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Financial Planning for Yacht Crew: Creating a Secure Future On and Off the Sea

Financial security for superyacht crew expressed as a padlock

A secure financial future is something all superyacht crew should strive for. Why? Because being financially secure will give you the freedom after yachting to choose how you live your life on your terms—free from the demands and priorities of an employer.

As superyacht crew, you’re uniquely placed to use your time in yachting to create the financial stability that will allow you to live your best life in the (not too distant) future. But only if you do two things:

  1. act now
  2. act decisively in accordance with a plan

The window of opportunity to take full financial advantage of a career in yachting is a small one. The average career in yachting lasts between 10 and 15 years, though many uperyacht crew leave well before then. So it’s a short timeframe, and there’s no time to waste.

And it’s not simply a case of putting some money aside during that time, though saving some money is much better than spending it all. But to squeeze every drop out of the financial opportunity superyacht crew have, you need an effective, flexible and robust financial plan.

Unmanaged vs managed investments explained by contrasting a pile of coffee beans and a cup of coffee

In this article, we’re going to look at how you can create a secure future, both on and off the sea.

The financial challenges superyacht crew face

Importantly, you need to recognise that yacht crew face special financial challenges that those outside the industry don’t. These pose considerable financial hurdles in yachting.
And they aren’t always obvious.

Firstly, you’re surrounded by luxury and prestige. It’s so, so easy to get caught up in this world and be attracted by the opulence. As a result, you might start spending money on expensive things like watches, jewellery or USD 250 bottles of Champagne.

We’ve seen it happen time and again that superyacht crew manage to spend their entire income, despite having very few fixed outgoings like rent, electricity, food, etc.

Secondly, you work exceptionally hard and often long hours, leaving little room to spend working out financial plans. You don’t have a regular 9-to-5 job that you can step away from. You can’t leave the boat at the end of the shift, to get away from it and your colleagues. All of which can make it hard to find time and space to work on a financial plan.

Thirdly, your status isn’t the same as someone who works ashore. For superyacht crew, high-street financial structures such as bank accounts aren’t always the best solution.
We recommend an international bank account to all our clients, simply because as accounts for working expatriates,they are better suited to the needs of superyacht crew.
The same applies to international investment structures. (See below for more about that.)

Lastly, getting reliable financial information takes a lot of work. People ashore can visit a financial planner. But when you’re on board a yacht, it’s not so simple to overcome the financial hurdles in yachting. (Actually, it is if you know the right financial planner who has
tailored their business to overcome superyacht crew financial challenges, and can do online face-to-face meetings at a time that suits their schedule…)

The importance of clear financial goals

Financial goal setting is the cornerstone of an effective financial plan. The financial goals need to be as ambitious as possible (but not crazily so) and be achievable for someone with the yachting lifestyle.

A proper financial goal has a clearly defined outcome and deadline. In other words, you know what you want to achieve and by when. Eg. USD 500,000 for a home bought and paid for by 1st January 2034.

Then your plan works back from there, taking into account your yachting lifestyle and financial goals.

You’ll need suitable investment vehicles that should grow your money within the time you have available. And you’ll need to figure out your sustainable level of monthly financial commitment for commencement, but also choose vehicles that allow you to pause/increase/decrease payments.

Yachting is a demanding business, so you need to be as confident as possible, before committing to a financial plan that is dependent on you staying in yachting, that you will be able to last the distance.

Typically, if you’ve been working on board a superyacht full time for a couple of years now, you’ll know whether or not you should be able to sustain doing so for the next decade.

Before you start investing

It’s tempting to get going straight away with your investments. But budgeting for yacht crew is very important. What happens if your income were to stop for three or six months,
when you are managing seasonal income? Would you still be able to meet your monthly financial commitments laid out in your financial plan? (More importantly, would you be able to meet your day-to-day financial commitments to live?)

We always recommend to clients that they build up a financial safety net for themselves, a yacht crew emergency fund, if you like. This should be the equivalent of at least three to six months’ salary.

Protect yourself

In addition to building your own emergency fund, you should also look at Life and critical illness insurance. These insurances will pay out a lump sum if you died (vital if you have dependents) or developed a critical illness. (subject to policy conditions). This type of insurance is age related so the time to do it is now.

You should also make sure you have good health cover in place so that if something does happen, you aren’t faced with huge medical bills that will completely undermine your entire financial plan.

Don’t, whatever you do, simply trust that the yacht crew insurance the boat provides will be sufficient. The only person in the superyacht industry who truly cares about you, is you. So make sure you look after yourself. Health planning for yacht crew is crucial.

