Savings and Superyacht Crew
Savings plans are a key component of your financial and life plans. They are among the best ways to ensure that your money grows.
Savings plans, including pensions, are long-term financial vehicles (structures) that hold your investments. They aren’t savings accounts with a bank into which you drop some money every now and then.
There are two main types of savings plan. The first is regular-contribution savings plans, which are fantastic for building up capital. The second is capital or lump-sum savings plans.
Both of these savings plans should form the core of any yacht crew’s financial and life plans.
How effective savings plans work
Your savings plans will hold a collection of stock market funds (or stocks). A stock is a share in a company; a fund is a collection of stocks.
The choice of funds in your savings plans should be reviewed regularly and amended by your fund advisor to ensure the best possible performance. Many savings plans are also placed in a life assurance wrapper for tax efficiency.
Both regular and lump-sum savings plans are long-term investments and it is very easy to lose focus and stop saving, or get distracted by the latest ‘get rich quick’ scheme.
This is why it is vital your savings plans form part of your life and financial plan. If you have a financial plan, then you are already thinking long-term and won’t be distracted or discouraged by short-term stock market conditions.
For your savings plans to thrive you must first get started and, importantly, keep going as much as possible. The longer you stay invested, the better chance you’ll have of good returns. It is time in the market that’s important, rather than trying to time the market so you invest at the optimum moments, which is virtually impossible.
Steps to a saving plan
Step 1—Identify your plans/goals
Then you know where it is you are trying to go. In other words, how much you need your savings plan to generate and by when.
By identifying our goals, you also hugely increase the possibility of building your ideal future.
Step 2—Put your savings plan in place
The fundamental building block of your financial and life plan will be your savings plans. The key starter savings plan for most yacht crew will be a regular monthly savings plan.
Step 3—Take action
Take the steps you need to take to achieve your goals. Then keep going until you have reached them, making amendments to your financial plan along the way by regular review. Commitment to your plan is vital. You won’t be alone here. Yachting Financial Solutions can work with you every step of the way.
Whether you’re working towards financial independence, saving for a big purchase, or planning for your future, a savings plan tailored to your needs is essential. To help you understand the potential outcome of your savings, we’ve provided a Savings Plan Calculator to give you a clear picture of how your contributions can grow over time.
Why do yacht crew need a monthly savings plan?
- Pay yourself first
You can set up a regular monthly payment to your monthly savings plans. We advise that your monthly payments leave your bank account to go to your savings plan as soon as you receive your salary. Then you have actioned your monthly savings budget as soon as possible and you can spend the rest of your salary as you wish. This is a much more effective way of saving than waiting until the end of the month and saving what you have left. Most crew (like most of us) won’t have any money left to save by then. - Save yourself time
Your monthly payments go to your savings plans automatically every month. - Flexible structures
Most current regular savings plans are highly flexible. You can increase contributions if you have a wage rise or receive large tips. You can also pause or reduce your monthly contributions, if you are between jobs, or taking time out for training. You are not locked into a plan that you can’t afford, and you can easily save more, which makes these savings plans very suitable for yacht crew. - Dollar cost averaging
If you are buying into the stock market every month, purchasing fund units or stocks, you benefit from dollar cost averaging. Because you’re buying on a regular basis, you will at some point buy when fund units and stock prices are low. Not only will you get them cheaper, you’ll get more units for your fixed monthly investment. Then as stock markets rise, these extra units/stocks should ensure the value of your investment gets an additional boost. - Beat the bank
Most bank savings accounts offer very small rates of interest, unless you lock your money up for a significant amount of time. By investing in stock markets through your savings plans your money is much more likely to be working harder for you and the returns on your investments should easily beat the bank. - Huge range of investment opportunities
You can invest in a huge range of stocks and funds covering different countries, sectors, and risk profiles. In addition, you can tailor your investments to match current market conditions and where you are in your financial plan.
Capital investment vehicles
Capital investment vehicles are the second core investment vehicle for any yacht crew’s financial plan.
There are a huge range of capital savings plans available. To achieve a good return yacht crew need to be investing long term ( at least 5-10 years). However, the saving plan must have enough flexibility that the investment can be accessed if an unexpected event occurs.
Many offer a huge selection of funds, investors are no longer restricted by a fund selection provided by the investment or life assurance company.
Why invest capital?
Many of the advantages of regular savings plan also apply to capital savings plans. However, there is one major difference.
When you invest capital you are investing a significant sum from the get go, so you have financial firepower from day one, with the possibility of significant growth from the very start. With regular savings it takes a while to build up capital to a level that starts earning significant returns.
Investing offshore
Yachting Financial Solutions are offshore financial advisors. We consider offshore savings plans are the most appropriate for yacht crew. Offshore savings plans were developed especially for working expatriates ( ie. people working outside their home country, exactly like yacht crew.
Offshore savings plans:
- are highly flexible and enable crew to take their money wherever it is in the world they want to go.
- usually offer a range of investment currencies, not normally available with savings plans in your home country.
- don’t include the tax breaks normally included in onshore plans, so the plans are more cost effective. These income tax breaks are not normally relevant to yacht crew.
Savings plans: your key to your ideal life
Savings plans are a wonderful way to start accumulating capital and building your financial future/Ideal life.
Everyone working in yachting can do this.
The key point is don’t delay and make the most of this fantastic opportunity. You too can build your financial future, but you can’t build more time, so the time to start is now.
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