How can people afford expensive cruises?

[Karysa]

Hey, I'm right there with you on this one. My trip to Italy in May was done with: airfare by frequent Flyer Miles, 7 nights on points/certificates, 1 night via a friend who works for a large hotel chain (Rome Cavalieri, Westin Florence, Hilton FCO, Sheraton CDG... I paid only for lunch/dinner/gelato/drinks - didn't pay for breakfast since it was comp'd for all my stays.

 

I've always worked the system. But, I have to get my miles/points back up to where I can use them again for another trip. Hence, my monthly bills are auto-paid with my Delta and Hilton credit cards to get the miles and points (Then I pay it off each month so no interest)...Paid my income taxes with one of my cards to the points/miles. Pay for all my groceries with one of the cards to get the points/miles. Kind of serves two purposes: gets my miles/points and keeps my credit rating up there!

 

This may be a little off topic but I need to ask. We booked a flight from Toronto to Venice for $1050 ish. Aeroplan asked for 40,000 Points, a couple of hundred in taxes and a fuel surcharge that was $500. I think that this is a rip-off. Did you have to pay a fuel surcharge on top of a substantial amount of points?

[kimanjo]

Perhaps they are spending their kids inheritance much like we hope to do one day.;)

 

 

That MIGHT work if only you knew how long you were going to live. That's the kicker, getting the timing right!

 

Matching the "date of departure" with the yearly spend, would be great. If it only worked.

 

Spend all your money thinking you will die at 81, and oops, your'e still around at 91. Those 10 extra years will LEAN to say the least.

Edited October 25, 2013 by kimanjo

[Karysa]

That MIGHT work if only you knew how long you were going to live. That's the kicker, getting the timing right!

 

Matching the "date of departure" with the yearly spend, would be great. If it only worked.

 

Spend all your money thinking you will die at 81, and oops, your'e still around at 91. Those 10 extra years will LEAN to say the least.

 

Definitly will hope and plan for 90 but live life to the fullest as the years get closer and closer to that number.;:D

Edited October 25, 2013 by Karysa

[Twickenham]

This may be a little off topic but I need to ask. We booked a flight from Toronto to Venice for $1050 ish. Aeroplan asked for 40,000 Points, a couple of hundred in taxes and a fuel surcharge that was $500. I think that this is a rip-off. Did you have to pay a fuel surcharge on top of a substantial amount of points?

 

The big negative with using Aeroplan points on AC is the ridiculous fuel surcharge (same problem on BA/avios). The trick is to try and find redemption on non-AC flights - for instance, I just searched for YYZ-VCE, and if you can get a flight on US Air, it costs just $80 in taxes. Also, as of January 1st they're bringing in true one-way pricing, so that 40,000 points will become 30,000.

[1313steve]

Years ago, I used to sell in ground swimming pools. When I would pull up to the home for the first visit, typically is was a very nice home, in a very nice neighborhood. Cars were nice, house was decorated beautifully, etc. etc. All the appearances of wealth.

 

I was often shocked how many of these people couldn't qualify for a pool loan for even the most basic pool, not to mention the one they wanted with all the whistles and bells. Most of them had good credit, but had horrible debt to income ratios. In other words, they had no extra cash and were using it just to pay the bills for what they already had.

 

I'm sure there is some of that in the "high end" cruise market, too. People seem like they have money, but they are in debt up to their eyes.

 

On the other hand, I have several friends where both spouses have jobs that pay in excess of $200K, have no kids, have nice houses and cars, and travel in high style very regularly. As others's have said, it's about priorities!

[Elaine5715]

Really good points but worth mentioning that just by our traveling/cruising to every corner of the world we are contributing to those less fortunate. The tourism industry provides the majority of revenue for many location. It is the largest segment for providing work and revenue for village, town and city services.

 

A great many families depend upon tourism dollars/pesos/yen etc to put food on their table.

 

 

That was exactly what I was thinking. Those folks have likely contributed more and most constructively to third world cultures than any government foreign aid.

[Nebr.cruiser]

This may be a little off topic but I need to ask. We booked a flight from Toronto to Venice for $1050 ish. Aeroplan asked for 40,000 Points, a couple of hundred in taxes and a fuel surcharge that was $500. I think that this is a rip-off. Did you have to pay a fuel surcharge on top of a substantial amount of points?

