Why Living On a Boat Is One Of The Cheapest (and Awesome) Way To Live

Last month I did my biggest purchase in years. It might even be my most expensive purchase ever.

I bought a boat. 

The book I named this blog after (hint: its Walden), made a huge impression on me. The part of building a small cabin and living in the woods was super appealing to me. But I must be honest. I like water more than the woods.

But buying a boat has always been scary for me. Boats are expensive and need constant repair. But. If you buy a small boat, it’s easier to fix things. And they not just cheaper. They are WAY cheaper.

Spare parts on boats cost exponential more as they increase in size. And smaller boats just need fewer spare parts. So there is not too often something to fix.

Hedonic Adaptation on Boats

I don’t have a toilet onboard. That will scare a lot of people because they don’t know where to take a shit. People I have onboard are often relieved when I tell them how often they break and it is not fun to fix a toilet in +2m waves and there is shit all over the floor.

To be honest. It is sort of nice just to take a shit in the ocean. And when you do get back to an ordinary toilet. You will appreciate much more than you normally would. Essential stuff as cooking becomes a bit of a project. But I like that. It involves everyone on the boat.

Living on a boat is the highest highs and lowest lows. That is what I love about it. What we are taking for granted in our normal lives becomes a huge luxury. Having a fridge packed with delicious foods is not something we truly enjoy. But when you have been on a boat for a couple of weeks. That is a huge luxury. But it is also nice to come back to the boat where everything is super simple.

The Economy

There are several reasons why a small boat is preferable to a big boat.

  • Cheaper to buy
  • Easier to sell
  • Doesn’t drop in price
  • Cheap maintenance
  • Easier and cheaper to find a harbor
  • Cheap Insurance

This the breakdown of what I have bought my boat for.

The cost of the boat was 29.000 DKK.

Then I needed to buy some miscellaneous stuff like tools, life jackets, and similar. That costs me 2.000 DKK. 

As a rule of thumb. It will cost you 20 % of the purchasing price in maintenance. Which will be 6.000 DKK. That is a pretty high number. Basic maintenance will cost me no more than 2000 DKK. But if I keep it for years I must eventually buy a new motor, sails, and similar. And each of that item is in the “pricey” end of about 6-7000 DKK.

A base harbor place is super cheap when you have a small boat. My boat has received a spot in Ærøskøbing at the moment. And a spot in that harbor costs 3000 DKK annually. That is utilities included. I know that in Copenhagen it is around 4000 DKK annually. So just let’s go with an average of about 3500 DKK. 

The insurance as shall have by law. Comes at the ridiculous price of 240 DKK annually. Which I gladly pay.

To Sum It Up

  • Cost of the boat = 29.000 DKK
  • Miscellaneous stuff = 2.000 DKK
  • Maintenance = 5.000 DKK
  • Harbour fee = 3.000 DKK
  • Insurance = 240 DKK
  • Total = 39.240 DKK

The price of buying a ready sailboat will be about 40.000 DKK. It could probably be done cheaper. But this boat was a bargain at that price. Someday I will be selling it again. The cost of the boat and miscellaneous shopping is money I will get back again.

So the annual cost of having a boat is only:

  • Maintenance
  • Harbour fee
  • Insurance

Which is = 8.240 DKK annual or 686 DKK/month.

My Monthly Finances the Apartment

Is something like this.

  • Rent 3300 DKK
  • Insurance 300 DKK
  • Utilities 300 DKK

Total = 3.900 DKK 

Living in a small boat compared to living in a really cheap Copenhagen apartment is almost 6:1. 

For months of rent in the apartment, I can live the whole summer on my boat. What about winter? Living on a small boat is probably not for everyone. And I might think that it won’t be for me either in the cold Danish winter months.

That is why I’m thinking of the perfect mix of living on a boat in the summer. And having a vacation house (sommerhus) during the winter. Renting out a vacation house in Denmark has a lot of tax benefits. And I would get the best rate when the weather is best here in Denmark. But that doesn’t matter. That is where I prefer to be on a boat. So I could rent out the vacation house during the summer. And living in it myself for free during the winter. And in 20 years-ish I would have a vacation house that has been paid off by the tourist.

