Bespoke Financial Planning: Tailored for Superyacht Crew Needs

Financial Planning Superyacht Crew

Why would superyacht crew need bespoke financial planning? In fact, why would they need financial planning at all?

The first question is easy to answer. Without a proper financial plan, you won’t have the financial foundation to make your life plan (your dream life) a reality. Most yacht crew have dreams and ambitions. Being blunt, dreams cost money. A financial plan helps make them a reality by generating the cash you’ll need to pay for your future, ideal life.

Answering the second question is more complicated, because it is, in fact, two questions in one. You see, the phrase ‘bespoke financial planning’ can be interpreted in two ways. Let’s look at both, starting with:

A process tailored to yacht crew

Planning is a process. You might think it’s the same for yacht crew as it is for anyone else. To an extent, you’d be right. There are elements of making a financial plan that are the same for everyone, regardless of who you are.

For instance, a financial plan has to be aligned with a life plan. It must have clearly defined outcomes, expressed in currency values. It needs a timeframe and weigh points. But those are really just the structural elements, rather than the process.

The process of financial planning takes a bit of time and effort, let alone when you’re not actually on land to sort things out. The process is much easier when you work regular hours, in a fixed geographical location, and in the same time zone or physical location as the service providers you need to consult to make your plan. On top of which, when you’re ashore, it’s often much simpler to deal with the administrative side of making a financial plan.

That goes for anything, doesn’t it? You’ve been in yachting long enough to know that getting things done, especially administrative things, isn’t always easy when you’re chasing after guests’ requests off the coast of Croatia.

So when we say ‘bespoke financial planning’, we mean a financial planning process that is tailored to your unique superyacht-related situation. You need someone who works across time zones, can be consulted with regardless of where you are, and in line with your ever-changing schedule.

A 9-to-5 desk jockey with a traditional financial planning firm isn’t going to understand the needs of superyacht crew. And their financial planning process won’t be geared towards them either. For that, you need a financial planning company that has made it their life’s work to help superyacht crew (and only superyacht crew) achieve their life and financial goals. The kind of financial planner who knows yachting inside out and understands the restrictions the yachtie lifestyle places on making plans, getting admin sorted and doing research into financial products.

That’s the kind of financial planner who can tailor the financial planning process to your special life and work circumstances.

A financial plan tailored to superyacht crew

The other way of looking at ‘bespoke financial planning’ is to look at the outcome of the process—the plan itself and everything it includes.

A financial plan for superyacht crew will include the following things geared towards their specific needs.

1. A clearly defined, achievable monetary goal that is driven by life goals

The best financial plans are driven by a life plan. Your life plan sets the goals you want to achieve. Your financial plan is designed to generate the money you’ll need to pay for your life goals.

So far, nothing out of the ordinary. This applies to anyone making a financial plan.

However, superyacht crew are different. They have different life experiences than most people their age. They’ve seen more of the world and have been part of an eye-opening and horizon-broadening (literally) industry.

Chances are, your ambitions and dreams are going to be a little more ambitious than most people’s. And there is also half a chance you will want to achieve those ambitions and dreams outside your country of origin. One of the great things about being superyacht crew is that you gain a much better understanding of what’s out there waiting for you in the wider world.

Even if your life goals are geared towards a future life in your homeland, you’re not there now. Right now, you’re bobbing about on a luxury yacht thousands of kilometres away, being influenced all the time by what you’re seeing and experiencing. The sensory inputs, new ideas and exciting people around you (including your fellow crewmates) will inevitably make you reconsider your life goals at some point. Possibly change them completely. We’ve seen that happen.

Example, you’re from South Africa and the crew mate you’ve met and decided to spend the rest of your life with is from Sweden. Where do you call home? Your homeland. Theirs? Or you might choose a different country altogether? You both like Italy.

People with 9-to-5 desk jobs ashore are far less likely to change their life goals (and where they want to make them come true) compared to superyacht crew.

And if your goals change, so will your financial plan, and along with it the amount of money you might need. Consequently, your plan needs to be as flexible as possible.

2. A time frame that is aligned with how long you expect to be in yachting

The longer you can invest your money, the more chance you will have of making a significant return. In other words, the longer you can allow for your financial plan to come to fruition, the better. It’s not timing the market, but time in the market that is really important.

Easy-peasy when you’re in a desk job ashore and have allowed for a 25- to 40-year pension plan.

