Would you like to spend your retirement, or even a very early retirement, traveling around the world on a cruise ship, while earning money in the meantime? I’m not suggesting becoming an employee, rather a long term, highly valued guest . There seems a spot where you can find arbitrage within renting out your accommodation via AirBnB, leverage Uber to earn more, and reduce your overall costs by playing the travel hacking credit card game. Throw in a bit of internet based earning, and you are all set.
The notion of spending traditional retirement living on a cruise ship as an alternative to a retirement home has been brought up in the past, but the articles examining it were sometimes a little clumsy. These guys got the idea of the positives of cruise ship living: serviced accommodation, food, entertainment, medical care all onsite. Plus, perhaps more critically a support group of people close to hand to watch over you, keeping the brain ticking over with human interaction. They simply failed on the math of pricing out this option, by looking at full fare prices for data points, and not considering additional income streams to offset living expenses. In fairness, more options have since emerged on the income front in recent years.
How cheap is cruising?
When people first thought of this notion, they were pricing cruises at rack rates. Would the math work out at $599 for a 7 day cruise? How about $499? The thing with cruise pricing is that it is a little complex – the number you are quoted is based on double occupancy,and then they add on taxes and fees. These are mysterious things, but you could easily look at $100-150 for port fees/charges and taxes on top of the fare.
You can actually find cruise fares that are listed at around $30 per diem. Add on the fees and double occupancy, and a realistic price would hover around $100 per day per couple. One major expense would be gratuities, which range around $12 per person per day.
If you consider that price gets you not only your room, but also unlimited meals, free entertainment, and great travel, that’s a pretty good deal for around $1,500 per person per month. The cruises here from Princess at 90% off look like great value!
What about the other side of the balance sheet?
Offloading that expense can come in many ways, if you are traditionally retired, you might have access to Pensions, IRAs, a 401(k) and social security. As an aside, people really should look into the cost/benefits of deferring social security payments until 70 to maximize payments. Additionally, those of traditional retirement age, or the early retired, could leverage their existing assets to create income.
- For those who own a home, AirBnB would be a way to monetize that property. Pricenomics has data showing that the average price per night for renting your property via AirBnB can be has high as $185 in Boston, to as low as $75 in Albuquerque, NM. As such, if you were to rent out your property via this service, you could completely offset the cost of living on the cruise-ship, or at least reduce some of the costs of doing so. If you added on a cleaning service, this could be a fully automated rental income property for you.
- Uber is another option to increase income. If you wanted to work for a day in port, you could ferry passengers around to bring in some income. Just park your car at one of the cheaper carparks, available from $6 per day, get up early on the last day of the cruise to pick up your car, and start shuttling disembarking passengers to the nearby airport. Port of Miami to MIA comes in at about $17-22 per trip, and if you could book return passengers you could generate $60-$100 per hour.
- Online income. The tech savvy could generate income from the internet. If you were effectively living on a cruise ship you could generate a ton of content, and quickly become the specialist in your space. You wouldn’t make a lot of ad sales initially, but you could monetize by advertising your car shuttle service on the site, and pre-book trips to the airport for disembarking passengers, and also could offer tours of the ports, since you would quickly become an expert. You could mimic whatever the Shorex was offering onboard the vessel, and undercut their pricing by 50% and still make a massive profit.
Let’s not forget about credit cards to reduce costs either. A great card would be the Barclay Arrival+ which could be used on any of the cruise lines. At 2.2% it offers better value than any of the co-branded cruise credit cards. Or you could go the 5x route, and pick up a card that offers 5% cash back in Gas, Grocerys or Drugstores, and while one person is shuttling people around town, you could be off earning your keep… one good home port day could earn $400-500 with ease.
I’d also suggest looking into some hotel based cards, so if you got to a situation where you couldn’t walk off one cruise and onto the next, you could cash in some points to cover the night. As you can see, big ports like Miami have plenty of hotel options. Depending on where you are based, chains like Best Western, Choice and low tier Hilton, Hyatt, and SPG properties could all offer a lot of value for your points.
If you were to opt for a life at sea, and you decided to book absolutely the cheapest fare each time, on any ship available, the cruise line would reward that loyalty…yeah most frequent flyer loyalty programs are somewhat dumb like that. But not to worry.. top tier perks can range from cocktail receptions to dinner with wine at specialty restaurants – which are certainly nice little perks when you are getting them weekly! You’d also finally get to pay for your rent with a credit card that earn miles..
I think there is an interesting arbitrage opportunity here, and it could make a lot of sense, especially for a couple who owned a home, but didn’t have a large amount of savings. This could reduce monthly outflows, while being a lot of fun too. Cruise rates at 90% off vary by season, so you would have to chase the rate, right now it is the Bahamas, but at other times of the year you can find similar discounts to other areas, including a lot of deals in Alaska.
This idea has been brewing for sometime. I actually worked on cruise ships for a while (highly recommended for college age kids) and while they covered my room and board, I did wonder about creating cash flow generating assets to offset the cost of the cabin.. doing so means you wouldn’t have to work those long hours, and instead could lord it up. At these prices, it is surprisingly affordable to do, and I think many people could create enough income to support living on a cruise ship year round. The advantage of taking the AirBnb approach means that if full time was too much, you could pick and chosoe, and simply book out your home one week a month, and pop off on a cruise while making a profit…