Most yacht crew have some time off each year and a lot of you, as I am sure you will agree are the envy of all your friends “back home”. You go home on holiday looking really healthy with a bit of a tan and on top of that have all sorts of glamorous and exciting stories to tell your friends. They all LOVE what you do, sailing billionaire’s yachts to the best places in the world, surrounded by super rich people. Throw in a few charters a year with some real A list celebrities and all your friends hate you, for the right reasons of course.
Obviously you try to argue that it is very hard work, you can do some really long days and are at the beckon call of owners and guests but that bit all falls on deaf ears. Your friends are all quietly wishing they had the guts to get out there and give it a try rather than ending up with a depressing job in a call centre.
Add to this the fact that you get paid well, have no living expenses (which means 95% disposable income) AND pay little or no tax and your friends really don’t know whether to love you or hate you. They are all thinking “not only have you got a great job, travel, meet interesting people, get paid well and pay no tax, but you will be set for life with the head start a job in yachting has given you”. You really are living the dream. Not only that but when you leave yachting you will either be set for life financially or be able to retire! What a great life, isn’t it? Well…………. isn’t it?
At this point a lot of you are shuffling your feet and mumbling things to yourself about tax and investments and making excuses as to why you haven’t done anything yet. That massive bar bill in Monaco, the new watch you “needed”, that really nice rental car when you went home last and all sorts of other reasons why you are not as far ahead financially as you and I both know you should be. It’s easily done, but how long are you going to make excuses instead of actually doing something about your future?
So, if your friends at home see your job as a golden opportunity, why don’t you? Why is it that so many yacht crew are not looking to their future and what their life in yachting can do for them? There are a few reasons for this and, speaking from experience they are one or a combination of the factors below;
- You work in a world built on extreme wealth and as a result it is very hard not to get caught up in the lifestyle. No, you aren’t a billionaire but it is easy to feel like one when you live an all expenses paid life on a superyacht
- Having such a high level of disposable income is very hard to get used to, or should I say very easy! You can afford things which you would normally have to save for and, as a result you can easily get into the habit of buying expensive “toys” and living a lifestyle way above your pay grade because you have the cash now.
- Peer pressure. Everyone else lives like this and so you “fall in to the lifestyle”
- You are young, earn good money and have plenty of spare cash and so why not enjoy it?
- You are lazy? This might seem a bit unfair but if you really think about it, you know you should be doing something with at least some of your money don’t you? WELL, don’t you?
All of the reasons above are extremely good excuses for not thinking about your future right now and believe me, I am guilty of all the above. But, read on as there are a few things you should be thinking about right from the beginning of your career;
- The average junior crew member (1st or 2nd year in yachting) has 95% disposable income vs a graduate living in London on a similar salary who has 13% disposable income (not including going out)
- Yacht crew do not have income tax deducted from their salaries and, for many even after filing a tax return they will not have to pay income tax (in the UK especially). A graduate will pay on average 22% of their salary to the government.
Your average person in a normal job back home has all these monthly deductions and expenses to deal with whilst you don’t. No wonder your friends are jealous. But let’s get back to the main point above. If we gave your friends at home your level of disposable income after two years of working in London for example they would have a much better idea of how to use this additional money to their advantage. This is because your friends back home are exposed to pensions, savings, investments, mortgages, financial advice, credit cards, ISA’s etc on a daily basis. For many they have been automatically enrolled into company pension schemes. You, working on a Superyacht are never exposed to this sort of thing as it is completely irrelevant to your life.
Wouldn’t it be embarrassing if you ended your career in yachting after 15 years for example having only realised 6 years or more into your career what you could actually achieve with your money? Yes, you have some cash and savings and maybe a rental property with someone else paying the mortgage for you but that’s about it. You will still have to get a proper job so you can leave yachting and, as many of us who have done this know, the options are severely limited. As a result, many Yachties get caught in what we like to call the “Superyacht trap”
The Superyacht Trap is an anomaly only found in the Yachting industry. You have been in the industry for a few years and have moved up through the ranks to a well paid, senior position but the industry itself is starting to get a little wearing for you. You would like to have your life back and start thinking about moving back home. But what do you do? This is where the Superyacht Trap comes in.
- You don’t have enough money to retire. Despite what you might think this needs to be a considerable amount of money. £1m in savings would return you about £40,000 per year which is enough to live on but not much else. If you invested this and took risks with your savings then you can of course return considerably more. Most yacht crew do not have £1m in savings or investments at this point.
- If you don’t have enough to retire do you have a steady additional income from property? 4 rental properties that you own may generate £3000 – £4000 per month income which is great if the mortgages are paid off. If not you can’t rely on this income. Also, there is tax to pay on it too.
- So, you have savings but not enough, and you have property but not enough so you are going to have to get a job. Then comes the search for the classic ex yachtie job.
- Yacht management
- Yacht brokerage
- Project management
- Yacht agent
- Yacht services
- Set up your own company
- Estate management
- Jobs for ex crew are limited and, as I am sure most of you know they do not pay anywhere near as much as you are used to and are also pretty rare. As a result, stage two of the Superyacht Trap comes into play.
YOU ALWAYS LEAVE YACHTING TWICE
This might sound weird but it happens all the time. Your situation described above makes you want to leave and try life back at home but, because you don’t have enough savings, investments or property you come home and get a job which is a MASSIVE shock to the system as it is nothing like yachting. You stick it out for a few months but finally reach the conclusion that “Yachting is way better than this” and quit your job, going straight back to Superyachts.
This is the point in the Superyacht Trap where most crew know what it is they need to do. They think long and hard, take advice and make an exit plan so that, when they leave yachting the second time they have it all worked out and things go much more to plan this time around.
Almost everyone gets caught in the Superyacht Trap at some point in their yachting career and it is normally a result of the points raised at the beginning of this article. The real question is this:
Can you avoid the Superyacht Trap and still enjoy your job, life and the opportunities that come with it? The answer is, Of course you can.
Next time we look at how you can avoid the Superyacht Trap without making your life miserable.
Crew Family Office is dedicated to helping Superyacht Crew understand and make the most of their financial situation. No tricks, no jargon just sensible advice and help from people who have been there, done it and made all the mistakes themselves.
If you would like to have a chat get in touch here