Whether new or old to the yachting industry we believe that, should you desire to leave yachting with more to show for it than good memories and a full passport, it is vital to put aside some of your income every month. After all, no one else is doing it for you! But is it possible to see what the likely outcome of this habit could be… and is it really worth it?
We have developed a wage and saving calculator which allows us to illustrate to crew how the effect of starting good savings habits can really pay off over time. The best time to start this is right at the beginning of a career. Let’s look at the different stages of an exterior crew member and what they could easily achieve:
Deckhand. Usual starting wage is around €2500 but is normally only for 6 to 9 months for the first couple of years (let’s use 6 for this illustration with a 5% return on any invested money). Putting aside 25% from day one will mean having a pot of around €12 500 by the end of year 2… You will still have had the chance to spend €22 500 over the last two years… that pays for a lot of good nights out and a nice watch (or two).
This seems like a good career so you stay in and work your way up; the average wage inflation in this industry is around 8% per year (though admittedly this tends to come in steps rather than a smooth progression).
Bosun – After 5 years you are now a Bosun earning approxs €3500p. If you have continued to save the 25% then by the end of a 5 year Bosun job you should have an invested ‘pot’ of at least €125 000…. a pretty good deposit on a property or a great start to a retirement plan.
First Officer – after 10 years in the industry you can realistically be earning €5000pm and by the time you get your first captains job 5 years later you could have saved more than €270 000.
Captain – it is well known that Captains’ salaries vary enormously but the last ten years of a captain’s career could put aside an additional €400 000.
This doesn’t just work for long term career crew… even just saving during a 5 year career could mean leaving the industry with up to €50 000 without really affecting your lifestyle in any way.
This is the power of the habit of saving plus the wonderful effect of compound interest; after 20 years in this industry just by saving 25% of your salary every month you can have a fund of €500 000. This buys you a lot of flexibility and control over your future.
Another way to look at it is to say that if you DON’T save anything during your career then after 20 years you would have SPENT €1.3million…. but on what?
This similar estimate can be done for all crew positions but the main message is that 25% of your income isn’t very much BUT can have a huge impact on your future choices and happiness.