Another thing I’m considering is to sail the boat to the Mediterranean sea. I love every single country down there and the sailing season is just much longer (and probably) nicer because of the warmer weather. During the winters I could put the boat on land and go home to Denmark to earn some money and hang out with friends and family.

Coast FIRE and Living On a Boat

If you read this at 20 something years I would really encourage you to live on a boat for a short period of your life. It is filled with adventures, and you will save a lot of money which can compound into a fortune.

If we compare living on a boat and living in a cheap apartment. With my finances as an example.

Living on a boat costs 700 DKK/Month

Living in cheap apartment costs 3.900 DKK/Month

You will save 3.200 DKK/month or 38.400 DKK/year. 

If you are 25 years old and you invest those 38.400 DKK, they could compound into:

626.358 DKK when you are 65 years old with a 7 % ROI.

So go ahead, live on a small boat, while you are working a year or two. Sail out in the evenings with some of your friends with some pizza onboard. Dump the anchor in and have a blast.

You will get an enormous amount of street credit from your friends and it is a perfect spot for a date as well.

Do that for two years and I have made you rich.

Blog Sponsor

A fellow danish money blogger is this post sponsor. His name is John, and he writes in danish about hands-on money-saving tips and other money/finance related stuff at vilebo.dk

My Kakeibo Experiment, Part Three (Final)

My Kakeibo Experiment, Part One

My Kakeibo Experiment, Part Two

I did this experiment because I read in Your Money or Your Life that you could cut your expenses at least 20 % by keeping note of every cent that goes in and out of your life.

So I wanted to do a three months experiment to see if that claim was true.

Spending

In May I had the following spending in the four categories:

Category 1 (Necessities) = 2.425 DKK (231 $)

Category 2 (Wants) = 1.874 DKK (134 $)

Category 3 (Unforeseen) = 0 DKK

Category 4 (Investing) = 30.000 DKK

Total spending = 4.299 DKK (432 $)

The Averages

Average amount pr. transaction = 195 DKK (24 $)

Average amount pr. day = 139 DKK (14 $)

Average transaction/day = 0,7

The Comparison

Catapril 2020march 2020may 2020% Improvement
1571315522425136
278898991874321
35584500GREAT
40030000GREAT
Total1416029014299228
april 20′march 20′may 20′% Improvement
Amount pr. trans186161195-5
Amount pr. day45697139228
Transactions/day2,450,60,7250

To Summarize

Did I improve more than 20 %??

Oh yes, I did! 

From my worst month (April) to the previous month I improved 228 % on average. And I improved 321 % in category 2 which is the “Wants” category I would like to have close to zero spendings in.

Go ahead and try it yourself. Let me know if you can improve at least 20 % as well!

Blog Sponsor

A fellow danish money blogger is this post sponsor. His name is John, and he writes in danish about hands-on money-saving tips and other money/finance related stuff at vilebo.dk

Minimalism and Quarantine. Weekend Reads

Being back in Denmark isn’t that bad at all. The weather is super awesome, and I’m on the countryside on an island called Langeland (I call it Long Island).

There is a lot time to read and binge watch inspiring movies.

Here are some handpicked articles and videos I have enjoyed the last couple of days I would like to share with you.

Articles and Videos

25 Things to Do with Your Family While Stuck at HomeBecoming Minimalist, by Joshua Becker. One of the most awesome minimalist bloggers. He has written a profound article about what to do with your family in this funny time.

No, You Didn’t Just Lose Half Of Your Retirement SavingsMr Money Mustache, by Pete Adeney. The godfather of the FIRE movement has written a good article on why have lost any money in the recent stock market crash.

How To Live A Mortgage Free LifeThriving Willow, by Peter. Tiny house builder, Peter. Has an older post how to live a mortgage free life. He is about to write a guest article here on Wannabe Walden. So stay tuned.