 

I don't really know what Aeroplan is, but we frequently (most of the time) fly with FF miles from American. We have yet to have a fuel surcharge--in fact, didn't know there was one--and a one way trip to Europe is 20,000 miles in economy. We haven't flown into Venice, but fees to Rome are a little over $100.

 

Now, flying into Heathrow is much, much more expensive--taxes on a trip I priced recently using FF miles was around $900! Apparently that airport has huge tax/usage fees, so we look for flights that don't land there. It's not that easy for us in the winter and fall though, every flight I looked at stopped there. So we avoid that airport all together.

 

So, we didn't do that trip, which was a December Transatlantic, because every flight landed in Heathrow, even if for a connecting flight.

[LindaM]

I know 125,000 sounds like a lot of money for a couple, but it really isn't---at least where I live. Especially when you own a 4 BR 2 BA home, with the taxes that go along with it. With that income, you could do one average cruise a year. I was a teacher and DH an electrician, putting away the same amount for retirement. Comparing our situations, you are where you should be. Sorry, but that is the honest truth.

 

I believe a lot of the "older" people we meet on luxury/European cruises are also taking the mandatory withdrawal from their retirement accounts. If they saved what they should have, that would easily pay for two luxury cruises a year!

[Twickenham]

I don't really know what Aeroplan is, but we frequently (most of the time) fly with FF miles from American. We have yet to have a fuel surcharge--in fact, didn't know there was one--and a one way trip to Europe is 20,000 miles in economy. We haven't flown into Venice, but fees to Rome are a little over $100.

 

Now, flying into Heathrow is much, much more expensive--taxes on a trip I priced recently using FF miles was around $900! Apparently that airport has huge tax/usage fees, so we look for flights that don't land there. It's not that easy for us in the winter and fall though, every flight I looked at stopped there. So we avoid that airport all together.

 

So, we didn't do that trip, which was a December Transatlantic, because every flight landed in Heathrow, even if for a connecting flight.

 

Aeroplan is Air Canada's FF program - although, technically, it's owned by a separate entity.

Both AC and British Airways impose fuel surcharges on their awards tickets, even thru partner redemption. So, I'd look at that awards ticket to LHR you were trying to book - most likely, it was on a BA flight. Try to find a flight that uses AA metal and you'll probably find that the total fees are vastly lower.

[calliopecruiser]

The big negative with using Aeroplan points on AC is the ridiculous fuel surcharge (same problem on BA/avios). The trick is to try and find redemption on non-AC flights - for instance, I just searched for YYZ-VCE, and if you can get a flight on US Air, it costs just $80 in taxes. Also, as of January 1st they're bringing in true one-way pricing, so that 40,000 points will become 30,000.

 

I find the best Aeroplan values are in the business/first tickets; I've flown several times to and from Europe in Executive/First at about to $500 or $600 a pop (which made my points worth about $3-4K).

[ducklite]

As others have mentioned it's a matter of setting priorities and I'll add good investing.

 

We are not planning on having Social Security when we retire, and are saving accordingly. Should it still exist, we'll easily be able to afford a longer cruise (~30 nights) every year or so just by using that non-taxable income alone.

[slidergirl]

This may be a little off topic but I need to ask. We booked a flight from Toronto to Venice for $1050 ish. Aeroplan asked for 40,000 Points, a couple of hundred in taxes and a fuel surcharge that was $500. I think that this is a rip-off. Did you have to pay a fuel surcharge on top of a substantial amount of points?

 

I used Delta. I did a mix of Economy Comfort and Business (business both ways was only available at high redemption). I didn't have a fuel surcharge - my taxes were only $112.80US. The fuel surcharges are airline by airline - sounds like AC really kills on that one...

[Porthopper101]

How lovely for them. Cannot help but pour a little cold water on this. One has to hope they are also charitable. Think of all the good that could be done with just half of what they have spent on world cruises.

 

I love your signature quote "You are responsible for your own happiness."

 

M

[ducklite]

How lovely for them. Cannot help but pour a little cold water on this. One has to hope they are also charitable. Think of all the good that could be done with just half of what they have spent on world cruises.

 

Wealthy people tend to give generously to charity. Some do it for the tax breaks, some do so because it's how they were brought up. That said, even if they don't, I don't see it as anyone's business but their own.

