RV Depreciation

As usual, this blog post turns out to be a long one. If you’re just interested in quick RV depreciation opinions then scroll down to the text in red.

Karen and I decided to make a run to Grain Valley Missouri which for us is only a 45-minute drive. The town is home to three RV dealerships.  It was also the first time in a week Karen could get out of the house for an extended time. She had cataract surgery and received a new lens. She has had very bad eyesight her entire life. Those days are over. It was wonderful watching her excitement as we drove through the rolling hills which are in full bloom with green trees she can see at a distance.  Karen took a book to read for the drive as she normally does. She never opened it. The best part of the trip for me, now that I think about it, was watching Karen’s excitement. She gets the next eye fixed in a week.  Glad we have the time and money before taking off in 2019 to see the rest of the country together. Money well spent!

Speaking of money well spent what about depreciation on an RV purchase? I recall a conversation I had with a person when I was 18 years old regarding the need to purchasing a new television. Back then the selection of televisions was not as complicated compared to today’s models in varying sizes, resolutions and technical capabilities. Although I still don’t know what they mean by a “smart TV” because the darn things still require someone smarter than me to figure out how to set them up and use them. When I was 18 I hated spending money on something that might have to be replaced and still do. Because spending it reduces your net worth, a concept I had way back then. Perhaps the attitude came from learning the value of a dollar as a child, especially when you don’t have a lot of those dollars. The value of a dollar was further ingrained in my personality perhaps because I was a business major in college.  I spent some time in the corporate world, earning an income above our monthly needs. I kept the attitude to live below my means. I moved into public service as a law enforcement officer and the hourly pay became once again barely enough to save for a future. So, I found myself once again comparing expenditures as reducing my net worth, like I was 18 again. I compare the costs of large purchases against the hard-earned hourly rate for my time at work.

I’m sure these attitudes about the costs of things are shared with each one of you, regardless of income or life experiences. There is much evidence of this. The cost of living full time in an RV is front and center in much of what I read in your blogs, forums and articles.  It’s evident the ability to finance a retirement through savings and pensions may well be among reasons most of us do not retire a lot earlier. Especially for those of us who are in a hurry to move on to retirement, having already lived two thirds of our life expectancy.

I’ve not found the depreciation costs of an RV listed in other’s posted budgets.  It’s not in my estimated monthly budget either and will never be. It is however listed in my long-term financial plan. I know what our budget is for the RV and the truck purchases. I know my net worth and what it should look like if we stay on the road for six years beginning in October of 2019. I have an educated guess at what the value of the RV and truck might be worth when and if we sell it and move back to a stick built home. All the planning might not work out but I do have a couple plan Bs to cover possible changes. Although I can’t control most of what would affect Karen and me in the event of a financial catastrophe. Short of staying on the job until I’m much older, retiring and dying in what could be a short time later. I’m not willing to do that. Neither is Karen.

As part of long-term planning I researched what others had already figured out for RV depreciation schedules. I hope you would agree the variables for what might affect depreciation are considerable. What someone paid for the RV to start with and what the economy might be at the time of sale are a couple big variables. Especially if they overpaid for the RV or sell it when the rest of the baby-boomers finally sell theirs, saturating the market.

Speaking of the baby-boomer generation who will eventually sell their RV’s, assuming they don’t kept them until they have zero value. It’s a little off topic but should be a concern for anyone who might want to buy a used RV or attempt to sell one in the future. I did a study back in the mid 1990’s as part of preparing for a presentation. I was assigned to work in the crime prevention unit at the time. I have a passion for protecting the elderly which developed after a terrible event involving an elderly person. I wrote a research paper trying to win a federal grant to fund a crime prevention program. Working with a local Rockhurst University professor, part of the grant had to do with estimating the average age of persons in my jurisdiction in various future years. What I discovered was that here in Missouri, the percentage of persons turning 60 years of age, as a percentage of the population, would change significantly in 2010 and peek in 2020.  This was based on census data. If I recall the figures correctly, our state would be moving from an annual rate of .7 percent of our population turning 60 years of age to 1.7% beginning in 2010.  It was a significant shift in our demographics. Birth rates might have changed some of those figures, regardless you can see the point.  It’s effecting RV purchases now with record sales of new RVs and may cause a future record for used units on the market. Hmm, this might even present an opportunity for those that have the time to find the right used unit.

