We have talked about tax, disclosure of your income and also some of the pitfalls associated with both over the last month or two. Now it is time to get to the reason most of you get into yachting in the first place, SAVING money.
If you are reading this article the chances are you are probably crew on a Superyacht, if not thanks for reading anyway. Those of you who work on yachts get into the industry for two reasons, firstly because you have a love of sailing, yachting, travel or all three. Secondly, (and I know we don’t like to admit this until we have been at it for a few years) and most importantly is money. Working on a Superyacht not only pays well but due to the fact that you have no overheads or living expenses the majority of your income is disposable.
In previous articles I have covered the most important issue of the moment such as tax and disclosure of income and a great deal of you have been in touch to discuss this further. Let’s assume then that you have your tax situation under control and, if you are lucky enough to be British you should qualify for the Seafarer’s earnings deduction which will mean no income tax. As a result of this, not only do you get paid well and have no overheads, you also have no tax to pay on your yachting income. Could you think of a better situation to be in?
The answer for many is that if somebody doesn’t take money off you every month like the tax man does for those of us who now work onshore then you will spend it with little thought of the future. For myself and many others I worked with in yachting this was definitely the case. We considered ourselves very well paid and lived in the moment rather than looking at our salaries as an opportunity to build our futures.
Working on a yacht it is very easy to get a bit carried away with the lifestyle. You work for a multi millionaire, or even billionaire. You live and work on a yacht which is the very definition of an opulent lifestyle whilst visiting the most beautiful and glamorous places in the world surrounded by beautiful and glamorous people. Of course you can be forgiven for wanting to live like that. The problem is, a Superyacht lifestyle can be very expensive and the next thing you know, your large salary seems very small.
With all of the above in mind a 10 – 15 year career in yachting should see you with enough savings and investments (property or shares etc) to leave the industry with very little to worry about. Leaving yachting is a very difficult thing to do from a financial and career point of view. Many have only ever worked on yachts and, although we see our substantial skills as readily transferable to the corporate world many do not share our opinion. Therefore the big question is always “what do I do after yachting?” or more importantly “What job can I do that is either relevant to my experience or will pay me what I am used to?” Unfortunately there is no job that ticks both boxes. As a result you either take a job which is not relevant to your skills, doesn’t pay as much as you are used to, or both.
There is however an obvious alternative to the problem above. Make the most of your time in yachting. Compare yourself with your peers on yachts and at home rather than with your owner and their friends. Use your job, its great salary and incomparable benefits to your advantage and save. If you compare yourself with your friends at home who do not work in yachting how much money do they get paid every month after tax? Your salary minus that figure is how much you should be saving every month as a minimum.
Look at it another way and take 30% of your salary every month and commit it to something that you cannot touch. Whether this is a savings account or a standing order or direct debit to an investment portfolio it doesn’t matter so much as long as you can’t touch it. Where this goes and how you invest is a conversation for another time as it is something that needs to be looked at in detail. However, essentially what you are doing is committing the amount you would normally pay in tax to savings or investments. Whether this goes into property or stocks and shares is up to you but one thing is for certain you will be surprised by what you can achieve.
I say this all the time but once more can’t hurt. Working in the Superyacht industry is not for everyone. You work long hours, are forced to live with your colleagues, and have a very unpredictable life. However, in return for this you are paid well, fed well and have virtually no overheads which in turn results in a very high level of disposable income which the majority of people will never be fortunate enough to experience in their lifetimes. Make the most of this opportunity as you will rarely come across it twice in your life
I will leave you with this question. Would you rather;
1. Work hard through your yachting career, have a great time and some fantastic memories, make some clever, well informed investments and live off them when you leave yachting. Or
2. Work hard through your yachting career, have a great time and some fantastic memories and leave yachting but have to work just as hard for half the money in a job that is not that much fun.
A little bit of an exaggeration I know but if you manage your money cleverly and invest wisely you can leave the industry having had an amazing career and achieved something with your salary that most can only dream of. Doesn’t seem like such a tough choice now does it?