Avoid Expensive Toys (boats, RVs, ATVs…)

Toys, toys, toys for all the good boys. No! There is no Santa and you are adults with jobs and responsibilities. Big boy toys are not wise financially and they are expensive. Here is why you should resist the temptation and find a cheaper hobby like say fitness.

Fishing for financial ruin

Everyone likes boats and the image of cruising some quiet inlet with beers in hand getting a tan while the water sprays your face. That sounds great but a boat can sink your finances faster than you can say Titanic.

  1. First of all boats cost a lot of money to buy, especially when new. Think $30K- $50K and up for a nice one. Most people finance their boats over five years or more just like cars. That means you get a second monthly car payment on top of the first one.

2. You have to have a place to store your boat. That means renting a dock slip monthly

3. You may also need to pay for dry dock storage in the winter in a cold climate

4. If you have lots of room at home you can store the boat in the back or by the side of the house. That is if your HOA allows it.

5. Now you need to buy a trailer and a vehicle capable of towing a boat if you don’t rent a boat slip. You are going to need a big pickup or SUV with a tow rating of 5000 lbs or more.

6. The boat will likely consume gas and a lot of it. I was at the gas station and the guy next to me was filling up the tank on his motorboat on a trailer. I asked how many gallons it took. He said 200 gallons! At $3.50 per gallon that is $700. Ouch.

7. One also needs to pay for the cost to tow the boat to the lake or ocean. Think more gas to spend as you are towing a heavy boat

8. Paying for maintenance on the boat also involves money. You have to service the thing

10. The boat depreciates just like a car but faster. Everyone wants a new boat not your used one.

Avoid jet skis and watercraft too if you need to finance. While they are more reasonably priced you still need to tow them, store them and fuel them up. Now if you have a lake house and place to store them and the cash to pay then enjoy. It’s fun just wear a life jacket to be safe.

Boat Costing Example: Tommy Titanic

Tommy wants to buy a new boat badly. The summer is coming fast. He thought about a used boat but they don’t have all the features he wants like bluetooth connectivity. So he is going to buy new.

  • Cost $35K plus $5000 for a trailer
  • 7% interest over 5 years
  • Fuel cost $3000 per year
  • Payment $792 per month over 5 years including$7522 in interest paid
  • This is quite expensive so Tommy decides to pass wisely while paying off his student loans and townhouse

Some more sensible options

  • Buy a canoe such as an LL Bean Old Town or one from REI. They start at $900 to $1500. If you pay cash then it’s no issue. As they are light you can put it on the roof of your SUV or station wagon and store in the garage. Better yet try to find a used one on Craiglist or Ebay.
  • Get a plastic kayak from a place like REI. They are light and easy to transport plus you will get good exercise in the process. Save your money and pay in cash. Get buff and tan in the process. If you are single your BF/GF will get in shape too.
  • Consider a row boat if you have a summer place or lake house. You can also get a small cheap sailboat
  • You can also consider a small motorboat with an outboard motor if you have a place to store. Buy used to save. This will work fine for fishing.
  • Consider renting a boat. Rich people do this at Cannes in France during the summer.
  • Go on a fishing charter
  • Get friends with a boat so they pay not you.
  • A final note. If you are a billionaire like Bill Gates or Mark Zuckerberg then go ahead and buy that 50 foot yacht. Deck hands and sea captains need jobs too.  : )

Toys for land lubbers

Boats aren’t the only kind of toys. Land lubbers can also blow their money on ATVs, motorcycles and dirt bikes. Again these depreciate and in no way are they good investments. If you buy a used dirt bike for $800 cash to keep at the cabin or in the shed no problem. Have fun and wear a helmet.

Avoid expensive big bikes like Harleys etc. They can cost $15 to $25K and are financed like cars. They also depreciate. Think of these as another car payment. Plus you will need to buy motorcycle insurance, maintenance, registration and fuel.

Example 2: Biker Bob

Biker Bob likes the new Harley bikes. He wants to get out and ride. Every day he passes by the dealership so he decides to investigate the cost.

  • Cost $11,299 plus tax Harley = $12,202
  • Financing at 7% interest over three years
  • Payments of $377 per month.
  • While the payment isn’t terrible it is the same as his car payment. Bob doesn’t need another car payment.
  • There is also motorcycle insurance to pay for of $800 per year.
  • Bob wisely reconsiders and passes. Instead he decides to save his money and buy a used Yamaha or Honda for $2500 cash on Craigslist so he can go out and ride on a nice day.

ATVs and dirt bikes are more reasonably priced but you may still need a trailer and a vehicle to tow them on unless you keep them in the country as in most places they are not street legal. If you pay cash have fun. If you need to finance skip it. If you have to have a motorcycle check out used bikes like Hondas or Yamahas or Suzukis at a lower price point.

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