When is it okay to pop a boat on a house?

Never!

A boat: A wedge-shaped fibreglass hole in the water large enough to absorb all your disposable income.

If the weather’s right, if you have time, and if it doesn’t need maintenance and repair, you’ll have a great day on the water every time!

Now do I endorse borrowing to put anything on the house that is not an asset? Absolutely not. It makes no financial sense whatsoever, to borrow against an appreciating asset to purchase a depreciating liability. But hang on – I’ve done this, so full disclosure here – I’m a total hypocrite! Here’s why in some cases, it may make some degree of financial sense for you to do it also.

Let’s say you purchase a boat for $50k. It’s 6 metres long so the whole family can go out on it, most likely 3-4 times a year if you’re lucky. Let’s say you sell it 5 years later for $30k – you’ve spent $20k on depreciation over 5 years.

Let’s say now that you borrowed all of it – $50k has been added to your mortgage, and you aim to get it down to $30k at the end of year 5. The eventual boat sale will clear the balance and on the way, it’s going to cost you about $165pw depending on the interest rate.

Here’s the thing, if you can afford $165pw for 5 years, and if your home is increasing at a rate which is faster than this, then why the hell not?

Are you really going to make all your decisions based on whether or not it makes sense financially to do something – no you’re not, so let’s not pretend here that I do either!  I know in reality you’ll do whatever you want, so don’t feel so bad about when you actually do it. In reality, if you’re like me, you only have around 5-10 years where your kids still want to hang out with you anyway, and this is a great way to make every moment count right? Add to that the fact you live in NZ – is this not the best place in the world to have a boat!? Yehaa it is!

Life’s way too short to leave the living part of the equation for when you’re old and achy. If you can absorb the funding costs and you own a home that’s increasing in value, have a think about buying a boat – go on do it!

So yeah, usual disclaimer here – this is dodgy as advice and don’t do anything that I’ve talked about here. For any serious financial decision you make, please contact your serious and sole-less financial adviser.

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