[shipcamein]

You can enjoy these perks easily. I can think of several ways. (On the read-over, I sound ...unpleasant! That's not my intent - my comments are sincere!)

 

Buy a smaller house 20 years ago, so it's nearly or completely paid off today, then use your absent mortgage payment of 1k/mth to save up 24k$ in two years, and head for Crystal.

 

Work as a policeman/teacher/office staff/etc., not for TODAY, but for the past 40 years, saving as you go. When you retired, you were probably making 60K a year or more, with no mortgage, no kids, and several

paid-for cars. Just one year like that will pay for a nice ride on Seabourn.

 

Contribute only $3000 a month to your retirement instead of $4000 (far from a "moderate amount" considering the nation's average income is about that much). That will give you 24K over the next two years, and you can get on Silverseas...every two years.

 

Note the great majority of luxury cruisers are retired or nearly so, enjoying the benefits I've just described, regardless of their career.

 

And of course there are some independently wealthy, and some 1%-ers (but only about 1 in a 100 reach that... ; ) ) , there are folks on cruises paid for by their children, by their parents, there are plenty of people using their credit card...once or twice only...

 

Anyway - the point is - there is no magic or crazy Money Tree or some great unfairness. If you planned ahead (long before now), saved regularly, worked for 40 years, and lived below your means, you are presently enjoying a cruise on SeaDream, probably annually. If you did not - it's RCL. (no offense, RCL lovers...)

 

Simple.

 

Any way you slice it though, you (both the OP and the luxury cruisers, and in fact any cruiser), are remarkably fortunate just to have had a job, food, shelter, and the rest. It must seem quite mysterious to most of the planet that we can afford any cruise here.

[Sherlock43031]

socking away $48k of a $125k salary and living how you currently do.. big house, nice neighborhood, etc.. seems not to add up. what profession is he in that he only makes $125k?

 

 

last year I bought a new Accord for about $26k, my neighbor bought a Land Rover for $50k (never goes off the blacktop and sucks gasoline. the difference will buy me a lot of cruising.

[calliopecruiser]

what profession is he in that he only makes $125k?

 

Do you mean you can't think of a profession where a salary would "only" be $125K? I can think of several professions with an average income of less than $125,000 - some significantly less. Architects, college professors, psychologists, veterinarians, nurses, CPAs, or clergy, to name a few.

[ellasabe]

Do you mean you can't think of a profession where a salary would "only" be $125K? I can think of several professions with an average income of less than $125,000 - some significantly less. Architects, college professors, psychologists, veterinarians, nurses, CPAs, or clergy, to name a few.

 

Absolutely! And let's add attorneys, head engineers, chemists, pharmacists, software developers, bank presidents....I could go on and on.

 

A typical scenario in our neighborhood: age 50-60 men are working f/t and making about $125K. Wife stays home and takes care of minor house maintenance (pool, some yardwork like mulching), housecleaning (no paying a cleaning lady), clip coupons and shops at Costco or BJs. Live in a paid-for house worth about $250K. Compare that to these recent statistics, per US World & News and the Wall Street Journal (2013):

 

--38 million working American have ZERO retirement savings

--Average American retiree age 65 has $12,000 that's twelve thousand dollars in all retirement accounts

--Average American retiree age 65 has a house with equity of $170K

--Average American retiree age 65 has an annual income (SSI, pension) between 15 and 19K

--Median asset income for ages 65 and over: $1,200 per year

 

 

Based upon the above, I think we are seeing just the tippy tip of the tip of the tip of the iceberg among world cruisers.

[ducklite]

Absolutely! And let's add attorneys, head engineers, chemists, pharmacists, software developers, bank presidents....I could go on and on.

 

A typical scenario in our neighborhood: age 50-60 men are working f/t and making about $125K. Wife stays home and takes care of minor house maintenance (pool, some yardwork like mulching), housecleaning (no paying a cleaning lady), clip coupons and shops at Costco or BJs. Live in a paid-for house worth about $250K. Compare that to these recent statistics, per US World & News and the Wall Street Journal (2013):

 

--38 million working American have ZERO retirement savings

--Average American retiree age 65 has $12,000 that's twelve thousand dollars in all retirement accounts

--Average American retiree age 65 has a house with equity of $170K

--Average American retiree age 65 has an annual income (SSI, pension) between 15 and 19K

--Median asset income for ages 65 and over: $1,200 per year

 

 

Based upon the above, I think we are seeing just the tippy tip of the tip of the tip of the iceberg among world cruisers.