Index Funds The MovieIFA. IFA is an Index Fund provider and have made a 12 step movie series. But if you are a nerd like me, you can watch the entire thing in their documentary.

How LITTLE Money Do We Need In Order To Become Financial Independent?

25 Times Your Annual Spending is A Lot of Money

Let’s be honest. If you are reading this as 20 something years old, and you have just started to make some money. GOOD FOR YOU! You are better off than many other people.

But not everybody is that lucky. Some might just get all these “FIRE information” when they are 30, 40 well maybe even 50+ years old.

Nobody told them they could do what they REALLY wanted if they just saved and invested some money.

BUT! Even if you are stoked about the idea of chasing FIRE, and you are 25 years old. If you are a diligent saver and save 60 % of your income. It will still take you 12 years of working, saving and investing. (7 % annual return)

If you start when you are 25 years old, it means that you will be 37 years old when you have reached your goal of 25 times your annual spending.

That is not bad at all.

But you would still have wasted a lot of time being at a soul-sucking job you don’t like.

Psssst… My Little Secret You Can’t Tell Anyone

I got several new friends by being a part of this FIRE community. And many of them are super badass. The ones that are probably the coolest are the following:

Jacob Lund Fisker

Pernille Wahlgren 

Pete Adeney (Don’t know him personally)

They do differ a bit from each other.

When you meet Pernille she seems to have a very normal/glamorous life with expensive vacations with the entire family. And Jacob is a bit more extreme and is spending less than 10.000 $/year with no kids. Pete Adeney has one kid, he does own a couple of cars but prefers to bike around.

But the thing they have in common is that they have all reached financial independence by having a normal job.

Said in another way. They all have more than 25 times their annual spending saved and invested.

But they have another thing in common. 

And here is my “secret”. 

Not any of them touches the principal of their portfolio. 

Yep, that’s right.

All of them have some sort of new business or job, that covers their expenses. None of them uses the money they have in the portfolio. It is more like a nice cushion if they didn’t feel like making an income.

But FIRE is not about not working. It is about doing stuff you like more, and you decide how many hours you feel like doing it.

So why should you save up 25 times (or more) of your annual spending? To “retire”, but never touch that principal.

Why don’t we just save up 2-5 times our annual spending? Do a bit of work, which is nice. Go for a couple of mini-retirements. And let compound interest do the rest of the work?

Do We Even Need 25 Times Our Annual Spending?

“How much money you would like to retire with??”

It is often the question we hear when we talk about personal finance. But it is the wrong angle to ask the question.

How LITTLE money can we retire with is the right way to ask that question.

The “25 times-your-annual-spending-rule” is based on the thought that we never want to run out of money. And why is that?

What if the day we hit the graveyard, that will be the same day that our accounts are empty. If that is the case. We could change our goal.

The average danish person is going to be 81 years old. 

So if we want to hit the graveyard with no money. AND we don’t want to have an income from when we are 65 years old. (Which is almost impossible because we have the public retirement funds)

That means we only need to have 16 times our annual spending saved and invested. Because we have only have 16 more years to live.

Even with 16 times our annual spending, and a conservative allocation of 50 % bonds and 50 % global stocks (because we are old and worried about stock market crashes). You only have a 5 % chance of running out of money.*

At the bottom 10th percentile you still end up on the graveyard with 2 times your annual spending to your name.*

And we are more than likely to end up with MORE money than when we started our retirement as 65 years old.

You can have as little as 10 times your annual spending in a 100 % global stock portfolio and STILL only have a 45 % chance of running out of money.

And remember the goal was to have an empty account when we were about to die.

Early Retirement 2.0

So how LITTLE money do we need to retire early?

This graph will show you how much you need to have saved and invested to hit 16 times your annual spending at age 65.

The assumptions are the following:

  • We spend 25.000 $/year (175.000 DKK) (That is what Pete Adeney is spending, which is not too extreme.)
  • We invest in a 100 % global stock portfolio

Or we can put it another way.

How many times our annual spending do we need according to our age, to hit 16 times our annual spending at age 65.

So if you read this at 40 years old. And you would like to spend 15.000 $/year when you are 65 years old.

