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Selling a home to live on a boat - does it really stack up?


thenortherner

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9 minutes ago, thenortherner said:

I have, yes.  I've been doing a hell of a lot of financial planning over the past month prompted by clearing of all debts other than a mortgage and having a pension pot worth sod all.

I essentially double my mortgage payment at the moment with an overpayment.  I can then stick £600+ into a lifetime ISA I opened.  I'll still have the house paid off in 10 years and rather than the 24 years outstanding, thus saving a massive chunk of interest and I will have savings to fall back on, and hopefully grow.  They're in a stocks and shares ISA spread over 3 funds.  I could pay more of the mortgage and nothing into the ISA but interest saved doesn't make it worth it and I'd have no cash to fall back on.

 

I always believed it best to pay off a mortgage as fast as possible. 

Ian.

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Just now, ianali said:

I always believed it best to pay off a mortgage as fast as possible. 

Ian.

I guess it all depends.  

I might be able to do it in under 10 years but then I'd have zero savings.

My current interest rate on the mortgage is less than 3%.  If I get 3% or greater returns on my ISA then I'm winning and it's a better use of the savings.

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Its hard not to be happy on a boat. Young men are unhappy because, as you suspect, they don't really want to be on the boat and they are cold, lonely, and living on beans and bad alcohol. Marina life can be ok, the view out of the side window is another boat very close, but if you are lucky you might get a great view out of the back door (find out about back cabins). Trouble is most (not all) people in marinas will be couples in their sixties and may well be a bit reserved towards a young single man. A marina will likely cost over £3000/year in rent, but will provide electricity and slightly reduce your maintenance costs (which WILL be MUCH higher than you are anticipating). An on line mooring with 'leccy should be your target (holy grail). Most important of all, find a way to keep that house and rent it out.  You could maybe start with a cheap old boat (steel, not plastic) and work your way up the "boating ladder", you are young enough to do this. What are your DIY skills like?

.............Dave

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Just now, dmr said:

Its hard not to be happy on a boat. Young men are unhappy because, as you suspect, they don't really want to be on the boat and they are cold, lonely, and living on beans and bad alcohol. Marina life can be ok, the view out of the side window is another boat very close, but if you are lucky you might get a great view out of the back door (find out about back cabins). Trouble is most (not all) people in marinas will be couples in their sixties and may well be a bit reserved towards a young single man. A marina will likely cost over £3000/year in rent, but will provide electricity and slightly reduce your maintenance costs (which WILL be MUCH higher than you are anticipating). An on line mooring with 'leccy should be your target (holy grail). Most important of all, find a way to keep that house and rent it out.  You could maybe start with a cheap old boat (steel, not plastic) and work your way up the "boating ladder", you are young enough to do this. What are your DIY skills like?

.............Dave

Thanks.

An online mooring with parking and facilities would be an ideal compromise and there appears to be some, but not many.

I'm loathed to lose the house so I'm looking at the alternatives I've posted.

In terms of running costs, where have I gone wrong?  I thought £1K a year for general repairs might be about right on top of what I've budgeted for the blacking/batteries/fuel etc.  I was hoping around £6K or so including a £3K mooring would do it with the rest on maintenance and fuel/heating.

DIY skills are non existent unfortunately.

Edited by thenortherner
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13 hours ago, thenortherner said:

Hi,

I'm currently considering selling my home and using the equity to buy a narrowboat outright to live on full time.  I rented and stayed on a boat for a week to try it out in November and really enjoyed it, so there's no worries there.  I know this is only a small snapshot of time and there's the novelty factor but deliberately chose the coldest, bleakest time to try it out.

I'm in my early 30s, in decent employment, no debts other than a mortgage and I don't have any children.  There's a good few reasons for wanting to make a change.  I live on a new build estate - whilst it serves its purpose in terms of being safe, secure and low maintenance, it's generally quite a dull, soulless place.  This is why boating appeals.  There appears to be a really decent sense of community.  My home's very small and minimalist - I'm not one for clutter - so I can't see there being too much of a problem with transitioning in terms of space.  

