Managing Some of the Risks as Vagabonds

Life is full of risks whether you live an ordinary life or a slightly less ordinary one as we currently are. Despite that everyone has to deal with risks in their lives, it seems we get highlighted in conversations as pursuing a riskier path because of our current adventure. Maybe we are taking bigger risks, but I don’t really think so. Risks need to be acknowledged and managed, so how are we managing some of the perceived risks?

Healthcare:

This is a potentially big one depending if and where we might need medical attention. Unfortunately, as Canadians, if we leave the country for more than 6 months there are very few travel plans available, because the common plans all recoup part of the costs from government healthcare system – which poses restrictions beyond around 6 months.

Our main concern was an injury while in the US as they have one of the most expensive healthcare systems in the world. To manage the risk of going bankrupt due to a serious illness, we carry a policy through Lifeboat Medical Insurance. They offer different deductibles which allowed us to pick a deductible that would sting, but not break us and cap the potential liability while keeping the premium reasonable.

In our first year, we did not use the policy, so we are out the premium, but slept soundly while in the United States knowing that we had a worst case scenario that was manageable.  We will be renewing for the same piece of mind.  If we were cruising exclusively in the caribbean where health care costs are manageable we would consider what other cruisers do and go without coverage.

Dropping dead in my cubicle from a heart attack in my early 50’s with nothing but a growing bucket list.

Well, I think this one is going well.   Although I’m not sure the bucket list is shrinking.

Piracy

We have been asked about this on numerous occasions as though every square mile of the ocean is covered with pirates.  Do they exist?  Yes, in some regions they do, and there are parts of the western caribbean that are recommended to leave a wide berth from shore to stay beyond the range of pirates.  Our strategy is to avoid these places altogether.  Fortunately there is a lot of current information on high risk areas so cruisers like us can stay informed.

The eastern caribbean does have crime and theft, not that the US or Canada are exempt, and we generally don’t venture far on shore at night in unknown areas and we can lock the boat at night.  A lot of people are actually scared of dogs down there as well, so despite Magnus being a friendly animal, I’ve been told it can be a good idea to encourage him to bark and have him roam around on deck (which he does anyway), as would be thieves will be scoping out the boats they are considering long before they come aboard.  Is it a fool proof plan?  No.  Will we consider a gun? No.  We will just continue to keep informed and try to be aware of our surroundings.

Selling Our House? Are we now priced out of the market forever?

For the past few months, the exact same model house has been for sale on the same street for the same price we asked, so no, we are not priced out forever. Despite the Kitchener-Waterloo area housing market rising slightly last year, our neighbourhood held steady, likely due to the supply of new homes around the corner from the recent arrival of builder/developer Mattamy to Kitchener.

We had considered renting the house out, but given that there likely would have been some headaches with maintaining a rental property remotely.  Plus, the going rental rates were low, so unless we had notable capital appreciation it wasn’t justified.  We weren’t keen on providing subsidized housing nor were we attached to the house so our decision to sell has worked out well for the past year and we have a strong suspicion it will be similar next year.

What about offshore sailing risks? Isn’t it dangerous out there?

The ocean certainly can be powerful and both of us have a healthy respect for how quickly conditions can change. Experienced cruisers note that really heavy weather seems to be encountered about 2-3% of the time.

To manage the risk of dealing with heavy weather we consulted with  Mahina Expeditions (who run an offshore training school) on our boat selection and our intended plans. We did our best to educate ourselves how to equip the boat and to be very thorough at inspecting and maintaining the boat in a seaworthy condition.  Could we miss something? Absolutely. Could your tire blow out on the expressway?

We also are aware of a number of tactics that can be used to manage bad weather and have tried some in moderately rough weather to learn how our boat will handle and which techniques are most suited to our boat.

And as for 2-3% of the time: That would translate roughly to 5 to 7.5 annual ‘scary’ moments for a full time daily commuter. I’m sure I had that many on the highway in winter alone, but yet people do it every day without a thought. Or winter tires.

Wont it be hard to re-adapt when you come back?

I’m sure it will be, but the amount of time we spend on the move, planning and maintaining might surprise you. We are planning to be in New York City around the 1 year mark from our departure which will put our tally around 7500 nm sailed. On average we do about 5 nm/hr, bringing the tally to 1500 hrs spent underway, or 75% of a full time job. Add in the time planning routes through unfamiliar water, time spent anchoring where no miles are logged and maintaining the boat and we surely are at or beyond the 2000 hr mark of a full time job. Having a more ambitious itinerary than many cruisers will hopefully work to our advantage to mitigate some of these risks.