You know I can’t stop from writing a desertion about anything RV related. I started just wanting to write out what I’ve researched regarding a simple RV depreciation schedule. Sorry, can’t do that. I write like I think and to this point I believe the above information must be considered when estimating what our rigs will be worth in the future. And more importantly how do any of us justify spending hard earned money on any large purchase that does nothing but depreciate? You already know the answer to that question but I’ll still give you my opinion in a few moments.

If you scrolled down for quick information on RV depreciation then start reading here.

In my own financial planning, I’m figuring a new  high-profile luxury fifth wheel RV will depreciate 54% in 6 years.  I’m using 50% for the depreciation on a new one-ton diesel truck over a six-year period. Right now, my total budget is $84,655 for the trailer and $66,700 for the truck to include taxes and some of the items needed to equip the RV and truck. Although I suspect we will purchase some of the RV/camping equipment with current income rather than out of savings as we plan to purchase our rig up to a year before retirement. I’ve got just over eight weeks of vacation to use in 2019!  I have already decided it is most likely we will buy a one year old truck with well under 20,000 miles on it and save an estimated 22.24% compared to a new truck.

I found an interesting article written at Camper Reports.com. The writer’s conclusion is on average a new RV loses 21% of its value when it leaves the lot. The best value is found in buying a used five-year-old RV based on his depreciation schedule research. He believes there is “no significant difference from year one since model years are announced a year in advance–helping resale of a two-year-old trailer which seems to be only one year old to a potential buyer.” You can check the trailer label for the date of manufacture. The author’s research goes on to estimate depression off the purchased price on fifth wheels at 25% by year three, 29% by year four, 37% by year five and 38% by year six. Depreciation begins to level off at year five. So, if I’m reading his article correctly, total depreciation by year six off the manufacturer’s suggested retail price is 59%. That assumes you lose 21% when you drive it off the lot and another 38% by year six.

I can’t find the link but have it in my notes the writer at RV Research.com estimated the depreciated in general for RV’s at 50% by year five. This guy at Axleaddict.com has done a lot of research on motorhome depreciation where he compared two specific units. His research estimates total average depreciation at 58.9% through year five.

It’s okay to stop reading if you were just after a few opinions on depreciation schedules.

There may be other cost considerations as part of this. Such as inflation rates and what one loses in interest by not keeping the money in the stock market (or whatever) rather than spending it.  The “old me” might have considered that! I’m planning not to think so much about the money details someday which will be the “new me”.

For my planning, the estimated depreciation only tells me what I might be able to sell everything for and then use the money to buy a home or whatever should we ever come off the road. OR elect to buy another RV and continue on.  The old me sees the depreciation in our budget as something costing on average around $7,618 a year or $634 a month. Add the truck and the monthly expense becomes $1,097 given our budgeted purchase prices over a six-year period. I know some of you are going to figure it up on your own – it comes out to $78,984 for six years.  At 7% earnings that money would generate $33,178 if invested rather than spent. Sorry – the old me chimed in at the last moment.

So how does one justify the expense of it all. The old me says; the hotel rooms for a year could cost over $27,000 or maybe $162,000 in six years, the food would be expensive if not cooked at home and you have to own a car anyway.  The new me says; what price does one place on looking out over a view that photos can’t capture, what price do you place on spending time with family and friends, what have you been saving for, is it really that important to work until death and I hope we can do this before the North Koreans figure out how to launch a long-range missile. If you want more opinions on if the depreciation is worth it, go to this 22 page forum thread.

Karen, with her new eyes, and I are going on an adventure. I’m not giving a second look at depreciation because it does not matter short of how much will we have left for our next adventure.