I'd like to permanently moor in Cheshire and already live very close to:

Midway Boats/Barbridge,

Audlem Overwater Marina

Swanley Bridge

Nantwich Venetian Marina

I know some don't offer residential moorings but I've read a fair bit about blind eyes turned etc..

Lastly, and I understand completely why it shouldn't be the prime reason for wanting a change, is it'd allow me to become and live 100% debt and mortgage free.  If I were to sell my property, once all the fees and charges are paid, I'd be left with around £50-55K to buy a boat outright.  By the looks of it, I could get something around 55ft in decent condition that'd be suitable to live aboard on.

I've been trying to weigh up the pro's and cons financially of doing this and have looked both short terms and long-term/10 years from now.  The running cost of the boat appear to be realistic from the research done.

In summary, it appears not to make financial sense to do this based on the below figures.

I'd calculated over 10 years because if I made overpayments in line with the amount shown during this time I'd own my home 10 years from now.

The below suggests that whilst I'd potentially save £58K over 10 years through living on a boat, it'd only be worth perhaps 38K in 10 years time, so I'd only have liquid/fixed assets worth £96K in 10 years assuming zero growth or return on the money I saved through doing this.

Whereas with the house, if it were to be worth £150K in 10 years - it's currently valued around £140K - then I'd have assets worth £55K more than going down the boat route.  And after 10 years, I'd own the house and then have an extra £750 a month as there'd be no mortgage/overpayment calculator.

What comes to mind re. the point above is that whilst I'd own the house I'd be asset rich and cash poor.  So what's the point?  I could maybe understand if the house could be sold to later downsize and then use what's leftover but it's not really possible to get a house too much smaller!  On the other hand, with the £750 a month saved, it'd take almost 6 years to save the £55K I'd have done by living on the boat - then I'd have the best of both worlds.

Apologies for the level of detail.  I've just tried to work things out in honest and realistic terms.  I'd be really keen on your thoughts and feedback on anything on the above, and what you'd do in my shoes and why...

Thanks,

 

f0sob4.jpg

 

Good grief 

My thoughts -

Im not a person who believes that our 3 scores & 10 are meant for just trundling along on our " expected " treadmill of work , work  & more work . Life is short & there are far more worthwhile things to be done . 

However a balance must be struck as work & the benefits of income are necessary . I spent my 20s & 30s travelling . I was addicted . Work was a means to an end & soon as i had enough savings i was back on a plane . The travel bug wore off in my late 30s & now in my mid 40s im worth bugger all . Regrets ..... im sad that the travel bug  wore off ! 

Now i have to work very hard to make up for all that time spent living well . 

My point is that whatever you do there will be a " price " to pay . Give up your home & you will feel the insecurity that can come from knowing youve abandoned your biggest financial asset . Keep your home & you 'll continue to wonder whether the grass is greener on the other side of the fence . 

There is no " one size fits all " correct answer . I believe  over calculating what the future will bring is futile . No one knows whats around the corner & lifes a punt . 

My gut reaction ( i trust my gut ...) is you keep your home at all costs . You do all the homework you need to do & do one of two things .

1) continue to live in it . Buy a boat . A small boat , a cheap boat . Not a doer upper but just a nice simple little boat . Get a mooring . Use the boat as much as poss . It could become your bolt hole away from the dreary estate . You ll look forwards to weekends & holiday time . Just BEING on a boat is enjoyable - the fire roaring , kettle on top or a nice stew , chillin out listening to music or with a book . Of course you could also go cruising at weekends or with holiday time & just enjoy the ups & downs of boat ownership . 

2) Buy a bigger boat , go full time liveaboard , ride the learning curve & say to yourself " ive done it , ive grabbed life by the knackers & gone for it .

If youve kept the house you cannot lose ! option 1 or option 2 = you win . 

If you sell up & it all goes wrong ..... then what ? 

