Buying Today Vs. Tomorrow (#48) — Transcript
Updated: Oct 26
THE PICTURE OF WEALTH · EPISODE 48
Dustin Serviss works through a comparison of buying a boat now or waiting until retirement. The episode explores the financial tradeoffs and the value people place on enjoying an experience sooner.
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This transcript was generated from the episode audio and lightly edited for readability. It may contain transcription or speaker-attribution errors. Refer to the recording for exact wording.
Chapters
[00:00:24] Buying a boat now or waiting
[00:01:40] Comparing assets after sixteen years
[00:02:23] The financial cost of earlier enjoyment
[00:03:04] Renting and the other ownership costs
[00:04:16] Working through your own numbers
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Transcript
[00:00:01] Show announcer: Welcome to the Picture of Wealth, a podcast all about living more of your life now yet being responsible for your future. Lifestyle experimenter, wealth scientist, and financial coach, Dustin Service, shares life hacks, wealth tips, and interviews successful entrepreneurs on how they're thriving in happiness, purpose, and prosperity.
[00:00:24] Dustin Serviss: The question of the day is, what would be the impact on my investment plan or my money if I bought a boat today versus waiting till retirement to buy a boat? So the scenario here is, is a is a bit of a spreadsheet. And if you got a pen and a piece of paper, it'll be a lot easier, but I will make it really simple to follow along. So the the premise is this particular individual can invest twenty five hundred dollars a month, get a five percent return for twenty years. So they... Every month, they invest, the money compounds. And over twenty years of investing twenty five hundred a month, getting a five
[00:00:59] Dustin Serviss: percent return, you've got a million and forty one thousand dollars. Now, you know, we'll say person b makes the decision that they're gonna buy a two hundred thousand dollar boat. They're gonna save only and invest fifteen hundred a month because they need to make a one thousand dollar a month boat payment. So at the end of that twenty years, that person has invested fifteen hundred a month, and they have three hundred and seventy seven thousand dollars. Now, I've, you know, got the value of the boat at two hundred thousand. And, over time, the debt on the boat comes down to zero and the boat is paid off at year sixteen, you know, at
[00:01:40] Dustin Serviss: the end of year sixteen. So the value of the boat over time is going down, but I said at the year sixteen when the boat's paid off, it's worth roughly forty to fifty thousand dollars. The investment account that was doing fifteen hundred a month into investments at year sixteen seventeen is three hundred and twenty six thousand dollars. So in person a doing twenty five hundred dollars a month into investments at year sixteen seventeen. Their investment account is eight hundred and thirteen thousand dollars versus three hundred and twenty six thousand in person b, plus the value of the boat is fifty.
[00:02:23] Dustin Serviss: So that person has three hundred and seventy six thousand. That's a difference of four hundred and thirty seven thousand in net asset. So the person that doesn't have a boat has got, you know, more money. They've got four hundred and thirty seven thousand, but they don't have sixteen years of living the lifestyle of having a boat. So if you say, if a person boats twenty times a year or twenty days, that means that the actual cost of the boat versus the investment loss is about thirteen hundred and sixty eight dollars per day to go boating. Now I value, you know, family time one hundred percent.
[00:03:04] Dustin Serviss: And I think when I did this analysis, I didn't actually know it would be that much per day of use, but it does make, you know, looking at renting a boat for eight hundred dollars a day quite a good deal because I haven't even shown in the spreadsheet cost of gas, cost of insurance, cost of storage. It really, is a high cost per use. It's a fun time out there, but I think the essence is in how people value certain boats. A boat to get on the water with your family, you might be able to do that for twenty five or thirty thousand dollars. And you might be able to do that, just buy it, pay it off
[00:03:39] Dustin Serviss: in two years, and still be able to do the twenty five hundred a month into investments or real estate or however you're accumulating your assets. But, this, to me, was a a check-in, a check-in on the type of assets we buy. And if you want me to... You know, if you've got an asset that you're... Well, I shouldn't say asset, but a a toy, and you're considering, adding it to your lifestyle portfolio or your lifestyle asset portfolio, then let me know. I... I'm I'm curious about this as a place I'm passionate about in, in my lifestyle. So shoot me an email. Let me know what, what you're thinking or what kind of item it is
[00:04:16] Dustin Serviss: with these numbers, and, we'll put it in this spreadsheet, and we'll see if we can figure out if it's a good decision or a bad decision. Until next time, talk to you soon.
[00:04:27] Show announcer: If you found this episode valuable, share it with a friend. If you found this episode super valuable, leave us a review on iTunes. It will help us continue to bring you top quality content. For more information on anything discussed on this show, visit w w w dot service wealth dot com. That's service spelled s e r v I s s. Any investment topics covered on the show are not investment recommendations, and you should seek professional advice before making any investment decisions. This show was produced by Prodigi Podcast. Thanks for listening.