Aunt Tancy

Let me begin this blog post with a small amount of RV related material.  The remainder is dedicated to my family but might be interesting to you as well.

rv-comparison-book
I purchased the 2017 JR Consumer RV review eBooks on Thanksgiving Day because they were priced half off. I’d hoped their section on RV construction would be good because it’s hard to find one consolidated source of information covering construction. For the most part the construction section was okay. They also had some information about the 2017 trailer models. It might have been better to wait until the end of the year, about October, to purchase their guide for more reviews of 2017 models. If someone was not willing to do about a year of research these books would be of greater value.  I do think they are a good purchase at the discounted price even for those that have already done much research.  It’s a good way to compare your findings against their ratings and confirm other conclusions.  Now on to some family stuff….

Continue reading

Time is Flying By

A few evenings ago Karen and I were standing in the front yard enjoying the cooler weather as night approached. We discussed our future noting there are so many experiences we are looking forward to. It seems like time is flying by the older we get.

Recently I was asked how long I had known a particular person. Lately, I’m usually off by at least half when estimating time. If I thought someone had been in a position at work for six months it turns out to actually have been a year.

So why does time seem to go so fast? And why am I having trouble recalling how long ago something happened? No, there are no medical conditions. At least that anyone has pointed out to me. Perhaps it has something to do with how emotional, or memorable, the experience was in the first place. Perhaps if the memories that we recall are longer in duration it influences if we are able to recall how long ago it happened?

I’ll put this out there for everyone to think about. Perhaps when we are young and experiencing events for the first time we record more details in our memory banks. Because what is happening is more interesting. I recall the first time I went hunting like it was yesterday but know that was more than 40 years ago. I even recall the weather on that day.

This gets me to wondering if the first time we look out over the Grand Canyon or see the stars during a clear Alaskan night will create vivid and long lasting memories. I wonder if traveling and experiencing things for the first time will bring back those same youthful emotions?

September 2014 was when Karen and I first started talking about what we would do in retirement. I can’t believe how time is flying by.

  

new flash  Newsflash – Workcamper.com news is now free 

deputy-sheriff-badgeR.I.P Deputy Brandon CollinsEnd of watch 9/11/16
And all those who died on 9/11.

Meet with Part Timers

What a wonderful day we had at Longview Lake Campground in Lee’s Summit Missouri, a Kansas City suburb.  We met with part timers Cheri and Dean who take longer trips from their home in southern Kansas. They are on their way north through Wisconsin and eventually to New York State. Cheri’s blog is Travels with Bentley. In minutes Karen and I felt like we were their neighbors. We really appreciated their hospitality. Karen says she learned a lot about the lifestyle from Cheri. Her and Dean walked us around their 36’ Heartland Big Horn fifth wheel, pointing out modifications and what they take on trips. An added bonus was having a look around the county park where they camped. The park is among a list of sites we might consider for long-term stays when back in town.

 

WP_20160712_012

Cheri and Dean

 

 

They are members of several groups to include Escapees, the Heartland Owners Group and Rvillage.com. We appreciated them sharing their experience and the reasons they selected everything from why they joined these clubs to the pots and pans Cheri was pulling out of cabinets to show Karen.  I could tell Dean spends time thinking through solutions such as how to mount his portable satellite dish on the ladder to the roof or front of the hitch pin.  A surprising topic we covered with Cheri and Dean included what it was like for them in the few months or years prior to their retirement. I wanted to know about the emotions of it all and frankly, to have yet another say the next few years before my own retirement will pass quickly.

I took a few photos at their trailer.

 

WP_20160712_002 (800x391) (640x313)

Towel Rack in Shower for Drying

WP_20160712_004 (800x427) (640x342)

Temporary Spot for Portable Satellite Receiver

 

WP_20160712_003 (800x435) (640x348)

Handles on Leveling Jack Pads

 

WP_20160712_001 (800x442) (276x347)

We watch for campgrounds that may offer workamping for longer stays. We also learned another local county park in Smithville pays $10 an hour plus a site!

 

 

Over the past year Karen and I have been meeting with others who are traveling. So far we met with another local couple who are workcamping across the country, a solo traveler working between state and local parks, Cheri and Dean traveling part time and another couple traveling in their motorhome.  We have contacted full timers on forums, blog sites and bumped into them at RV shows or while on the road ourselves. We are hoping this is giving us a fairly complete picture of what to expect when we make the jump to our future RV.  One thing rings true about all these fine people is they have always been helpful and Karen and I can tell we are of like mind.