So - life is to be lived yes . But balance is the key . Being hesitant , being diligent isnt being soft - its accepting that risk is present & attempting to mitigate unwanted circumstances . BUT not allowing this to dominate your life plans is essential if you are to " live " your life rather than " exist " . 

I think option 1 is best . If it works proceed to option 2 maybe 12 - 18 months later . You might find option 1 provides what your looking for ...... escape .

Above all dont sell your home mate as its not necessary to achieve what youre looking for 

cheers

 

Edited by chubby
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11 minutes ago, thenortherner said:

Thanks.

An online mooring with parking and facilities would be an ideal compromise and there appears to be some, but not many.

I'm loathed to lose the house so I'm looking at the alternatives I've posted.

In terms of running costs, where have I gone wrong?  I thought £1K a year for general repairs might be about right, and I've budgeted for the blacking/batteries/fuel etc.

Its hard to say re running costs but if you want to keep the boat in good condition it will be vastly more than 1k. Paint job at least every ten years alone will cost that. Batteries, blacking, replacing stuff that you have no idea about until you move aboard. The price of " specialist " boaty stuff the list is realy endless.

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10 minutes ago, thenortherner said:

Thanks.

An online mooring with parking and facilities would be an ideal compromise and there appears to be some, but not many.

I'm loathed to lose the house so I'm looking at the alternatives I've posted.

In terms of running costs, where have I gone wrong?  I thought £1K a year for general repairs might be about right on top of what I've budgeted for the blacking/batteries/fuel etc.  I was hoping around £6K or so including a £3K mooring would do it with the rest on maintenance and fuel/heating.

DIY skills are non existent unfortunately.

Full time liveaboard ccers all in cost us about 5k pa in 2010, mooring costs or food etc not included, allowing for inflation I guess 5.5k now?  

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At least the OP has been given plenty to ponder. I've got two concerns, firstly about having no DIY skills at all and secondly that this is a uniquely tricky time to make financial forecasts because of Brexit. Whichever side of the fence you are on that, we just don't know where the country's finances will be in five years time.

Oh and the OP is single... how does he know he's going to stay that way? A partner might have very different views about the joy of living aboard.

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Just now, nb Innisfree said:

Full time liveaboard ccers all in cost us about 5k pa in 2010, mooring costs or food etc not included, allowing for inflation I guess 5.5k now?  

Thanks.  A fair bit then, but I guess it's all relative to the size and condition of the boat, and some luck too.

I've had other liveaboards say I've over-estimated the running costs and I'd be pleasantly surprised.  So maybe I'd end up somewhere in between.

My costs didn't include food and sustenance etc, just enough to keep it floating and in half reasonable condition.  Breakdown is below.

2v2veix.jpg

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We're planning to sell the family home (similar value to your house, £150-odd thousand maybe) and move on to a boat (55ft, £45k) later in the year - BUT we will also be retaining a cheap flat (£66k) to provide us with a bit of rental income for now and a route back on to dry land/the housing ladder as and when we need it. I understand the appeal of being debt/mortgage free and I understand what others are saying about living for today etc. (brought home by serious health issues of my own this past year), but personally I wouldn't want to move on to a boat without the safety net of a (mortgage- and rent-free) route back on to dry land. I wouldn't want to reach the point at 70 years old, say, of having to rely on the state to house me. It sounds like you're in a financial position to take a similar approach with a bit of patience - in your shoes I'd be very tempted to pay off (most of?) that mortgage ASAP, sell the house and buy both a boat AND a cheap house or flat. Still plenty of sub-£100k properties to be had in the North, Wales etc.

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13 hours ago, thenortherner said:

f0sob4.jpg

I notice no-one has commented on this table and to me there are big problems in it.

The first year figures look reasonable, although there are some missing elements on the boat side, but the 10 year figues are just a multiple of the first year and take no account of inflation, and are therefore meaningess.

On the boat side:
Broadband is shown as nil, so how does the OP think he is going to get on the net? Sorry but there will be a charge and that will depend on the useage required.

Home Repair, nil? I don't think so, although I note he has put other maintence costs elsewhere, but they don't take into account breakages internally, and they do happen as we all know.