Tax and financial regulations

Yachting Financial solutions are not accountants and we don’t give tax advice. However, we know that it is vital for yacht crew to be aware of the relevant yacht crew tax regulations and the financial compliance issues involved.

To ensure that all our clients are up to speed on the relevant tax and financial regulations and to minimise their tax liabilities, we work in conjunction with a selection of international tax specialists who are very experienced with the tax affairs of superyacht crew and are able to advise international yacht crew.

Dealing with money fluctuations

The amount of money you earn in yachting can vary dramatically from season to season, either up or down. And additional to salary during the seasons (or at the end) you might pick up significant extra tip money.

So you need to look at your financial plan from two angles:

  1. Budgeting for Yacht crew. Can you meet your investment commitments in the slow months, or the out-of-season months, when you might not be working?
  2. How can you best use the bonus tip money to boost or accelerate your financial plan? (After keeping some back for yourself for a well-earned treat, of course.)

Dealing with dips in income is what your safety net is for. So if you’ve built one up as we suggest (and replenish it when you are working or income is higher), then managing dips in seasonal income throughout the year shouldn’t be an issue. You know they are coming and you’ve budgeted for them.

You can adopt the same approach to tips. You know you are very likely to pick up some extra cash throughout the year especially if you work on a charter boat, so have a plan in place so you know in advance what you’re going to do with that extra money.

A simple plan is to agree with yourself that you will keep 10 to 20 per cent for yourself to spend on a treat. You’ll also use a portion to top up your emergency fund, if needed. The rest will go into your investments as lump sum investments.

Making the right choices when investing for the future

Retirement planning for yacht crew needs to suit the yachtie lifestyle. Most importantly, it needs to suit the timeframe you realistically expect to be in yachting.

We say ‘realistically’ because many yacht crew overestimate the number of years they have ahead of them in the industry. (The average is around 10-15 years). This means that retirement savings strategies need to be fast tracked. The financial assets you build up during your yachting career will be the core of your long-term financial security, so it is important to start your retirement planning as soon as possible and save as much as you can.

If you do take advantage of this potentially life-changing opportunity, then you should be able on leaving yachting to move onto your ideal life with you in the driving seat.

Clearly retirement planning is long-term saving, but we recommend that, in order to have the maximum options, you don’t invest your money in any investment vehicle that ties it up for more than ten years. You can always reinvest if you are still in yachting when the investment matures.

Retirement savings strategies/investment strategies for yacht crew

Tip 1: limit your individual yacht crew investment vehicles
to the medium- long term (five to ten years)

Tip 2: diversify, diversify, diversify

When yacht crew make investments, some are tempted to put a lot of money into a single opportunity or fund. This is not a good idea.

Diversifying into as many asset classes as possible that are likely to make money and are actively managed is a far better option.

Tip 3: Make use of international investment platforms

Investment strategies for yacht crew will give you the opportunity to invest through international investment structures, rather than be limited to what is available in your home country.

This is important because you will have more flexibility and choice in the investments available.

And it isn’t certain you’ll continue your life in your home country after you leave yachting. There’s a good chance you’ll settle down somewhere else. That would make having your investments tied up in a structure in your home country inconvenient. Much better to use an international investment structure that will give you easy access, regardless of where you end up in the world.

Avoiding temptation

A secure financial future is a fabulous goal to work towards. The benefits in life that you will get from being financially secure and free are huge. But while the goal is a magnificent one, there are powerful forces that will try to draw you away from it.

One of the biggest temptations that will undermine the success of your financial plan is the lure of spending big when you are ashore during your time off.

To ensure your future financial stability onshore (when you leave the industry), a work-life balance for yacht crew is vital.

We’re not saying don’t enjoy yourself. Life is for living. But don’t do it at the expense of your once-in-a-lifetime opportunity to create financial stability ashore and live the rest of your life free to do whatever you want in life.

Don’t waste your opportunity

Effective financial planning is crucial for a secure financial future on and off the sea.

An effective plan is one with clear goals and a realistic time frame.

The sooner you start, the bigger the advantage you’ll be able to take from the financial opportunity your limited time in yachting will give you.

You will probably need specialist help to get started and to keep ‘your plan’ on track.

Act today.

Building your financial future: help needed?

Are you thinking that being financially stable and free after yachting is a great idea? (It is.)
Are you not sure where to begin?

Well, Yachting Financial Solutions are financial planners for yacht crew.

We offer dedicated yacht crew financial planning services

We will have an online face-to-face consultations with you to suit your schedule.

Contacting us for a zero-obligations introductory call would be a great start. Click here:

Book a call with Teresa

Not quite ready? Then download this:

A book of motivational insight to help superyacht crew make life and financial decisions
A book of motivational insight to help superyacht crew make life and financial decisions

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