That works until the economy goes into recession, the used boat market tanks, the stock market tanks, and the company you work for goes out of business. None of it's your fault other than the debt to sellable equity ratio.
Ted
I generally agree that ending up in a weak position due to changes in market value and liquidity (time required or expected to convert an asset to cash) is a risk worth considering.
But do we really know how much volatility there is in boat values or time required to liquidate over time?
For example, on a mainstream model such as a Mainship 390 or some such that has been around a long time, if we plotted annual market value for an average example over 20 years to include all parts of economic cycle, is it really that erratic?
I clearly do not know the answer to this, but I suspect it is not highly volatile. In general, luxury is the least sensitive category to economic cycles.
Now, if you have a one off, or a crappy example of a mainstream boat then you are likely at more risk to economic cycles. The bottom end of quality will be more sensitive for sure.
I am old school. I pay cash for toys. I am likely to enjoy my boats less if I am writing checks against it every month. I also pay my moorage annually.
But I recognize that on a purely financial basis this can be a poor decision in some cases. Then there is a whole other level of analysis when it comes to life expectancy and the 'go now' question.
As with most things, it depends.
As someone else suggested, it is probably a more important question to understand that if you are borrowing money to buy the boat, have you reserved enough cash to maintain it in all regards like insurance, moorage, maintenance and repairs? In aggregate, these will add up to significantly more than the mortgage payment.