Some of the other prices seem a bit low from what has been reported here in the past, batteries, blacking etc.

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When you talk about remortgaging your house and getting somewhere to rent out, have you considered the issue of a BTL mortgage?  You will also have much higher property insurance and will also need things like landlord's gas certificate.

If you try and do it under the radar you could find yourself in deep trouble.  You need to talk to someone about your position as a BTL landlord when it comes to a mortgage.  You might not find it quite so easy to get.

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Just now, Graham Davis said:

I notice no-one has commented on this table and to me there are big problems in it.

The first year figures look reasonable, although there are some missing elements on the boat side, but the 10 year figues are just a multiple of the first year and take no account of inflation, and are therefore meaningess.

On the boat side:
Broadband is shown as nil, so how does the OP think he is going to get on the net? Sorry but there will be a charge and that will depend on the useage required.

Home Repair, nil? I don't think so, although I note he has put other maintence costs elsewhere, but they don't take into account breakages internally, and they do happen as we all know.

Some of the other prices seem a bit low from what has been reported here in the past, batteries, blacking etc.

The reason I didn't allow for inflation is that I'd hope my salary will go up in line with inflation to, compensating for the difference.

Some of the marinas I've looked at include broadband in the cost.  But at worst, I'll do what I did before I had broadband at home - tether my mobile to my laptop.  I'm not a heavy user anyhow.  Either way, it's not exactly a massive cost.

Home repair was a duplicate from where I was comparing a bricks and mortar home to a boat in terms of running cost.  See the posts above for the full table.  I'd estimated up to £600+ a year for stuff getting broken or needing replacing.

Batteries are around £120 each every 3-4 years and blacking is around £750 every 3 years, all from what I've read.  If they're 10-15% or so low it's not major.

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If a marina says it has broadband all that means is that it has a wifi network, but you will still have to pay an ISP, and if you are away from the marina you will still have to pay a fee to use a dongle. It may not be massive but it is a cost you have ignored in your figures.

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Just now, dor said:

When you talk about remortgaging your house and getting somewhere to rent out, have you considered the issue of a BTL mortgage?  You will also have much higher property insurance and will also need things like landlord's gas certificate.

If you try and do it under the radar you could find yourself in deep trouble.  You need to talk to someone about your position as a BTL landlord when it comes to a mortgage.  You might not find it quite so easy to get.

I definitely wouldn't want to do it on the sly.  I'd go down the fully-managed route with an agent, so would have no choice but to provide that sort of stuff.

House insurance would definitely increase - I had quotes for around £350, so not too much more than I pay now.

I'm going to email my broker and see what he reckons about my position.  I'm 14 months into a fixed 3 year deal and its my first mortgage and owned home.  I borrowed £114K and now I'm down to £82K 14 months on due to overpayments, with a chunk of this being redundancy money.

Just now, Graham Davis said:

If a marina says it has broadband all that means is that it has a wifi network, but you will still have to pay an ISP, and if you are away from the marina you will still have to pay a fee to use a dongle. It may not be massive but it is a cost you have ignored in your figures.

I'll go back to tethering my phone.  It's 25 gigs worth of data included and I'm not a heavy user.  It's not so much ignorance of a cost, just a way around paying it by using the phone.

I don't mind being a few hundred quid out on my estimates but it's the maintenance, fuel and repair costs where I want to make sure I'm not too far off the mark.

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Just now, chubby said:

Above all dont sell your home mate as its not necessary to achieve what youre looking for 

cheers

 

I reckon you're right.  And thanks for the detailed reply.

