Smith owns a 50’, 3 state room boat that cost him $700,000 when it was brand new. The boat is docked at a marina near Smith’s home and he has a part time maintenance man that checks the boat twice a week. Smith uses the boat on occasional weekends to take short trips with his friends and family. The boat is now five years old and requires some major mechanical and cosmetic work.
Smith is thinking about selling his boat and purchasing outright a 10% interest in a brand new 3 stateroom fractional yacht for $300,000. Smith likes the idea of owning a brand new yacht complete with warranties, competent management and a professional crew. He also resents being tied to the helm while his guests enjoy themselves on his boat. To compare the two options he creates the following table:
Total five-year cost advantage of purchasing a Monocle share compared to sole ownership can be as high as $1,000,000 despite purchase of a smaller boat and shorter trips close to home with sole ownership*
|Cost & Benefits||Sole Ownership His Current 50′ Boat||Monocle Fractional New Monocle 80′ Yacht|
|Annual Expenses (Dockage, Maintenance, Repairs, Supplies, Insurance and misc)||$152,000||$30,000|
|The Yacht and Amenities||50’ motor cruiser with 3 state rooms||80’ motor yacht with 3 state rooms, top deck Jacuzzi, jet ski, and tender|
|Crew||Smith (Family/Friends or hired help)||Professional crew of three with chef|
|Location||Short trips near his home||Caribbean, Mediterranean, Northeast US, South Pacific, and other locations around the world|
|Management||Smith (whenever he has time)||Independent professional management by Monocle|
*Individuals should review this information with their personal accountant and attorney.