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Thread: When it comes to spending the money for a boat...

  1. #1
    Member Sobie2's Avatar
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    Default When it comes to spending the money for a boat...

    I am more comfortable paying cash but that knocks out a savings.
    I have a 3.25% variable Home Equity Loan set at prime (no margin either it's prime)
    Or one could go with a higher rate fixed loan for a boat (6% currently)

    I not a fan of variable rates but this makes sense to me a the moment but if you were going to spend $45-75k on a boat how would you pay for it?

    Does this change if I were going to commercial fish the boat? A Handtroll license is only $10k and then your boating becomes a business write off... fuel, boat purchase, and all.

    Sobie2

  2. #2

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    hmmm, well if that was me with those choices I would first work out what my monthly payment would be ---that I could afford, and for how long do I want to keep making payments?...then do the math and go with what is more comfortable!..as far as spending the $10,000 to get "write offs" I would not do unless I really wanted to fish for a living anyway!......I wont go into what "writing something off" really means as I live in Canada but pretty sure its not to far off from the USA!,, but the MOST important thing about borrowing money for a $45-75k boat is to make sure your SPOUSE is 100% on board!!......larry

    29' Wooldridge Pilot House, Twin 200 Hp Etecs! "...Pez Gordo..."
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  3. #3
    Sponsor potbuilder's Avatar
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    Only a write off for the time its commercially fished(not while you're playing with the boat) and you'll need fish tickets to prove it was fished, IRS (robber barons) expect you to make money with this business so don't think you can have losses forever with this business. Other thing to remember is if you can't make payments then you stand the chance of losing your home to pay off the loan this usually doesn't go over too well with the spouse !! Easy to check how long it might be fished all they have to do is look up the troll openings on the F&G site. Same goes for trolling income all it takes is a look up of your fish tickets and they know what you made & where you made it as area fished is on the fish ticket . Commercial fishing for 43 years ask me how i know anything about this. You can look up the average earnings of the hand trollers on the entry commissions website.
    If it were me i'd just pay for it out of pocket, go fishing and use those big hand troll profits to pay myself back

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    I understand the temptation for the write off but we each have choices to make. Me.....

    Scotch...no write off
    ammo....no write off
    taxidermy.....no write off
    tackle.....no write off
    tag fees....no write off
    gas, gas and more gas...no write off
    Not making what I love into a job........priceless

  5. #5

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    CASH- Nuff said

  6. #6

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    Quote Originally Posted by bawanna View Post
    Not making what I love into a job........priceless
    like that one!!....

    29' Wooldridge Pilot House, Twin 200 Hp Etecs! "...Pez Gordo..."
    18' Wooldridge Sport with 200 hp sport jet. "...Little Pez..."

  7. #7

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    I paid for my boat with a Home equity loan - the interest is tax-deductible. That's closest I will get to a "write off" cause I also do not want to "make what I love into a job"

  8. #8
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    check with credit union 1 2.99%.......

  9. #9
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    Credit Union 1 has about the best boat loans around. To take a home equity loan out for a boat is a bad idea, generally speaking if you have to take more money against your home you probably can't afford the boat. I am not judging it's just IMO on the idea I like a small house payment and if something happens in a job and you don't have it any longer its easier to make a smaller payment than a double payment with your home on the line with it.

    Sweepint
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  10. #10
    Member DMan's Avatar
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    I've always had mine with CU1. Had the last one at AKUSA. CU1 is way easy to deal with and have great rates.
    ... aboard the 'Memory Maker' Making Memories one Wave at a Time!

  11. #11

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    We're kinda old fashioned. If at all possible, we save up for things then pay cash. Much rather kill a savings account, then make payments to rebuild it than to borrow money and make the same payments plus interest to some banker and his stockholders. Over the decades it's made a huge difference in our standing to avoid paying interest wherever possible. It's OUR money, and we'd rather keep it than give it away in interest payments we can avoid. Your mileage will most certainly vary.

  12. #12
    Member 6XLeech's Avatar
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    Having the option of paying cash is ideal when available.
    I agree that when possible that avoiding the interest makes sense and including rebuilding savings after.
    My longer term calculation would include depreciation on the boat.
    Good luck.

  13. #13
    Member breausaw's Avatar
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    The last two boats we bought were financed then rolled into a refinancing home loan, lower interest rates worked in our faver. The last refinance was 3.15%, and our home mortgage is less then it was before we rolled in the boat. Next plan is to use a home equity loan for the 5 to 6k I would like to spend for new electronics, or wait tell the RayMarine E80 systems craps out.
    Jay
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  14. #14
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    I agree that cash is king to a point... but if said purchase would cause your cash reserves to go below what would be considered 6-12 months emergency living expenses then CU1 does seem to have some of the best rates on the planet.

  15. #15

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    Quite frankly, it is a bigger loss rolling your boat loan into a house payment as even though the interest rate is low, the payment in interest is very high over the time of the loan. And then there are the refinance fees that go on and on. It's expensive to refi a house. Now, if you are doing it anyway, it's still going to cost you whatever you borrowed compiled over the finance period. There's nothing free for sure and I can't imagine paying for a boat for 15-30 years. Even at 4% interest, you end paying $300,000 dollars (somewhat less, but about as there are lots of variables) or so for a $100,000 boat over the period of a 30 year loan. I don't see this as sound reasoning......more like insanity!

    Get yourself a low interest loan at the bank and get it paid for as quickly as possible so you can enjoy your boat. That means you will need around 20% down and if you can't afford this, it is probably questionable that you really can afford a boat looking through the bank's eyes. As others have noted, pay as much cash as you can.

  16. #16
    Member breausaw's Avatar
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    Mahalo and Happy Holidays
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    Jay
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  17. #17
    Member NeverLand's Avatar
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    Many credit unions will give share secured loans, you borrow against your savings, and you can't draw down your account below what you owe. Rates on these types of loans are usually sub prime and you earn interest on the total amount of your savings. As you pay off your loan you free up your savings.

  18. #18
    Member Anythingalaska's Avatar
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    I would get a personal loan for the boat, or else just pay cash. Also, as far as buying a hand troll permit and writing things off; you can only write off things you used in order to commercial fish. I have a C-hawk that I both hand troll and sea cucumber dive off of. I only write things off that pertain to my commercial fishing. When I'm out hunting, camping, etc; I cannot write off the fuel, ammunition, food, nothing. When I go out diving or hand trolling, I can write off my food, fuel, lures, line, and all gear/expenses, but if you write off more money than you're actually making, or a suspicious amount, the IRS will not be happy. My friend got audited by the IRS last year for this specific reason.

    And to the comment about not making what you love into a job...I love sport fishing and I absolutely love hand trolling. It's just as thrilling catching big kings and cohos on hand troll gear as it is sport fishing! Plus as far as work goes, if you love what you do, you'll never 'work' a day in your life!

  19. #19

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    I believe "cash" was mentioned on this thread. Write offs are only good too if you have enough of them to get above the standard deduction. But, if you are making money commercial fishing, then your taxes will be up anyways.

    Hand trolling can be a money maker if you know how to fish, and have the time to do it. Need a good investment to get into it though, and if you are doing it on borrowed money, you are pretty much pissing up a rope.

  20. #20

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    Another thing about the HT.

    Remember, that you can sport fish out of the HT boat, but you have to remove the back fin on all sport caught kings. No downrigger use in the spring hatchery openings and summer fishery. Short July king opener, and then it's cohos. No king retention when HT for cohos when it's not open. No other sport fish retention when HT fishing. ( i think you can keep halibut on a subsistence card, which you probably don't have)

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