Emma Parkes tells DockWalk.com why yacht crew need to have a financial plan in place for the future.
Working on luxurious superyachts cruising our wonderful world's oceans sounds idyllic. But the reality is one of hard work and the challenges of being away from friends and family. Consequently, it can often be a short-term career, so those working in the industry need to make sure they have a plan for life after yachting.
Emma raised the issue, that despite this being a financially rewarding career choice, many yacht workers fail to optimise their surplus income. Instead, common practice includes leaving significant sums on cash deposits or buying property. The former is a particularly flawed strategy if the goal is to build up reserves for future capital expenditure, as the value of cash reduces in real terms when interest rates fall below the inflation rate.
A concern flagged by Emma was that misconceptions surrounding investments and a lack of knowledge often prevent those in the industry from seeing the opportunities.
"There has been a lot of cynicism. I think, around the investment industry in yachting. And there have been some real horror stories of people being tied into investments for 20 years. Also, I think people do have a bit of fear of investing if they don't understand it."
Property investing has many advantages, but equally, it is not without its challenges. One concern is liquidity, which is the concept of being able sell an investment asset when the money is needed. Emma explained this and the dangers of placing all your bets on one type of investment instead of having a more diversified approach.
"Making sure your assets are liquid or at least a good portion of them are liquid is really important. Diversification reduces risk, basically".
In her final comments, Emma focused on the value of working with an investment adviser you can trust, as they can guide you through the unknowns and work with you to build a plan that suits your needs. In addition, they can match your investments to a personal tolerance for risk and ensure you maximise your returns through tax-efficient strategies such as Individual Savings Accounts (ISAs).
The message of this piece was one of fail to plan, plan to fail. Whether you are yacht crew or an experienced captain, whether your career on boats is short or long, you will not regret starting to think about your future early. Getting the right investment advice can be the difference in meeting not missing your long-term goals.
The contents of this article are for information purposes only and do not constitute advice or a personal recommendation. Investors are advised to seek professional advice before entering into any investment decisions. Please also note the value of investments and the income you get from them may fall as well as rise and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.