You are going to be perfectly fine if you have 51.000 $ saved and invested.

From that point, you can just earn what you are spending. Which is probably something you can earn by working part-time or work for a couple of months each year.

Or!

Just continue working, stashing up way more cash than you would ever need.

At the moment I have about 75.000 $ (520.000 DKK) invested, which is about 4-5 times my annual spending. If I just leave that money till I’m 65 years old they will probably compound* into something like 640.000 $ (4.400.000 DKK). (After inflation)

Which is more like 36 times my annual spending.

In that case, I will be 65 years old, but I have money for the next 36 years, without relying on interest there is more than inflation.

So take it easy!

You probably have way more money in your portfolio than you need to!

*www.portfoliovisualizer.com

Got Questions? Write Me!

I would always like to hear from you.

No matter what you have to say!

Write me at:

Loui@wannabewalden.com

Video Interview for Pernille Wahlgren

One of the awesome things of chasing FIRE is that I get to meet a lot of awesome people. One of them is Pernille Wahlgren, who is one of the most badass financial independent woman I know.

She asked me if I wanted to do an interview for her online course.

Here is a teaser for the 20 minute long interview on her online course. (Unfortunately it is in danish).

You can check her out at: pernillewahlgren.dk

Going Outside of the Tribe

The more I look around, the more I realize that we might be on of the biggest tribe animals on this planet. Going outside of the tribe, and being a lonely wolf, can be scary.

Being a part of a tribe was a good thing back in 10.000 BC. Because the only thing we were worrying about was the following:

  1. Will it kill me?
  2. Can I eat it?
  3. Can I fuck it?

Our brains still has this way of thinking. That’s why we end up following the tribe. Because it will be easier to kill, eat and raise a child if we are in a tribe out in the nature, trying to survive.

Things Happens Outside of the Tribe

The thing is. If we follow a tribe, our lives will end up like the tribe. Which would be awesome if we daily feared for our lives. The tribe would have our backs.

But in a modern society, where tigers are locked up in cages at the local zoo, our meal is just around the corner and the kid is at the kindergarten. There is no reason to be a in tribe.

The modern (average) tribe will do the following:

  1. Get an education
  2. Have some student debt
  3. Work from 9-5 for 50 years
  4. Have some kids they don’t have time for
  5. Eat +3 meals a day, and be overweight
  6. Get divorced

And the tribe do so, because that is how we define a prosperous life.

If we step outside of this tribe, new windows will open. But the entire tribe will tell you how the tiger is going to kill when we are on our own. Because that is how our brain works.

How I Step Outside of the Tribe

Here are 4 things I do, which is “unusual” for the tribe.

Not Having a Mobile

I have never been more present social than I’m right now. And that’s because I don’t have a mobile.

The thing is. The people who are closest to me, is getting more and more pissed about me not having a mobile. Because they can’t contact me when they feel like it. They do not pay attention to how I devote 100 % of my time to them, whenever I’m with them.

That is called Loss Aversion.

Loss aversion is the fact we find it more painful to lose 100 $, than the joy of finding 200 $.

People are hardly noticing me not looking at my mobile every 10-15 minutes, but are super pissed about that one minute every 14 days that they can’t get in contact with me.

And that is why “the tribe” is keep telling me to get a mobile.

Eating 1-2 Meals a Day

Eating is a very social thing. Whenever I tell people that I’m not having lunch today, they are about to fall down from the chair.

If we say that we spend around 45 minutes prepping, eating and cleaning after each meal. We then devote 2 hours 15 minutes consuming calories each day.

Eating less frequent is one of the most awesome habits I do and has several benefits:

  • Saving time = more productivity
  • Saving money
  • Eating healthier
  • Eat as much as I like
  • Drinking more water
  • Clearer skin
  • Staying healthy and lean

Saving + 50 % of My Income

When I tell people about me chasing FIRE. People often understand it. But will never try to do it themselves.