Lastly, I’m working to gather content for an eventual blog post regarding transitioning from a stick and brick home to life as a full time traveler. The logistics of it all can be intense. For example and although we have yet to decide, Karen and I have talked about buying our truck and rig a year early rather than at retirement.  Any suggestions you are willing to add to the conversation will be appreciated.

Visit with Family at the Local State Park

My sister rented a family lot at our local state park, Watkin’s Mill. I had reported about this park in a prior blog post. Several of us got together to enjoy the holiday. By the time we arrived Mary had already made friends with one of the camp hosts who came by when his shift ended on both Saturday and Sunday. The host, Tim, is a solo volunteer and I had a chance to pick his brain.

Although Karen and I elected not to camp in our tent with the group, we did spend some time around the campfire. The park is just five miles from our home. We dropped by for visits rather than braving the downpour of rain over the weekend. In usual fashion Mary, and her friend Russ, had setup camp with the best amenities available for tent camping. I wish the entire family could have been there. Years ago our father, his parents and the immediate family used to hold events where everyone camped out and enjoyed meals together. Our family camping trips still occupy my best memories.

I took a few photos with my cell phone at Watkin’s Mill:

WP_20160702_010 (800x450)

View of Park

WP_20160702_003 (800x450)

Mary uses this shower tent as a portable outhouse. And no, the wagon is not part of the outhouse operation.

 

WP_20160702_009 (800x449)

Well spaced lots with trees

WP_20160702_005 (800x418)

Cardboard for wet ground – Maybe buy some plastic stepping stones?

WP_20160702_002 (800x410)

Two room tent – nice

WP_20160702_001 (800x396)

The blue shelter is for cooking, the other is for eating

 

Tim, the camp host, has been on the road full time over six years. His mostly trouble free Dodge dually truck has over 250,000 miles on it and he says he has had little problems out of his 13-year-old Carriage Cameo fifth wheel. He was disabled in an auto accident. Sold his insurance business and hit the road. He volunteers exclusively at state and national parks, volunteering for his camping spot. He does not plan to come back to Watkin’s Mill because the park requires 40 hours of work in exchange for the lot. As a solo camper he works all 40 hours while couples split the time with 20 hours each. He commented the park is wonderful however. Several other workcampers are first timers and Tim has been trying to explain to management their 40 hour requirement is a bit excessive. We drove around as he pointed out a few spots they are able to get 40’ rigs into. We talked about his typical work day and general experience traveling around the country. He says once you work within an individual state park system, or the federal system, it’s not that hard to call around and find a job. Tim usually plans three months or more out when booking his next work assignment. Believe he is heading to Arkansas to work near Hot Springs which is an area he has been wanting to see. Tim says he lives on his disability payment only and plans to come off the road whenever his trailer or truck gives out. He is from New York, has a talent at finding four leaf clovers and found one for Mary.

The volunteers parked next to Tim had a newer Heartland Big Horn. Wish I would have had the opportunity to tour it. BUT, that opportunity has presented itself in another way. Next week Karen and I are getting together with Cheri and Dean of the Travels with Bentley blog. They are part timers and are heading through Kansas City on their way north. They travel in a Big Horn. So we will get a chance to learn how part timers travel, tour the Big Horn while making new friends.

On a more personal note, sitting around the campfire, looking at folks parked in their trailer amongst the trees caused me to reflect a bit on my own life.  Karen knows I spend a lot of time “dwelling” on going full time. For me, planning and checking things off the list in preparation for retirement is making it easier to cope with daily life and helps curtail my desire to hang it all up now and just leave.  Some execute their transition to full time on the road in a matter of months. We are taking five years to do it, with nearly two years already done. These “baby steps” towards the end goal really are making it easier to accept the negative parts of daily commitments. I thought to myself at the campfire how nice it was to be with others who for at least a moment, forgot about it all and enjoyed life.

