONLY if you don't have the cash to back it up, ciroromer. Take the cash you WOULD have paid and invest it instead. You'll come out ahead.

[@tkm3207]

The highest and best use of that dollar is NEVER EVER buying a boat! 😂

[@boatus]

That is indeed another viable option, tkm! 😂 That said, many folks would argue that being on the water is worth every penny.