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What is the margin on a new build production yacht?

Discussion in 'General Yachting Discussion' started by ombreetsoleil, Feb 17, 2013.

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  1. Capt J

    Capt J Senior Member

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    I work for a lot of very large and midsized company owners over the years. Mostly Fortune 500 people. They are all good people and I would say that most all of these large business owners have been extremely good to me and their company employees.

    But what they want out of their investments is no different than what you or I want out of our investments. If they're going to take a risk with their money and put forth the time, energy, and effort to make a maybe produce money for them. They're going to want to get paid for the risk, their time, and effort. Basically, they (as do you and I) want to make double the return on their money, than if they left it in secure investments and had no worries and no risk. Why risk their money if the payout is less than what their investments are paying that they don't have to worry about.

    I'm the same way. I own a few investment properties. I have done very well in the stock market since 2008, around a 28% return annually. But I want to diversify also. If I look at a rental property and figure 10 months income (figuring 1 month vacancy, and 1 months rent for large long term repairs) - 12 months expenses, and it's not paying a minimum of 12% a year, I'm not interested. I'm not looking to invest my money in a hassle, for free, when I make great money working and that occassionally takes away from my time working. Whereas the stock market takes a minute or two a day for me to check it on my phone or computer. I don't have to worry about being sued by a tenant, a pipe bursting, an a/c blowing up, or a catastrophe and my liability is limited solely to my cash investment. It's just on a bigger scale. But if they cannot make that formula work in US, they're not going to bother and neither am I. But, if I do buy that property, I pay my painter exactly what his bill is for painting the walls, the a/c guy the same, the contracter the same, and many times I throw them an extra 10-20% if I feel they've done a good job. I don't ever try to argue about price with a subcontractor unless I feel it's way to high, but I've been dealing the with same people for a decade and they treat me right. But if the costs up front to purchase and own the property are too high, I DON'T BUY IT and everyone loses because the bank owning the foreclosure or short sale isn't paying anything or anyone to maintain or fix anything on the property.

    Government regulations are the biggest factor in why companies are choosing other countries. Between all of the red tape with the EPA, the Health Care law that nobody is exactly sure what they have to pay on it and exactly what it entails, to cities, and zoning, and permits, and all of the myriad of agencies you have to deal with just to open a business. You're wasting 6 months before you can even try to open the doors and that's if you're not building a building. The unions are also pricing themselves out of many jobs.....Look at Hostess for example...Look at Mercury and their union pay and demands in WI, it's no wonder they produce a lot of stuff in Mexico....I was told that under the last ownership of Neptunus that the cheapeast Worker/Union guy was making $63 an hour when you factored in all of the benefits and that was to sweep floors........no wonder why they couldn't turn a profit........A company can only pay what they can afford to pay so much and still be profitable and still be competitive.
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