So planning for retirement has also been a way for me to not have a “short timers” attitude at work. I love my job, for the most part. Suppose I’m nearing the top of my profession in experience and have really achieved all the goals I set out to obtain. I’m ready to move on which is something my father told me would happen when it’s time.  It’s amusing when I have to enter someone’s driver’s license expiration date on a report I think about if I’ll be retired or not by the next time they have to renew their license. I sit around at work and listen to dedicated coworkers talking about the job and what happened that day. I sure will miss them when the time comes. Karen and I started off with an eight-year plan, then figured out how to reduce it to five years.  Just three to go. Believe I’ll make it a point to spend a little more time enjoying life every day – like I’m sitting around a campfire.

 

new flash News Flash …..  Thor Industries has purchased the once family owned Jayco. I’ve also read Dutchman, a division of Keystone (Thor) bought the Lifestyles Luxury RV plant but not the brand. And Augusta RV is building a 34’ Ambition. A couple on the forums is picking up their 34’ in October.

Ordered a Dumpster and Sold the Boat

IMG_2667 (1024x667) (800x521)

Parked beside a shed for more than 13 years has been our aluminum fishing boat. The last time the motor had been ran was eight years ago.  If I’d known it would be so easy to sell I would have done it years ago.  After spending a day cleaning it up I posted the boat on Craig’s List and had five emails by the next morning. Sold it to the first person who showed up with cash. The interior of the boat needed refurbishing, new tires and some work on the trailer. Priced it less than what I would have paid for it if I had planned to fix it up.

Dumpster (800x450)
A friend who is a home builder ordered us a dumpster at his discounted rate. We were also able to order a size larger at no extra cost.  Karen and I are going to walk through the house selecting items to dispose of that would not fit in our normal weekly trash container.  We agreed to select items together using the following rules for disposal: If we have not used it in four years, can’t give it away, can’t sell it or we are not going to use it in the next three years, then it goes in the dumpster. We also have two old sheds that are coming down so those are going in the dumpster.

If you are feeling like you stalled out with your downsizing efforts – order a dumpster and pitch some big items. It really is liberating.  I’m sure we will order another just after retirement. For now, the extra space in the house will be more usable while we still live here.

One of the sheds has already been torn down. The floor was built using treated lumber. We are planning to turn the floor into a deck which is attached to a remaining shed and in the shade of our woods.  Going to be a great new gardening area. (Update, we decided to pitch the rest of the shed floor rather than buying more lumber to finish a deck we would never use.)

Yet another advantage of starting so early in planning for retirement to an RV.

Getting Healthy and Cutting Expenses

I ended the last blog post writing I would report back as to what we are doing to; improve our physical, mental and spiritual health, cutting reoccurring monthly expenses and some big decisions such as do we move to having just one family car.

Karen spends a lot of time walking the dogs. Although I enjoy the dogs and being with Karen, walking the same route gets old to me.  As a younger police officer I was a member of the bicycle squad where I’d often ride 30 miles a day.  There is a perfectly good Cannondale  mountain bike in our back yard storage shed. Suppose it is about time to dust the bike off. When I rode a lot I preferred the Cannondale or Trek brands for a number of reasons, but that’s another topic. Seems like having a fun hobby that provides some exercise is something one can stick with.

I tried to stop chewing tobacco (gross I know) at the same time loosing 18 pounds.  A lady at work gave hypnotism a try and stopped smoking cold turkey.  If anyone else has had luck with that let us know.  Lost some weight and then gained some back. I’m convinced counting calories is the best way to go. Sparkpeople is a free website that helped.

Band 2

Bought a Microsoft Band 2 the other day. It’s a big improvement from the first version, Band 1. Among other things, this fitness tracker/smart watch will count calorie burn, record sleep habits, and links up with a smart phone to provide detailed exercise routines. The Band 2 is a good value when compared to similar products. I can link their health application with Myfitnesspal and eventually, Lose It, where you can record what food you eat. The built-in GPS will record your route during runs or bike rides. A guy at work showed me several marathon routes he has run in the past. His GPS recorded the run and he was able to show me it on a map. He sure ran through some fantastic scenery.

I also had a full physical this rear, I mean year, to include all the extra testing after age 50. Doctor says to eat more fiber and to follow a Mediterranean diet. Those chalk like fiber tablets upset my stomach. A guy at work told me about gummy bear like fiber, for lack of a better description I’ll call it candy. Works awesome. Think I’ll count calories and just loose some weight rather than do the Mediterranean thing. Of course eating better in general will help.

