Financial Planning for Seafarers
Last updated on March 10th, 2023 at 10:54 am
The Merchant Navy offers a lucrative salary. It is one of the popular reasons for aspirants to join the vessel. But money alone cannot guarantee financial stability in life. It comes with the right knowledge and a solid approach. This is why Financial Planning for seafarers plays an important role in their career as it brings a sense of security for a prosperous future making sailing a fun profession.
Managing finances becomes necessary for retirement planning. At 50yrs of age, a seafarer should be aiming to work at his/her own leisure and not due to poor financial conditions. Abraham Lincoln rightly said, “You cannot escape the responsibility of tomorrow by evading it today.”
But what is the need for financial planning for seafarers at all? There are some rational reasons that require professionals in the merchant navy to keep in mind while making financial decisions. The reasons are as follows:
1. Savings Matter in Merchant Navy
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains forethought, and so broadens the mind.” – T.T. Munger
Seafarers often get trapped in the loop of earning and spending. They tend to earn huge bucks when on the ship but also spend those on silly desires such as expensive gifts for family, buying imported cars, or investing in costly properties too soon in their career. This practice can push seafarers on the edge of financial crises in the future. Financial Planning for seafarers starts with the understanding that one should always spend what is left after saving.
2. Let Your Money Work for you
We have seen Captains/Chief Engineers working hard for months on ships at the age of 60. A time when they should rest and enjoy the peaceful setup of home and the company of close relatives. So, what went wrong? Poor financial management during the early days of their career by ignoring the basics of planning often leads to a seafarer working for money during their retirement. It is a well-known fact that, when prosperity comes, do not use all of it. Financial Planning for seafarers comprises learning the art of how to make your money work for you, when you can’t in old age, as early as possible by
3. Underprivileged Professionals
Seafarers are largely a group of disadvantaged people who are not able to stay up-to-date with ongoing trends or information of any kind. Lack of resources in the middle of the ocean poses a struggle to maintain social circles apart from the deck group. After returning home for a brief period, we are engaged with our exams and assignments to get a promotion. This leaves us with little to no time to understand complex investment funds or form detailed analyses of our finances – making us good at making bad investments.
4. Inconsistent Income in Merchant Navy
We accept that the merchant navy comes with a lot of pros in the form of income. Seafarers receive a tax-free salary that is mathematically 35% more than any average earning professional. But the income is inconsistent depending on the nature of the contract a seafarer is bound by. Hence, it gets problematic at times to continue with the recurring investment deals which can empty our savings basket.
A career in Merchant Navy is a unique blend of experiences that become an important part of life. It makes a seafarer stronger, and more patient with traits of adaptability. But it comes with risk hence, it becomes very important for a seafarer to perform an in-depth study before making any investment. Money is an asset that can build or break your social standing. Thus, a Seafarer should invest in learning the skill of financial management from their first paycheck.