 

Just now, magictime said:

We're planning to sell the family home (similar value to your house, £150-odd thousand maybe) and move on to a boat (55ft, £45k) later in the year - BUT we will also be retaining a cheap flat (£66k) to provide us with a bit of rental income for now and a route back on to dry land/the housing ladder as and when we need it. I understand the appeal of being debt/mortgage free and I understand what others are saying about living for today etc. (brought home by serious health issues of my own this past year), but personally I wouldn't want to move on to a boat without the safety net of a (mortgage- and rent-free) route back on to dry land. I wouldn't want to reach the point at 70 years old, say, of having to rely on the state to house me. It sounds like you're in a financial position to take a similar approach with a bit of patience - in your shoes I'd be very tempted to pay off (most of?) that mortgage ASAP, sell the house and buy both a boat AND a cheap house or flat. Still plenty of sub-£100k properties to be had in the North, Wales etc.

That's what I'm leaning towards.  And if possible, rather than sell my home, finance it through the equity I have in it and then rent it, if that's possible.  It's in a very rentable area so I wouldn't be too concerned about that.  And it's a way of getting on land if it doesn't work out.  I'd sell off the boat and pay off a chunk of the mortgage with whatever I got for it.

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Long shot: Walk around the canals & talk to people. There are lots of boats that are hardly ever used. Make friends with the owners of some of them and end up using one for free (or for help in maintenance etc), for a year or two. Then work up to a wholely-owned boat of your own.

Sheer curiosity: What's your daytime job?

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Just now, system 4-50 said:

Long shot: Walk around the canals & talk to people. There are lots of boats that are hardly ever used. Make friends with the owners of some of them and end up using one for free (or for help in maintenance etc), for a year or two. Then work up to a wholely-owned boat of your own.

Sheer curiosity: What's your daytime job?

Thanks.

I work in warehousing/distribution management.

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58 minutes ago, thenortherner said:

That's what I'm leaning towards.  And if possible, rather than sell my home, finance it through the equity I have in it and then rent it, if that's possible.  It's in a very rentable area so I wouldn't be too concerned about that.  And it's a way of getting on land if it doesn't work out.  I'd sell off the boat and pay off a chunk of the mortgage with whatever I got for it.

Makes sense to me. There is the question of whether your lender would insist on moving you on to a more expensive Buy-to-Let mortgage, I guess. For what it's worth, in our own case we were able to borrow extra money against our own home and hence buy our rental property as 'cash buyers', which got round that issue.

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Just now, magictime said:

Makes sense to me. There is the question of whether your lender would insist on moving you on to a more expensive Buy-to-Let mortgage, I guess. For what it's worth, in our own case we were able to borrow extra money against our own home and hence buy our rental property as 'cash buyers', which got round that issue.

Just reading up on it now and it looks like a potential non-starter.

I'd have to convert the mortgage into a BTL, or LTB assuming that I wanted to use the money to fund a second property.

The problem is they all need a 25% deposit and no less.  In doing this I'd likely only have £30K after fees.  Nowhere near enough unfortunately.

Edit:  Ah I see what you mean.  In my case I'd have to borrow an extra £20K+ on top of converting the mortgage.  So in my case:

140K property value

25% deposit = £35K

= £105K mortgage

Borrow another 20K against the home

= £125K mortgage

Edited by thenortherner
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2 minutes ago, thenortherner said:

Just reading up on it now and it looks like a potential non-starter.

I'd have to convert the mortgage into a BTL, or LTB assuming that I wanted to use the money to fund a second property.

Only (I think?) if you wanted to let out your existing property rather than the new property you were buying. We just took out a Homeowner Loan on top of our mortgage and paid for the flat outright. (Still doesn't mean the option is right for you, of course.)

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6 hours ago, LadyG said:

I tend to agree with para 1, but OP has shown little interest in boating as such [I may be wrong]. Living as a cc while working is a diffcult lifestyle, and makes it diffcult to build a structured social life, in winter it is going to be dark and icy, in summer, who knows it might even be too hot! Living out on the cut, moving all the time, emptying casettes, finding water points, sounds pretty desperate.

I would suggest if he is working somewhere north of Nantwich if that is where he is looking for a mooring its very doable. He can cruise all the Weaver, Lots of the T&M, Middlewich branch, SU all the way to Ellesmere and even the Llangollen and still be in a reasonable car journey each day.

