| | | | | |

Attention All Yacht Crew! Do You Know What You Are Invested In? 

You’ve seen it on your socials, you’ve heard it from other crew members “What a great opportunity a yachting career can be to establish yourself financially!”

They say it could be completely life changing…. 

Unfortunately this doesn’t always happen in the way you thought.

You do the right thing you contact a financial advisor or one comes to the boat and all of a sudden you are sending money to an investment… every month. 

As the months go by, you realise you don’t have much idea about your investment or savings plan.

Questions start to go through your mind. 

What is this investment?

Where is my money?

How can I access my money?

And you haven’t heard from or received any update from your financial advisor or company.

Where are they?

Why don’t they reply to my emails?

What is the name of their company?

Do this sound familiar? Hopefully this hasn’t happened to you, but it is quite likely you know a crew member who has had this experience.

So to avoid all the heartache and misery Yachting Financial Solutions have prepared this 12-point checklist to help you navigate the investment world.  

Beware of the mystery savings plan

Make sure you understand what you are investing in.
Image by Gerd Altmann from Pixabay

  • Is the financial advisor talking about financial planning or just trying to sell you?
  • An investment. If it is just an investment is that what you need? Or do you need a proper financial plan? More on this later… 
  • Never sign any paperwork at a first meeting. Resist any pressure to do so. 
  • Ask lots of questions and ask for the investment or savings plan details in writing. 
  • How long will you be invested? (A ten-year plan could be fine for someone working in yachting long term, but not for young crew who are spending a few years on boats to travel the world)
  • Can you cash in the full value of all your investment at any time? If not, how does it work and is this the right investment for you?
  • What company are you investing with and what are their website details?
  • What will you be invested in? It should be diversified funds (groups of stocks) or maybe stocks, not just one bamboo farm. If you are told you will be investing funds and stocks, ask what they are and why in those funds or stocks? 
  • How often will your investment be reviewed and managed?
  • Don’t be too distracted by talk of bonuses etc. Whilst it is always great to get a bonus, it is the money you have invested and the funds you are invested in that will have the biggest impact on your investment value over time.
  • How can your financial advisor be contacted and where is he or she based?
  • How long have they been working as financial advisors and where are they regulated?

OK, so all is going well so far. 

Let’s move onto the next step. 

What should happen if you have signed up for an international or offshore savings plan

  • If you have signed up for a savings plan, you should have a copy of all the application paperwork for your reference.
  • Once your application is accepted by the company that administers your investment, you should receive policy and contract documents and access to your page on the company’s website. Then you can take a look at your investment at any time.
  • You should have contact details for your financial advisor or their team for any queries.
  • Savings plans are longer-term investments, not daily trading, so your financial advisor won’t be changing funds daily, but they should be reviewing your funds every quarter and letting you know if they wish to make any changes and why.
  • You should also receive an investment review every 12 or six months with the option to discuss with your financial advisor. 

Saving for your financial future is a marathon, not a sprint!

Financial freedom is a marathon with marathon rewards.
Image: Alexa from Pixabay

A yachting career is a great opportunity to build your future financial security and can literally Be The Opportunity That Changes Your Life. But the key word here is ‘career’.

Not everyone who starts working on boats wants to make it their career. They are doing it for a few years to travel the world on someone else’s dollar and have fun, which is absolutely fine. But long-term savings plans are not for them. Their lives could change at any time.

Whilst it makes sense for all crew to save some salary and all crew easily can, most crew under 25 should be saving in a plan where they can access the full value of their investment at any time. Savings plans like this are readily available. Yachting Financial Solutions regularly sets up plans like these for yacht crew, often as part of their broader financial plan.  

Any financial advisor who is only advising savings plans which need to be funded for many years with limited access to the money in the investment for ALL Yacht Crew is only thinking about themselves, not about what is best for the crew member. 

For crew who have decided to make yachting their career,  it is likely they will be in the industry for at least 10-15 years. They can invest in offshore long-term investments and these can work very well, providing they are properly managed by their financial advisor. 

But even in this situation, which is much more complex financially, it makes sense for crew to have a mixture of longer-term investments (their core investments) and shorter-term investments where it is possible to access their money at any time. Let’s face it, everyone has the occasional financial crisis and may need to be able to cash in some of their investments.  

