After our meeting with the Sidesweep, I felt uneasy, cast adrift. We have so many financial factors at play: school loans, house mortgage, the need to save for real retirement, sailing…I need a plan. All I wanted was for someone to tell me what I should do. If you tell me what to do, I will do it. I don’t want to wander around messing everything up over and over again, only to find that we have failed to save what we need and can’t make our goal come to fruition.
I schedule lunch with a handful of different financial advisors. My opening salvo always starts with “I want to sail around the world at 45” to test the water and see where this person goes. None of them focus. They all use the same retirement calculator to explain how I will need millions and millions of dollars saved to accomplish our plan. “Just put your money in this fund that I sell and that guy over there manages, and we will get you the rate of return you need.” 15% or higher seemed to be their favorite number.
I became a little suspicious; 15% seems really optimistic. I started reading about investing. There, I learn that average rate of return over a lifetime is 10% before taxes and once you calculate expenses, fees, and taxes normal returns drop to 7% or even lower, especially when invested in an actively managed fund. That does it. These guys are just blowing smoke up my skirt; I am not a fan.
I start whirling around in a dust cloud of anxiety. Without a clear path to get from where I am to where I want to be, I feel panicky.
WHO IS GOING TO HELP ME MAKE THIS PLAN?! No one, actually.
Hard Fat #5: No one is going to do this for us.
As far as I could tell, there is no fancy financial planner out there who could listen to our goals, help us define what is realistic, help us do research, and prepare a savings or investment plan that dealt with our unique debt-sailing-sabbatical-retirement-savings agenda. We were on our own.
“We can just figure this out ourselves.” Andrew says during one of my fits of negativity.
I can do it myself? I guess so. Why not? I can learn anything. I can think and figure out what it is I need to know. I can read books, enlist mentors, make a plan and try it out. I can note what I learned with the first attempt, then revise and refine a plan, can’t I?
And it is in this moment that our bid to go to sea provided me with the seed of a life lesson that would make me a better, more competent person. I can figure it out myself. It's good we learned this lesson first; as I sit here on my sailboat, I realize we had to learn this lesson before setting off to sea anyway. When you are 1500 miles from any other human, no one is going to do anything for you, at all. You have to figure things out for yourself.
So, we got to work. What is it exactly that we are trying to figure out? What do we need to research?
We opened up the Google-Box. “Tap, tap, tap: Sail around the world.” In response, Google sent us to www.bumfuzzle.com.
Bumfuzzle is a blog describing Pat and Ali Schulte’s travels around the world. At the time, they were a large portion of their way around their own circumnavigation in a catamaran. Pat is blunt, honest, and detailed in his posts. Previously being a short term investment trader on the commodities stock exchange, he has an eye for money. So, he provided a penny by penny account of how much it cost he and Ali to complete their trip.
We studied the Schulte’s spending records, and it turned out they spent on average about $3,100/month. They include every penny from every category. We knew their averages covered tacos, pizza and beer the world over, but they didn’t spend any money on insurance. They covered general boat maintenance, but did not cover major capital boat projects. It covered tourism and land activities, but they were not scuba divers so it did not cover any scuba diving. It took the Schulte’s 44 months to finish their trip, an average of $3,100 per month, for a total of $136,434 total, plus the cost of boat and boat infrastructure.
Fun Fact #1: Big dreams can usually be accomplished much, MUCH more cheaply than you first imagine.
Now, we had a number to aim for and tweak for our own habits and uses. We also had a rough sailing track and estimate of time it would take to sail that track. In what would become almost a nightly habit, we walked our neighborhood discussing what we had learned that day, what it meant for the plan, and how it would apply to us. “Yeah, we can definitely save up $137,000 over time, and whatever we can pay down on our mortgage/increase in value on the house can cover the boat.” Andrew says, “I knew we didn’t need millions of dollars!”