Sailboats and Depreciation

Using Sailboats to Stabilize Your Dollars

by Walter Parham – Assistant Editor

 

It used to be that cash was considered ‘king,’ particularly when paper notes were backed by gold and silver. But in today’s economy (or in any fiat-currency based, inflationary environment), it can be said that our own equity is the ‘safety net’ that backs our dollars.

A seasoned investor will tell us that having too much money can be as much a problem as not having enough. That’s because paper money loses its value over time. Our dollars are worth less now than they were a year ago – and the same will likely be true next year and the year after.

Here in the USA, the Consumer Price Index (CPI) assures us that inflation is in the single-digits, but these figures are largely based on consumable items, household goods and electronics that are mainly imported from overseas. Costs for the real necessities such as fuel, insurance, health care, and utilities are escalating at a double-digit pace annually.

That’s the bad news.

The good news is that – if you’re into sailboats – you can beat inflation, make money AND have a great time doing something you enjoy.

The idea here is to preserve purchasing power and value itself, so anytime we buy into a non-depreciating asset* that can be converted back into currency, we have a potential inflationary hedge.

Similar to the way precious metals remain mostly consistent with the purchasing power they provide, the value of a good investment boat can ride out currency fluctuations with sufficient elasticity to ‘float with the tide’ so to speak, thereby protecting our equity base against rising prices and falling dollars.

Unlike precious metals however – and unlike real estate - sailboats don’t fall under a regulated price structure. This means we really can buy them for much less than they’re worth, thereby increasing our net worth in leaps and bounds every time we ‘flip’ a boat.

And instead of ‘hoarding’ profits in the form of cash, we can continue rolling our capital into the next boat and each subsequent boat thereafter.

*Of course there really is a depreciation curve on sailboats, but the market tells us that it mainly applies to newer vessels – and generally slows down to a stop somewhere around the 10-year age mark, after which other variables take precedent.

As skilled investors, the other variables are precisely those which we can learn to control. This is covered in great depth in the Start a Sailboat Flipping Business course.

Clicking on the link above will apply a $10 discount off the cost of the course.