October 2012 - Association of Marina Industries

8
Industry News Continued from Page 7
By plugging the above variables into several different equations
we can calculate what it will cost to replace your docks
in “x” years, how much cash you’ll need to meet the 30%
requirement, and how much you will want to put into your
investment account each month to reach your goal.
Assuming construction costs increase each year by 3% and
your investment account pays 4%, in 30 years you’d need
to come up with approximately $6.2 million for your 30%
down payment. Given the same assumptions as above, this
means you would need to put $8,900 into your investment
account each month.
Let’s say you plan to rebuild your marina in 30 years and
the cost to rebuild it, if you were to do it today, is $8.5 million.
You’ll need 30% of $8.5 million for a down payment,
which means if you were to rebuild the marina right now
you’d need $2.55 million in cash as your down payment.
Mind numbing? For most of us, yes. But having this knowledge
can also be freeing and can set you on the right path
to ensure that the funds needed to replace your dock system
when it reaches the end of its useful life are available.