Career Planning for Yacht Captains: From Command to Long-Term Financial Security

TL;DR

• Your command could end at any time with a WhatsApp message, and your timeline in the industry is not always in your control. There’s no time to waste in building your finances.
• You’re earning serious money, so take it seriously. You’re great at what you do, but for the best results, find an independent financial advisor (IFA) you can work with and make a financial plan. Think like the owner of the boat: not many titans of finance drive their own boat. You can still have your own trading account, but alongside your plan, not instead of it.
• Diversification is vital. This can include property, but your home is not really an investment. It’s where you live.
• Invest monthly (known as dollar-cost averaging). It’s time in the market that counts, not timing the market. Your investments should be a mix of regular monthly savings and lump-sum investments. No one knows when markets are at their lowest until afterwards. By investing every month, you automatically buy more when prices are low.
• Take care of your mental and physical health. Without it, you can’t build your wealth.

How can yacht captains build long-term financial security?

As a captain, the capital you build now, along with what you’ve already built, is what will fund your life now and in the future. As ex-yacht crew, and as a financial advisor for over twenty years, I understand how difficult it can be to prioritise time for yourself, and how easy it is in yachting for money to evaporate. Sit down with your financial advisor as soon as possible and make a plan that covers these key points.

• Home: Make sure your home is bought and paid for while you’re still earning at captain level.
• Future income: Work out the annual income you’ll need in the future, and make sure it rises with inflation (index-linked). Then work out how much capital you need to generate it.
• Timeline: You are a long-term investor, not a day trader. Ideally, aim to be financially independent by the time you’re 50, and certainly by 60. This takes the pressure off and reduces stress. If you wish to keep working, you can, but you won’t have to.
• Goals: Your first goal is to become financially independent. Your ultimate aim, like most boat owners, is to make money from your money, rather than work to earn it.
• Future-proof your income: Your money will need to be actively managed for the rest of your life, not just while you’re working.

What types of investments should yacht captains use?

Rental property vs stocks and funds: how do they compare?

Image by Michael Kopp from Pixabay

Rental property is a popular asset with yachtsmen. However, it has advantages and disadvantages.

Feature	Rental property	Stocks and funds
Physical presence	Has a reassuring physical presence you can see and touch.	Not the case (a digital or paper asset).
Liquidity	Illiquid. You may not be able to sell when you want to.	Normally liquid. Can be sold on any trading day.
Maintenance and costs	Has to be maintained, which adds ongoing costs.	No physical upkeep or maintenance needed.
Financing and risk	Often bought with a mortgage. If the market falls, interest rates rise or you lose your job, the rent may not cover the mortgage.	Usually bought with available cash.

Don’t over-extend your property portfolio. Make sure you diversify into other assets.

Stocks and funds

Image by Pexels from Pixabay

There is a huge variety of these. Your financial advisor should be able to direct you to stocks and funds that suit your requirements, and manage them for you.

They will also be able to advise you on the best structure to hold your investments in, for example, life assurance policies, savings plans, pensions, investment bonds or investment platforms.

Although you are a long-term investor, your financial advisor should review your investments regularly and make changes to your portfolio as required.

Why diversification matters?

Diversification also applies within stocks and funds. US artificial intelligence is a huge investment story right now, but make sure you are also investing in technology in other parts of the world, like Asia and Europe, and in other areas, such as energy (sustainable and conventional), defence, smaller and larger companies, multi-asset funds and natural resources.

Why do offshore investments suit yacht crew?

Offshore investments are very suitable for most yacht crew, as they let you take your money wherever you want to go and invest in USD, GBP and EUR. Investing across different offshore centres also makes sense, for example the Isle of Man, Guernsey, Mauritius and the Bahamas.

Onshore products are usually designed around one country’s tax rules, and part of their cost goes towards tax benefits you may not be able to use as internationally mobile crew. Your tax position depends on where you are tax resident, so always seek advice.

How should yacht captains plan for retirement?

When you retire, you move from capital creation to capital protection. Discuss your options with your financial advisor to work out the next step in your financial plan.

Why does your health matter to your financial plan?

A captain has a tough job, and you’re working for very demanding people. Unless you’re in peak mental and physical condition, you won’t stay employable, and you won’t be able to build your financial security.

• Have rotation where possible. You need to spend time with your family and friends, and relax.
• Build a good, reliable, long-term crew. This takes the pressure off, and makes rotation much easier.
• Make sure you have enough international life assurance (life insurance) to protect your family.
• Set your own timeline. Aim to be financially independent by 60 at the latest, so that when and how you step back is your choice, not someone else’s.

Frequently asked questions

How much do yacht captains need to retire?

It depends on the income you want. Work out the annual income you’ll need and ensure it rises with inflation. Your financial advisor can calculate how much capital it will take to generate it.

Is property a good investment for yacht captains?

Rental property can be part of a plan, but it’s hard to sell quickly, costs money to maintain and is often bought with a mortgage. Balance it with stocks and funds. Your own home is where you live, not an investment.

Why do yacht crew use offshore investments?

They’re portable, let you invest in USD, GBP or EUR, and suit internationally mobile crew. Your tax residency matters, so always take advice.

If you’d like to talk through your own financial plan, book a no-obligation call with us. We’d be happy to help.