“If we could sell our experiences for what they cost us, we'd all be millionaires,” is a great quote from Abigail Van Buren of “Dear Abby” fame. Nowhere is that more true than with our personal finances. Whether it was running up a credit card balance in college, buying internet stocks in January of 2000, or building a swimming pool, I have learned my fair share of lessons that have cost a small fortune. One of those lessons that I probably got off with pretty cheaply was as a high school kid in small town Texas.

There were four seasons in my corner of the world. Football Season, Duck Season, Baseball Season, and Lake Season were our versions of fall, winter, spring, and summer. Both Duck Season and Lake Season required one of two things: a boat or a friend with a boat.

When I was 17 years old, I decided I was going to be the friend with a boat, so I bought a used 14 foot aluminum john boat, trailer, and motor for about $1000.

I was very proud of my purchase and initially used the boat as often as possible. With use comes wear and tear, and pretty soon I had to pay a mechanic a couple hundred dollars to repair a problem with the motor. Then there was the blowout on the trailer that required a new tire. Then I bent the propeller on an underwater stump. It seemed there was always something that needed fixing. There were also annual registration costs, storage fees, and just regular maintenance.

All of those expenses easily added up to as much as I had originally spent on the boat over the following five years. To make matters worse, I found myself using the craft less and less as life got in the way. Finally, as I was about to graduate college, I sold the boat for about half of what I had paid for it.

I was reminded of this lesson recently as I was speaking to a friend about what he was going to do with some unplanned wealth, a settlement he was receiving from a lawsuit. He told me that he had always wanted to own a boat and that he was going buy a brand new one. “Life’s too short not to enjoy it,” he said.

“Unless life’s too long to enjoy because you’re broke,” I thought to myself. Instead, I asked him if he would mind if I did a comparison of the cost of owning the new boat vs renting one whenever he wanted to hit the lake. He agreed to hear me out.

First, I looked at boat ownership. The ski boat he was looking at cost about $100,000. The amount of depreciation can vary, but 10% a year seems to be a good conservative estimate after perusing area new and used boat listings. Further, I assumed annual ownership costs (maintenance, repairs, storage, registration, insurance, etc) at 10% of the purchase price, or $10,000 per year. I left out gas and taxes from my analysis, because I figured they would have similar impacts to both scenarios.

Over 10 years, the boat purchase price of $100,000, plus ownership expenses of $100,000, minus the future depreciated sales value of $34,868 at the end of the period, equals a total out of pocket cost of $165,132 ($100,000 + $100,00 - $34,868).

Next, I checked out the US Coast Guard 2012 National Recreational Boating Survey. There I learned that the average power boat user uses their vessel 12 times a year for 6 hours per boating day. Then I conducted a very unscientific survey of several Austin and Houston area marinas to see what it costs to rent a nice ski boat for an hour. The average was close enough to $100 an hour to use that for my analysis.

I took the same $100,000 the boat owner used for his purchase and modeled putting the money in a ladder of certificates of deposit. I checked rates on Nerdwallet and it looks reasonable to assume that you could structure the ladder to earn around 2%.

If you rent a boat 12 days per year for the average of 6 hours per day at $100 per hour, you would spend $7200 in annual rental expenses. I calculated the future value of $100,000 earning 2% with annual distributions of $7200, which would leave $43,061 in the bank after 10 years. That’s a net rental cost of $56,939.

Some folks say “a boat is a hole in the water into which you pour money.” In this example, my friend would save $108,193 by renting a boat instead of buying over a 10 year period.

That would fill a pretty big hole.  How big? US currency bills are 2.61 inches wide x 6.14 inches long x .0043 inches thick, so that equates to about 7,455 cubic inches.

That’s 32 gallons of dollar bills, more than a drop in the bucket!