How to Turn $500 Into a Yacht

If you like to daydream about being rich, you might envision yourself living in a mansion, driving an ultra-fancy car, and perhaps spending weekends on your yacht. You probably assume that those are unreachable goals, but they may not be. It’s possible, for example, to turn a mere $500 into a yacht.

Here’s a look at how you might become a yacht owner.

What does a yacht cost?

Yachts range widely in size and price, as you might expect. One definition labels yachts of at least about 74 to 78 feet in length as super yachts, and those 200 feet long or longer as mega yachts. Those that are shorter than 74 feet are presumably merely “yachts.” Amazon.com founder Jeff Bezos is reportedly having a “giga” yacht built that will exceed 400 feet in length and cost more than $500 million.

More ordinary yachts can be had for around $1 million — and even less. A 50-foot “lightly used” 2021 Beneteau Gran Turismo 50 Sportfly was recently on sale for $995,000, for example, while a 1999 Viking 60 Cockpit Sport Yacht was selling for $419,000.

Clearly, if you’re hoping to buy a yacht starting with only $500, you might want to aim for the lower end of the price range.

How to turn $500 into a yacht

One way to get a yacht with only $500 might be to buy lottery tickets, hoping for the best. You could buy 500 $1 tickets or 250 $2 tickets or 100 $5 tickets — there are many possibilities. This is arguably the quickest route to a yacht purchase and might even deliver enough for you to buy a super yacht. There’s just one catch: It’s highly unlikely that this approach will work. The odds of a big lottery payout are often millions to one.

So let’s turn to a tried-and-true way of building wealth over time — the stock market. It’s not likely to make you rich overnight, but the more time you have, the more your $500 can grow for you.

Let’s assume that you invest your money in a low-fee, broad-market index fund, such as one that tracks the S&P 500 index of big American companies. The stock market has averaged annual returns of close to 10% over long periods, so let’s assume that your $500 grows at 10% annually — though it may very well grow at a higher or lower annual rate during your particular investing time period.

Over This Period…

$500 Grows to:

10 years

$1,297

20 years

$3,364

30 years

$8,725

40 years

$22,630

50 years

$58,695

60 years

$152,241

70 years

$394,873

Chart and calculations by author.

See? In only 70 years, you’ll have nearly enough to buy that $419,000 yacht!

Okay, so there’s a good chance that you can’t or won’t invest for 70 years for a yacht. That’s OK, because you can amass much more money in far fewer years — by investing greater sums, regularly. Check out the table below:

Growing at 10% for

$1,000 Invested Annually

$3,000 Invested Annually

$5,000 Invested Annually

10 years

$17,531

$52,594

$87,656

15 years

$34,950

$104,849

$174,749

20 years

$63,003

$189,008

$315,013

25 years

$108,182

$324,545

$540,909

30 years

$180,943

$542,830

$904,717

Chart and calculations by author.

See? You might not have thought that you could amass much money over time, but if you’re able to sock away just $5,000 annually for 30 years, you might end up approaching a million dollars — enough to buy two of those lesser-priced yachts. Better still, if you can regularly sock away twice as much as any sum above, you’ll end up with twice as much — so $10,000 invested annually might get you roughly $1.8 million.

Maybe skip the yacht, though

Yachts may seem nice, but there’s much more to owning and enjoying one than merely buying it. There’s a lot of upkeep. It’s estimated that yacht owners will spend about 10% of the cost of their yacht every year on upkeep and operation.

For example, there are costs for maintenance, repair, fuel, insurance, communications, docking, and a biggie — crew costs. If you buy a million-dollar yacht, you’ll likely spend around $100,000 per year while enjoying it.

Consider skipping the yacht purchase. If you really must have some time on a yacht, you can rent or charter one.

Rentals are typically for a few hours or a day, while chartering is for longer periods. You can charter just the boat, shouldering all other costs yourself, or you can charter a room or cabin on a yacht. Or for the most rich-person-yacht experience, you can charter a fully staffed and stocked yacht. That last option varies widely in price, with $10,000 to $150,000 for a one-week charter not uncommon rates, depending on the size and fanciness of the vessel.

Save for retirement, instead

If you really crave a yacht experience, consider your non-purchase options. You might spend, say, $5,000 to $20,000 for up to a week in a rented cabin or a whole yacht — and if you’ve been saving and investing diligently for a long time, you’ll do little damage to your retirement savings.

Those tables above are best used to inspire you to build a hefty retirement nest egg because most of us will sorely need one when our working days are over. After all, Social Security‘s average annual retirement benefit is less than $20,000.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Selena Maranjian owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.