I’m still trying to figure out what they are fearing. The conclusion so far is that people is so scared of stepping outside of the tribe. Just the thought of “losing” money in the stock market, is enough for them to stay in the comfort zone, and not leaving (just for period) a job they don’t feel like.

And they focus more on the “Spending less” than they focus on the “Do what you want” part of the equation. Which again is a Loss Aversion thing.

My mind can’t grasp the idea of people showing up at a job for 50 years if they could do whatever they felt like. If we could cherry pick activities without worrying about our finances, I can’t imagine that we would live the way we do now.

Don’t get me wrong. I don’t think that people will do well sitting in hammock. But the solution is not how we are living our lives now.

Minimalism

The ambition of not wanting to own stuff is still super weird to many people.

It seems like there is an equivalent of how many things we have and how happy/successful we are.

Which is not my reality.

I believe in presence and empathy, which can be done for free without gifts or other stuff.

Why Consuming Less is More Important Than Politics

The other day we had a election for a new government in Denmark.

And I’m really pleased about the result.

It turns out that we get a new socialist government, which I think is good because they are the ones who focus most on the environment.

I voted for a party called Alternativet because they focus the most on the environment. Sadly they didn’t do to well.

Politics is Bullocks

Don’t get me wrong. I feel very privileged living in a society where I have the opportunity to vote in a democratic election. The alternative to a democratic system is often fatal.

But often I find politics hypocritical. Especial when it is about the environment.

Politicians and electors often say/vote something, and still have their airplane ticket to Thailand in their drawer.

And yes – I have three airplane trips planned this year. Which I don’t feel good about. In a couple of weeks I’m going to Italy, and I will go by train if it is possible.

Action > Politics

If you are concerned about the environment, how we act is way more important than what we are voting.

I think that everybody should vote, but voting doesn’t make a person an environmentalist. Action does.

If you however hate immigrants and want them out of the country, you can’t just start to throw people out because you feel like it. Then you have to vote. (But please don’t vote for people who hate immigrants).

But it is different about the environment.

$1 Spent = C02 Emissions

I don’t care how people spent their money. But if we spent less than we earn, we would be more environmental than if we would have spent all of our money.

I could go out and spent almost 3 times as many money as I’m currently doing. But I’m choosing not to in order to be environmental and financial independent.

Fortunately there is a direct correlation between being environmental and trying to cut back on our spending.

The picture below is from a presentation I made for the school I’m currently at.

School Project Video On FIRE

For a month ago I said yes to participate in two young boys school project about financial independence.

I said yes, because I know how important the youth is.

In every single rowing club I know, the future success of the clubs determines on how big (and good) of a youth department they have.

All of the rowing clubs who neglect the young ones, is slowly digging their own graves. As time past by, there will only be grumpy old men back at the club. And that is not to appealing to anyone (sorry old men).

FIRE and Kids

Sometimes I feel frustrated about that I never got introduced to FIRE as kid. I’m quite sure that I would have been mature enough to see the benefits of that lifestyle, and probably be financial independent at my current age.

That’s why I would like to give my knowledge about FIRE to as many kids as I can.

They should know from very early age that we are able to shape the life we want, and not what society expect from us.

And that the road to happiness is not filled with mindless consuming.

I told the two boys that I was willing to come a make a presentation about FIRE on their school if they wanted to.

If you read this as a kid, and think it would be fun for your school to hear about FIRE. I’m willing to come and tell about it. For free.

Feel free to contact me on: Loui@wannabewalden.com

The Video

They told me they got an A for the this project.

Unfortunately it is in danish with no subtitles.


7 Benefits of Not Having a Mobile

https://www.dbphoto.dk/

I haven’t had a mobile for the last month. It happen by an “accident”.

For a month ago I got fired from my job. And when had to have a phone for my work, I decided to ditch my private one.

The last day I had to deliver the phone back.

So there I was. Without a phone.

A bit shocked about being fired from my job, I didn’t feel like going to town to shop for a new phone. I just wanted to take a some days off, relax a bit, and then shop for new phone.

A couple of days into my “I-have-no-phone-at-the-moment” life, I started to enjoy feeling unconnected.