What kind of Savings plans are available to Yacht crew?

Generally the most suitable savings plans and investments for crew are offshore investments.

These are available to yacht crew from most countries and they are highly flexible. You should be able to take the proceeds of your plan wherever it is you want to go.

We speak to lots of crew who at the beginning of their careers think they will return to their home country after yachting. In reality at least 50% go somewhere completely different. It all depends on who you meet and where you travel to, so you need very flexible investments  

A lot of offshore investments are technically life assurance policies, which may give the crew member useful tax breaks. To qualify as life assurance policies, these investments have to pay out more if you were dead than alive. That’s generally 1% more.

There is also ‘actual life assurance‘. What is that?

Actual international life assurance is where you insure yourself for a lump sum over 20-25 years, say EUR/USD 250,000 or USD/EUR 500,000, and the life assurance company makes a bet that you won’t die or become terminally ill during that time. 

If you do die or do become terminally ill, the life assurance company will pay out either to you or to your nominated relatives your lump sum, providing you have continued to pay your monthly payments. 

Life assurance monthly payments are age-related, so the younger you are the cheaper life assurance cover will be. It will never be cheaper that it is today! This is a really good action to take as soon as you can for family protection. You may have relatives back home who might already or may in the future depend on you financially. 

Even if you are footloose and fancy-free right now, at some point in the future you will probably have a mortgage and your own partner and children who depend on you. 

You wouldn’t have an issue insuring your car would you? So it should be a no-brainer to insure yourself too. You are the goose that lays the golden eggs.

Life assurance monthly payments don’t increase over the 20-25 years of your policy, so you can lock yourself into some very substantial cover at between USD/EUR 100-200 /month, depending on your age and health. 

You can also cancel your cover at any time without penalty. 

To contact YFSOL for a quote, please book a call here:

Book a call

Take control and benefit long term

A lot of boats have a crew life assurance policy, but don’t rely on that. Cover is often very limited.

For example, it may only cover you if you die on board the boat. (Sadly, this has happened in real life.)

Generally the amount of cover is the minimum EUR/USD 50,000-USD/EUR 100,000. That amount of money is unlikely to pay off anyone’s mortgage or set them up for life. It’s only really short-term help. 

If you have your own life assurance, you can take it from boat to boat. And if, in the future, you don’t need it or have built up sufficient investments, you can cancel it. 

Financial Planning versus just buying an investment

Financial planning is for crew who are making yachting their career.

A career in yachting is a fantastic opportunity to completely change your life financially, but you do need a plan.   

We’re all great at planning in the short term. We make party plans, wedding plans, holiday plans and  cruising plans. Very few of us would just turn up at the airport and take the first plane to any destination. That would be crazy wouldn’t it? Nor would the boat leave the harbour without knowing its destination, would it?

However, when it comes to their finances many crew do just that.

Crew might have money in the bank, maybe they have a savings plan or investment, which is great, but without a financial plan, they haven’t identified their goals and they don’t know if they are saving enough to achieve them.

Unintentionally,  many crew are not benefitting to the maximum from the best opportunity they will ever have to change their lives! 

This is probably because many crew see financial planning as too long-term to visualise. This is a misconception. It is a long-term project, but you can chop your plan up into digestible chunks.

Your plan will help ensure that you are saving a sufficient amount and you will be able to see how you are progressing with your financial plan at any time. What’s not to like?

The comfort of a financial plan

Many crew have told us that, once they have a financial plan to focus their yachting career, knowing and seeing that they are approaching their goals really helps get them through the tough times.

Every six or 12 months you review your financial plan and your investments with your financial planner and make any amendments necessary. If you would like to discuss how you too can set up a financial plan with Yachting Financial Solutions, just book a call.

The first step is to identify your goals. Where might you like to be after yachting and what might you like to be doing?

Financial planning is long-term, so your goals can be amended, in conjunction with the changes in your life. But once you have a financial plan you know where you are going and how much you will need to save over different timelines to achieve your plans.

You’re no longer just crossing your fingers and hoping it will work out.

Similar Posts