I’ve seen a fair number of crew who leave yachting with minimal savings and go back to land based roles. These crew members end up struggling financially or having nothing to show for their time at sea. You need to think long term and about the bigger picture when in yachting and really take advantage of the fact you can save a serious amount of your cash. Here’s how to do it:
Pretty much every yachty rushes out to buy an Apple Mac, the new Iphone, Iwatch, Rolex, Drone or latest electrical gadget. Personally, I didn’t buy a single electrical item whilst in yachting. For me, I felt that I didn’t really need them and found it more enjoyable to actually go out with the crew or have a chat in the crew mess rather than sat behind a laptop watching a film. Chances are the Rolex would have got stolen on a night out, or the Iwatch dropped into the sea so I just didn’t see the point. Being honest, the only things I bought were a fair few pairs of sunglasses – but I felt these were needed for the job so were justifiable. Even then I lost a few pairs to the sea!
Don’t be the yachty giving it the large one with bottles of Champagne and Magnums of Rosé at the crew lunch. Spending 1000’s on booze ultimately will hurt the bank balance. Let’s be fair most crew are happy with a beer or G&T. Buying a round for your fellow crew members will probably still be less than that one huge bottle. Why waste your money on an overpriced bottle at an average over priced restaurant just to try impress your pals? I once saw someone buy a huge bottle at the Monaco GP and then start giving glasses out to random people because he didn’t have enough friends to drink it with… Don’t be that guy.
You should be aiming to save at least half your salary every month to be making any real progress with savings. I think most months I managed to save around 75% of my salary. Budget yourself a certain amount of expendable cash for each week. Thinking back, I used to budget around 100-150 Euros a week to blow on booze and trips out etc. Being honest, when you work long hours and only get one day off a week 150 Euros should be enough for that one day. Eating out should be occasional when you have a superb chef cooking for you 2-3 times a day so you should be spending minimal on food and instead saving the pennies. There are very few dry boats so often beers in the fridge can save you a few quid. Just don’t take the mick or you’ll notice they won’t be re-stocked!
There is a lot of stigma around the tax free earnings, and the best ways or loop holes to declare tax in your country of residence. I often get Green crew ask me if they need an offshore account or an accountant. My advice is usually get a job first and then worry about the rest – however being on top of Tax should be a priority if you do see yourself in the industry for a long time. Don’t keep piling the cash away and ignoring the fact there’s a large sum sat there and hoping that the tax man can’t touch it. There are multiple reputable companies that offer a service to help you complete a tax return. Usually it involves minimal paper work and hardly any evidence is required to prove you are eligible not to pay tax, especially if you are a UK citizen. Not only that, it will help you get a mortgage when the time comes.
Most banks offer minimal returns on savings. So even if you think you have the best possible rate on a savings account chances are you are only seeing a few quid every month in interest. Look further afield on how to make your money grow. Long term stocks and shares are probably a good option. Don’t expect your 5000 euros to double overnight though, this is a long game strategy. The other option would be to invest in property. Look into buying a place that could be rented. Whilst you live onboard it makes sense to have someone else paying your mortgage. Again, there are several financial advisors out there who can help you secure a mortgage regardless of whether you work at sea. I regret not buying a place when I was in yachting as in theory your salary is much higher than you are likely to earn onshore!
With all this being said you will travel to some incredible places in the world. Make sure you are having fun and don’t limit yourself on what you are able to do by being too tight with money. Chances are if you leave Yachting you may never return to some of these places so make the most of your time there. Looking back, I took for granted how lucky I was to see these places.
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