Spiritual health to me has to do with getting closer to God. Among other things I ask God for help dealing with the sometimes destructive side of my type A personality. Seems like I’m most impatient when unplanned events affects time. Because of deadlines or having little time to get things done, I can get frustrated. Working so much during the week leaves little time to accomplish things at home. Retirement might fix that, but for now I’m working to better balance things out. Some things may never get done or perhaps never needed to be on the list to start with. I now avoid putting things on the calendar which require a routine or recurring event. For example, I’m not interested in doing anything every Monday night at 7:00 pm – for the rest of my life!  Even annual events are now a target to avoid. That’s not to say I walk away from responsibility. Guess at my age what I think is a priority is more important to me than what others think are my priorities. Hope that makes sense. When you are younger, climbing a ladder to success, you can be more inclined to do things because of pier pressure or whatever.

The Billy Graham website has a cool section where you can ask him a questions. Here are the responses I got when I entered the search string using the word spirituality.

I have a relationship with Christ who is frequently on my mind and always in my heart. I may not be in church every Sunday, for which I give no excuses. There are some great church shows on television on Sunday, well done religious channels on the car radio, bible applications for the computer tablet and a box of CDs containing the bible. To each his own on this subject. I still trust the best way to understand and learn to apply religious beliefs is through organized religion and prayer.

Surely having ones mental, physical and spiritual health in order would help with the chance of success in a major life change such as retirement to fulltime RV living and travel. Frankly, I’m finding it much easier to do this at this point in my life compared to those younger years.  I’m a lot happier. When I stop and think about all that is going well, give thanks to God and appreciate the ones that love me is when I feel the mental and spiritual fitness.

Karen and I have been talking about reoccurring monthly expenses. We had both Amazon Prime and Netflix service both of which offer streaming video. I think Netflix is easier to use but Amazon Prime is a better value as we shop online. So we dropped Netflix. We cut some of the premium channels our cable provider offers. I mounted a digital TV antenna in the attic rather than adding cable boxes for televisions in other rooms. Basically, any bill we receive monthly is up for evaluation as to its worth. I added a flexible spending account through payroll deduction so we can pay for medical expenses on a before tax basis. Dropped the full insurance coverage on our older truck and have generally been doing a series of minor tweaks to anything dealing with monthly expenses. Planning for retirement a few years from now sure has impacted my thought process on how we spend money today.

There are some major financial considerations on my mind. They’re probably on Karen’s mind also  – because I talk about them a lot!  In order for these major financial changes to work we both have to agree on them.  We have three family cars and I am issued a work vehicle that I take home and am required to drive everywhere while on-call one week a month.  At the most, Karen may return to part-time local work. Other than one of us leaving town without the other for a few days, we have no need for more than one family vehicle.  I’m really thinking about getting with Karen and trading off our three vehicles for a newer SUV that can pull a 5×10 trailer for the next three years or so. That would lower several monthly expense categories. We could always rent a car for those times when one of us needs to leave town while the other still has the family car.  For years I had an SUV rather than a truck. Having a utility trailer is the next best thing to having a truck. We already own the trailer.

Today, I had a battery put in my car which is driven less than 7,000 miles a year.  The last oil change on our old truck was more than a year ago and we gas up Karen’s car about once a month.  Besides, as a single vehicle is in our future (big truck for the camper) we might as well get used to having just one.

Another big financial decision is do we keep the house until we retire or sell out a couple years early and move into a nice rental unit – with a garage? I’ve been reading blogs lately where others did this before going fulltime. Lots of pros and cons to this. At the very least, we both want to enjoy what we have right now. Eventually, I’ll post about what we decide and why.

I’ve been spending time researching RV construction methods. I’m working to gain a better understanding of tires, wheels and brakes. I’ll post my findings later and hope to get some feedback from others.

P.S: Forgot to add another major cost savings change. Karen has been shopping at thrift stores for most of our clothing needs. She has a lot of fun with that. Today we bought four – never been worn – shirts and she found a great pair of leather gloves. Spent five dollars on the lot.

Thanks for reading and your comments.