Right, let’s get something straight. You shouldn’t really be thinking in terms of pensions, pension plans, personal pensions or even retirement. Here’s why:
The Cambridge English Dictionary defines a pension as “an amount of money paid regularly by the government or a private company to a person who does not work any more because they are too old or have become ill”.
Does that sound like you? Does it even sound like a version of yourself that you’re looking forward to becoming?
Very probably not.
You’re not going to like what the dictionary has to say about retirement and retirement plans, either. It describes retirement as “the period in someone’s life after they have stopped working because of having reached a particular age”.
There you have it. Pensions and retirement are for people who are old and/or sick. Does that sound like yacht crew? It’s doubtful the superyacht industry could even function if all crew members were elderly and sick.
Most superyacht captains are aged between 40 and 55. That was old in the Middle Ages, maybe, but not these days. These days, 40 is barely middle aged. And 55 is still prime-of-life territory. So you’re hardly ‘old’.
And you’re very likely as fit as a fiddle. An active job, with regular exposure to the sun and a diet of pretty good food from a galley run by a proper chef will do that for you.
With this in mind, it’s best if we ditch the idea of pensions and retirement. Instead, let’s reframe it as something far more exciting and proactive. Because what are we really talking about here isn’t it? We’re talking about your life after yachting. A life that will ideally be an active, fulfilling and satisfying one for you. A life that gives you as much control over your time as possible. You’re not really looking for a pension or a retirement scheme. You’re looking for a financial plan that will set you up so you are financially independent—ie. you aren’t reliant on an employer or a job to pay your daily living expenses. You’re looking for something that will fund a life of active choices, rather than one of passivity.
At 45 or 55 or 60, most people aren’t looking to ease into a life of sloth. They have dreams and ambitions they still want to chase. You do too, don’t you? If you were able to stop working on board the yacht today, what would you fill your days with? You would do things that give you a deep sense of purpose and fulfillment, wouldn’t you? And to do that, you need money. You need to have built up sufficient wealth to allow you to do the things you want to do.
Forget pensions and retirement…
Instead, start developing a mindset that concentrates on what financial resources you need to live your ideal, independent life.
Here’s our 10-step plan for doing so:
- Accept that when you leave yachting, you probably aren’t going to retire and draw a pension, waiting in a worn-out body wracked by ill health for the Reaper to come. You are going to have decades of active life ahead of you.
- Acknowledge that if you want to live the remaining decades of your life with the maximum amount of control over your time, you’ll have to be financially independent.
- Figure out what financial independence looks like for you. How and where do you want to live your life? And how much money will you need to pay for that? Note: To generate an income of Eur/USD 50,000/annum at today’s rates you will need Eur/USD 1,000,000
- Determine your starting point. How much money do you already have?
- Work out how much more money you will need to add to what you already have.
- Set your deadline. Our recommendation is you pick a date that is sooner rather than later, yet still practical. Yachting is a fickle industry and superyacht captains are especially vulnerable to leaving abruptly, either by their own decision or by someone else’s. So the sooner you are financially independent, the better. Also if you are going to have your dream life after yachting you will need to have the time to live it…
- Make a financial/investment plan that will result in the amount of money you need to have by the deadline you’ve set.
- Stick to the plan. Repeat: stick to the plan. The number one reason superyacht captains who have a financial plan still fail to achieve their goals is that they don’t stick to it.
- Monitor your progress and adapt your plan as needed to keep you on course. (It’s a lot like commanding a superyacht.)
- Exit from yachting on your terms to your ideal, independent life.
What proper investing looks like
Choosing the right investments for your plan depends on a range of things, including:
- How much time you have to reach your goals.
- What opportunities and capabilities you have to save money and invest. (Bear in mind, you’re probably earning tax free, so your ability to do so is better than that of most people who work ashore.)
- Do you understand that risk is your friend and ally? Risk in investing is the equivalent of speed on a boat. Used correctly it will power your financial plan to where it needs to go.
- What are your investment red lines? What industries are you uncomfortable putting your money into? And the reverse: which ones have massive appeal to you?
- Is the mix of investments diverse enough? We always say to our clients, “Don’t put all your eggs in one basket. Don’t put all your baskets in one cupboard. Absolutely do not have all your cupboards in the same house. And make sure you have multiple houses (metaphorical houses, not actual ones) in different towns, countries and continents. If you could spread your investments over several planets, even better. In other words: don’t leave your financial plan open to failure due to overexposure to one type of investment.
- How flexible your investments are. For example, property is a very popular investment choice. But property can be hard to sell. As a result, your money might be difficult to release quickly should you need to do so due to a change of plan.
- What opportunities do your investments allow for funding your eventual, actual future retirement? (Many years down the road.)
Build a diverse investment portfolio that works for you
An approach to investing that you’ll hear a lot in yachting is, “Put your money into the stock market or into property”. While investing into either could be a solid idea, it won’t make the most of your investment power. (Also, it does take you into the territory of putting your eggs in one basket, or at the very least, all your baskets in the same cupboard.) To unlock your full investment potential, you need to look at a whole range of investment opportunities that suit your financial ambitions. That is a lot of work. And, contrary to popular belief, does actually take a bit of knowledge and expertise.
This is an exciting, long term project, but to maximise success you will probably need help, both for set- up and for ongoing review and amendments.
You don’t have to do all this work (from goal setting to planning to successful execution) yourself. Why not speak to us (no obligations, no strings attached) to see whether we’re a good fit to help you get yourself set up for your ideal, financially independent life after yachting?