Yes we do have a lot of leisure time and I’m certainly not complaining, but there is a lot more to this lifestyle than sipping cocktails on the beach.

Another aspect is we have trimmed our lifestyle down appreciably, so I could pursue a field where I may love my job instead of just liking it, or find something I like and am good at, but sacrifice salary for a few extra weeks here or there so that I can find a better balance to keep me focused when I am at work. Chrissy already has this to some extent, so if I can find the same we will actually be rocking when we return.

Haven’t you wanted to strangle each other yet in such a small space?

Sure we have our disagreements and our times when we need to do our own thing.  Balancing work loads and sharing tasks on the boat is an area where we still need to work on.  Fortunately we have many good moments to make up for it.  Other cruisers have said that you will have higher highs and lower lows while cruising.  We would agree.

Keeping in touch with friends and family

This has been hard. We tried to visit with as many people as we could when we were in Ontario and I’m sure we missed a few. Likewise for our time in Nova Scotia. While we are happy to have people come visit, we know it isn’t everyone’s idea of a vacation (but if it is, send an email and we’ll make plans). I wish I could afford a Catana 471 catamaran and fly close friends and family down to visit to keep in better touch while simultaneously having a big enough boat to afford guests more privacy. Unfortunately I’m still working on formulating this plan, so you’ll have to be patient for a decade or more.

So, in the meantime, hopefully we will be able to catch up properly when we return. On the plus side, we have met a few new interesting friends that have been out doing similar things and hopefully we will keep in touch at least electronically with some of them and maybe see them in a decade or so when we inevitably get the urge to go sailing again.

Dealing with the financial setback from two years of temporary early retirement.

Despite missing a couple years of savings potential, I think we will have a much lower risk than many people for adequately planning for retirement. We have been tracking our costs much closer now than we ever did while working, so we know what we need to cover off the essentials of life and where we are willing to make sacrifices. Plus, we are gaining an idea how to entertain ourselves when Monday to Friday aren’t already spoken for.

I suspect we have learned a few things that will work to our long term financial benefit as well:

• Our current living space is around 250 sq ft so our idea of a big house will likely differ from the norm. In my experience, personal residences only cost money and never cut you a regular cheque or dividend. Therefore, the smaller the house the more free cash we will have for other interests.
• Purging our ‘junk’ before we left was liberating. The common theme among the stuff we kept was that it generally was something that was used to provide some sort of experience.  This will likely assist in avoiding making foolish purchases in future.
• Because we don’t have much space for extras, we value quality over quantity more now than ever.
• We continually have to get the boat to convenient places (ie. Walking distances) for the essentials like groceries, water, laundry, fuel and entertainment. If we follow the same strategy when we return to land we might be able to save thousands annually by living in a community with the amenities that matter to us nearby and going to a 1 car lifestyle

The big counter argument financially is we may want to do something like this again in the future and boats aren’t exactly great investments…

Managing currency risk, notably the plummeting Canadian Dollar:

Being Canadians, we certainly have been well aware that the dollar has been falling steadily since the start of the year, and how this influences our costs over the winter. We had a hunch based on the economic news a few years ago that parity with the USD was not the new normal, and managed the potential risk by gradually buying US dollars during the year or so before we moved onto the boat. We also shifted growth investments out of Canadian equities into international ones to reflect the relative time we would be spending in Canada vs internationally.

We did get stung a bit with the extra drop that oil caused on the Canadian dollar in recent months when we needed to top up our US account for next winter, but at least we are hedged now against the possibility of a 65 cent dollar in the new year and our average exchange rate is much better than the current one.

The good news for those that don’t have the time or share my interest in these matters is that you can save yourself the hassle of working for less than McDonalds wages and just find a competent advisor instead to manage these risks for you. They would have done the same for you.

And lets not forget the Jones’

Frankly its hard to keep up with anything when you are averaging 5 miles an hour, but if the Jones’ have a new car and renovated their kitchen I’m happy for them. They can carry on making their payments.  I don’t miss staring down the street getting caught up wondering how they afford their shiny big SUVs or fancy new furniture. This was and likely still is a weakness of mine (and I suspect a large chunk of society) so it is liberating to get away from it all and follow your own path, deciding what is important to you, not what you need to be ‘normal’ whatever the heck that means.

And seeing as statistically speaking, very few readers will have made it this far and I’m keen to enjoy the sunshine along the Bras d’or Lakes shoreline, it’s time to walk Magnus.