Much less so when you’re working in an industry that, let’s be honest, can discard you overnight, regardless of how high up the ladder you’ve climbed. The ultra-rich aren’t exactly employee-orientated—or very rarely anyway. So job security isn’t really a thing in yachting. And bear in mind that there is no shortage of aspiring crew to replace you, either.

On top of which, the superyacht industry is notorious for burnout. Superyachts are fabulously ostentatious and beautiful places to spend a holiday: Less so as environments to spend your working weeks. You have to be able to cope with tight spaces, the constant presence of other people, little personal space and at times a frenetic pace of work—for months on end.

It all takes its toll.

You might feel you can handle months on board a superyacht during the extremes of the Med season now, but will you still be as keen in five years’ time? Or ten years’? Maybe you’ll burn out in five months’ time, who knows?

Your financial plan needs to be functional within a limited space of time. Our advice to superyacht crew is never invest in anything that requires you to stay invested for more than 10 years. You can always decide to extend your investment period and many crew do, but initially you will probably need a ten- year timeframe to build up a significant, life changing amount of capital. A ten year time-frame gives you the opportunity to review where you are, re-assess your goals and decide on further action.

So your plan needs to suit your yachting lifespan.

3. Suitable investment vehicles

The investments that fuel your financial plan must suit both the plan itself (to achieve the desired financial outcome) and the stage of the plan. The investment vehicles you use early in your plan may be different from those towards the end of the plan. An obvious example is risk. As your plan gets closer to fruition, you want to protect your money as much as possible, so you reduce the risk profile of the investments you have.

Again, nothing new here. This goes for both shore-based investors as well as superyacht crew.

However, investments aimed at shore-based investors often don’t suit superyacht crew—or at the very least don’t take full advantage of a yachtie’s unique situation.

Shore-based investments are subject to the tax regulations of the shore-based jurisdiction. But these may not be appropriate for you as someone who doesn’t work on land. Instead, you are more of a citizen of the seas, outside the usual tax and regulatory jurisdictions in many cases. Because of this, it makes far more sense to use offshore investment structures.

In fact, take a leaf out of the yacht owner’s book. Much of their financial life is built using offshore financial structures. Why? Because they are far more flexible and better suited to the life of someone who travels a lot and has residences across the globe.

Using offshore investment structures means your investments follow you wherever you go. If you invest ashore, your investments are tied to that jurisdiction. In other words, you have to follow your investments, rather than the other way round.

4. An investment schedule of regular, achievable, yet effective, amounts of money

Investing regular amounts each month is how many investment vehicles work. At sea or ashore, it’s the same. But superyacht crew have far more financial power than people who live and work ashore. That’s because many, if not all, of your day-to-day expenses are taken care of:

  • you commute to work daily (working on a superyacht is an extreme version of working from home)
  • you don’t pay rent.
  • you don’t pay for your work clothes (you don’t need a business suit, you are given a uniform)
  • you don’t pay for you food.
  • you don’t pay for electricity, or gas, or WiFi, or water, etc…
  • you don’t have to pay local amenity taxes, property taxes, etc that you might have to when you live ashore.

In fact, while you’re on board, which is most of the time, you don’t need to pay for anything at all. And, you may not even have to pay income tax, because you don’t live ashore for the majority of the year, so you may not have an income tax obligation. Our advice: seek specialist advice from a tax expert in your home country about income tax.

Regardless, your disposable income is much, much higher than someone earning a similar salary ashore.

That means you can invest far more each month than most people can.

People who work ashore save or invest on average 10% of their monthly income. If they are earning $4,000, they can have $400 to invest once all the costs we outlined above are taken care of.

If you earn $4,000 in yachting, you can probably easily invest $3,000 per month, giving yourself a nice $1,000 to spend on treats for yourself each month.

Now, go back to that 10% figure. Someone ashore who can invest $3,000 per month is earning $30,000 a month. That’s $360,000 per year. So you have the equivalent investing power as someone on land earning $360,000.

Your unique opportunity needs to be reflected in your financial plan

All of this means you have a unique opportunity to use your time in yachting to build the financial platform you need to achieve your dream life after yachting. And your financial plan needs to recognise and honour that opportunity. It needs to be structured in such a way that it fits seamlessly with the superyacht life.

What to know more? Contact us or maybe have a peek at this video:

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