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Hi - just wanted to say that I've just put my bought and paid for flat on the market with a view to moving onto the local canals, hoping to get around 100k, looking to spend around 30-40k on a boat and spread the rest into diverse 'pretty safe' investments and continue with my self employed work, which doesn't bring much in, but I don't have/lead an expensive lifestyle, I mend and make do and am pretty resourceful.

The flat is in a really nice village, very picturesque, but I find myself bored and not feeling like I could ever settle there, and actually feeling trapped and scared when I consider that before long this may be forced upon me. After nursing a partner and recently my Dad through long illness and eventual death, I basically said 'Fxxk it, I'm doing this while I still can'.

Renting it out/buying a cheap boat isn't an option practically, and neither would I want to.

I'm knocking on 50, and the general response I've had to my plan online is "Nooooo!!!", from friends it's "Yes!!!!". Nobody is wrong, though it's mostly my friends who have the accurate picture of matters of the heart. Also, every other person on the internet seems to have a doomsday cult mentality on the direction this country is heading with regards to care, social security and everything else, and you are making yourself a blank canvas for them to paint their opinions on. They may have points, some things will come to pass, others not, but the negativity is much louder than anything else you'll get, weigh accordingly.

With few exceptions, it's a given that property isn't even on same spreadsheet as a boat as far as 'security' (investment, stability, er, security) goes, and though I've plenty of my own, you may as well well just put one cell with the words 'money pit' in it to represent a boat. Running costs may be comparable, but what you get at the other end isn't. 

It's a terrible idea, everything is more difficult, you'll be up shit creek (boom boom) in the future. You'll regret it if you do, and regret it if you don't.

You should definitely do it, and best of luck to you.

Andy

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I had a nice flat in Rugby town rented out for a few years as i was posted overseas by my company. The agent took a sizable chunk as well as the tax man. All was well for a while, i rented to two russian ladies for over 10 years with perfect relationship. However later I took on two consecutive tenants, one a young single male British teacher, the 2nd a young professional Pakistani, his wife and young boy. Both totally destroyed my property over 4 years by failing to open windows in winter and causing such terrific mould i had to totally redecorate twice in 4 years costing over £8000. I,d never had a damp problem in 25 years of ownership. I decided I no longer had an asset, i had a liability.  I sold up cheap at £100,000, bought my lovely 1998 60' Alchemy for £43,000 and banked the remainder as my nest egg. I,m livaboard for summer and overseas for winter.  Life is much less hassle now. Its one of my best decisions. Bricks n mortar, the great British con trick !

Edited by Irob
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1 hour ago, Irob said:

I had a nice flat in Rugby town rented out for a few years as i was posted overseas by my company. The agent took a sizable chunk as well as the tax man. All was well for a while, i rented to two russian ladies for over 10 years with perfect relationship. However later I took on two consecutive tenants, one a young single male British teacher, the 2nd a young professional Pakistani, his wife and young boy. Both totally destroyed my property over 4 years by failing to open windows in winter and causing such terrific mould i had to totally redecorate twice in 4 years costing over £8000. I,d never had a damp problem in 25 years of ownership. I decided I no longer had an asset, i had a liability.  I sold up cheap at £100,000, bought my lovely 1998 60' Alchemy for £43,000 and banked the remainder as my nest egg. I,m livaboard for summer and overseas for winter.  Life is much less hassle now. Its one of my best decisions. Bricks n mortar, the great British con trick !

You and I prefer the freedom and difference of living aboard and it certainly suites us. I am not phased by the future and not scared of my shadow. However we must remember that we are all conditioned in the UK that the ONLY thing to do unless you are a failure is to buy subsequent properties and remain on the " Property ladder!! " after all house are not for living in they are for profit!!. I don't however think property is a con as in all cases if you own property for over 20 years or so you will make a profit. Mum paid 200 pounds cash for her house in 1953 you can stick another three zeros on to it at least now. My first house in about 82 was 8450 and now for sale again at 100k etc etc so if your life is a spreadsheet then it has to be property but if you live your one life with other considerations then property is deffo not the only way.

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