From days, to weeks to now a month without a phone, I have no desire of rushing into buying a new phone anytime soon.

Here is the list of things I enjoy the most of not having a phone.

SPOILER ALERT!

There is one thing I hate by not having a phone.

1) Being More Present

This might be a obvious one.

But by not having a phone, and being with somebody. I force myself to interact with the person on a deeper level than what I normal would. If this person starts to bore me, it is the easiest thing to grab my phone, and start scrolling.

I have started to notice that some of my friends can take up their phone and start scrolling for a couple of minutes in the middle of our conversation. Which is so ignoring!

The most scariest thing is that I’m 100 % certain that I have done that way too often myself.

2) Less Stress

I could feel a vibrating item in my pocket for weeks after I got rid of my phone. But I had no vibrating item in my pocket.

It was like 5 % of my unconscious mind was alert about my phone.

That “alertness” is gone after a month of not having a phone.

3) Reaching Out More

When was the last time you asked someone:

“Excuse me, what time is it??”

The only wrist watch I have had for years, has been a heart rate watch I used for my rowing training. And I kept breaking them. So the last time I broke the watch, I didn’t feel like turning it in for a new one. Just like the mobile, days without a watch turned into weeks, and then months. And now I just like not having a wrist watch.

That means I constantly ask people what the time is.

And that act alone, has made me talk with 10+ people I wouldn’t have.

4) No Stress About Battery

The feeling of plugging an almost dead phone into the charger is so satisfying.

But why is it satisfying?

Because we have stressed about that we need to find a charger soon, because the world is coming to an end if I don’t have my precious phone.

5) JOMO

We all know the term FOMO.

Fear

Of

Missing

Out

I started to enjoy a new one.

Joy of missing out.

There is direct correlation of me being surprised about my friends telling me stuff they have been doing. And me not having a phone.

I spent less than 10 minutes a week now on instagram, which would be my main source of my friends “gossip”.

When I don’t get this gossip, and just don’t know what my friends are up to. Except if I meet with them. Which is an awesome feeling.

6) Doing Nothing

I have completely forgot the feeling about being bored.

The last time I remember being bored was back when I was a kid.

Sitting down, maybe waiting for the train and doing absolutely nothing.

Is super nice!

7) Saves Me Money

No need to think about cell phone deals.

Or worry about breaking the screen.

My Main Problem of Not Having a Phone

As the avid reader knows. I will be spending the next 3 months on a school where I’m going to sail, and just have a good time.

The “Just-have-a-good-time” part often involves beer.

And the only payment the bar accepts is through an app.

Not having a phone, means that I currently have no apps. So I can’t pay for my beers! Which is a pain in the ass!

The Shop Shelves Mentality

Imagine that you stand in the alley on the picture above.

There are some rubber boots on sale. I know your entire family has at least one pair of rubber boots. But hey! They are on sale.

There is the müsli your spouse love.

And it is friday, so you have to pick up some candy for the kids two.

While we are at the candy alley, lets just buy something nice for the adults too.

Let’s Scale Things Up

What if we replaced the rubber boots with an annual 4 week exotic vacation.

And the müsli is now a new car that your spouse loves so much (bought on credit)

And remember the candy? That is just some nice miscellaneous shopping. That can be the seventh pair of sneakers. Or the third “spring” jacket.

The Product We Don’t See

There is another product on the shelves that most of us don’t put in the basket.

We all want it.

It is the big box of FREEDOM.

The thing is that whenever we don’t pick something from the shelves. We automatically pick the big box that has the big FREEDOM letters across it.

Whenever we don’t pick a 20 $ product, we can reach for the “12 HOURS OF FREEDOM” box. (depending on how frugal you are)

Don’t Sweat the Small Stuff

How to get most bang for the buck is by focusing on these three things:

  • Housing
  • Transportation
  • Food

Don’t try to be nitty gritty about a small purchase if you drive around in a almost new car bought on credit.

Minimize the cost on those three bullet points, and you are already 80 % of the way to become financial independent, and do whatever you like.