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Musings from Mallorca. Some on Financial Advice. Some on how to legitimately reduce your Spanish tax bill. Plus some Life Stories from our fabulous Island.

Seven Habits of Financial Success for Yacht Crew
27 April 2016 @ 19:09

by Sandy Paterson

The Seven Habits of Financial Success for Yacht Crew

Picture the time when you are ready to leave the high-life that is Yachting, hard to believe I know but stay with me.

Your Yacht-free life is ahead and the choice of what to do now is all yours, or is it? I have come across many who either cannot leave even if they wanted to, or are left “painted into a corner” financially because of a lack of planning. 

Back in the present, it’s easy to fall into the high-life of a crew-member (junior or senior). Tax-free income, food and accommodation all paid and 2500 – 7500 Euros a month burning a hole in your Helly Hansen pockets.

Assuming you do not want to end up “painted into a corner”, what habits can you cultivate to make sure you have choices in the future? 

The Seven Habits

Amazingly obvious in some cases, together they will help you invest in yourself. Let’s face it nobody else is going to.

1) Spending Money

Set yourself a monthly limit, once you have reached it, stay on-board where you cannot spend more. Without this nothing else will work.

2) Bank Accounts & Currency Brokers

Why pay huge fees and lose money on exchange rates every transaction by using your debit card to move money. If you earn your money in Euros have a bank account In Euros. If you need other currencies open a multi-currency account. An Offshore Seafarer Account is probably best.

When exchanging larger sums using a currency exchange broker will save money long-term. Debit cards are easy, but stop and think what could you do with that money instead?

3) Get out of Debt

Start with the highest rate debt (usaully credit cards) check for 0% balance transfers on Credit Cards and use them. 10000 euros in the bank earning 2%, whilst holding credit card debts at 22% does not make any sense, pay them off.

4) Emergency Cash

Now you can build up some emergency cash. Ideally 3-6 months’ income in your Seafarers Account then leave it alone. Immediate access is the priority not interest rates. Set this aside as it is for emergencies only.

5) Education

Decide which courses will further your career and set aside the money. Don’t forget personal development outside of Yachting. Invest In your education and the benefits will far outstrip the cost.

6) Property

Where do you want to live, how much deposit is needed? This medium-term money should be in tax efficient savings plans designed with seafarers in mind and advice is crucial to get it right. 

7) Freedom to Decide

Invest for the future to give yourself options when Yachting life is finished. This involves long-term investment and tax planning to ensure you reach your goals and professional advice is invaluable.

Ideally save 25% or more of your monthly income. Yes it’s a lot, but bear in mind if you were shore-side you would be paying at least that much to the tax-man, so get saving.

Other things to consider

Whilst setting up for your future consider the following:

    •    Establish your residency, this is masively important and dictates your tax status. You would be amazed how many yachties we come across who are unsure or even incorrect about where they are considered resident.

    •    Don’t forget the freebies – ask your Captain what Medical Insurance, Pensions and any other benefits you may get and consider asking for more!

Seek out Professional, Independent Financial Advice from people who know the Yachting scene.

Take a look at our dedicated Yact Crew Website for further information.

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