 

What the heck are these people going to do when SS is reduced or goes away entirely or their pension fund goes bust (or both)? Holy smokes, if I had that little I'd probably just shoot myself and end the suffering early. It would be better than living in a cardboard box. I really,m really hope these people are doing NOTHING that costs more than a dollar in gas to get to the library to borrow books and DVDs, and saving every dime they can, because they will be out of money by the time they are 70. These statistics are sobering and very scary.

[Nebr.cruiser]

Aeroplan is Air Canada's FF program - although, technically, it's owned by a separate entity.

Both AC and British Airways impose fuel surcharges on their awards tickets, even thru partner redemption. So, I'd look at that awards ticket to LHR you were trying to book - most likely, it was on a BA flight. Try to find a flight that uses AA metal and you'll probably find that the total fees are vastly lower.

 

I *think* (it was several months ago) that I did check into that option. The problem seems to be that there are no direct flights, say from NY to Rome, after a certain date in the fall, at least on American. As I recall, most of them were on BA, so that's probably why fees were so high. I called American direct, rather than just online, to try to find a flight that landed almost anywhere else in Europe, direct from the US, and they could not find one at that time of year either, even on partner airlines.

 

We have flown into Rome and Heathrow before without those huge fees, but it was in spring, so there were direct American flights. I thought the fees were from Heathrow, not realizing it was BA. Thanks for the info.

[sherilyn70]

--38 million working American have ZERO retirement savings

--Average American retiree age 65 has $12,000 that's twelve thousand dollars in all retirement accounts

--Average American retiree age 65 has a house with equity of $170K

--Average American retiree age 65 has an annual income (SSI, pension) between 15 and 19K

--Median asset income for ages 65 and over: $1,200 per year

 

Interesting statistics.

At age 43 I have more than that in my 401k. My husband has a full pension and also a 401k and stock options.

We have a lower house equity though as I chose to buy under my means and have a condo (I placed my priority on vacations). I purchased this based on my own single income so having a second income is just a bonus.

My SSDI payout right now will be higher than the average for a retired 65 year old apparently... I keep avoiding going on it because I don't want the drastic drop in income.

 

Prior to my getting cancer and having to think about additional saving/expenses due to not having purchased life insurance plans yet we had the money to go on at least one nice (ie crystal, regent, etc) type cruises if we wished or take multiple lower priced ones. We had planned on doing Alaska on Regent this year, but then plans changed when I got diagnosed. The money we would have spent on the cruise instead is still in the savings and has also gone towards medical bills (thank god for good insurance) and house modifications. We have two new cars, dine at nice restaurants and buy pretty much anything our hearts desire... we also pay a decent amount of child support for my husbands two children in addition to buying them items outside of that money. Even though I had many weeks of half paychecks while going through chemo for 6 months we never got behind on bills and never used the credit cards... and still managed to occasionally put some money into savings.

 

If you choose to live under your means then it you can splurge on some of the nicer things in life. Our last vacation before my illness included 2 dinners at $300 each and we didn't even think twice about spending the money... my coworkers however cringed at the idea of how much we'd spent. That's what some people for a a cruise from what I read on these boards! It's what we enjoy and so we chose to make the budget for it. When I look at our past cruises, we spent about 5-6k for just the two of us, the cost difference to upgrade to a higher end line isn't that much further out of reach considering when you consider the fact that you'll get more complimentary items in the price tag and spend less cash during the cruise.

[Sherlock43031]

Do you mean you can't think of a profession where a salary would "only" be $125K? I can think of several professions with an average income of less than $125,000 - some significantly less. Architects, college professors, psychologists, veterinarians, nurses, CPAs, or clergy, to name a few.

 

I don't know what world you live in but there is no way any of those I put in bold are making $125k or less unless they are terrible at their jobs. I still don't believe they are living as described on $125 - $48 on $77k a year. 4br room house in nice neighborhood the taxes are at least $200 a month and then utilities, cable, gasoline, groceries, etc. this assumes no mortgage. if they are good for them then they could certainly afford to vacation in the style they would like. I said ONLY because she said a professional? which to me means a Doc, Lawyer, Vet, CPA, etc.. when someone says my husband is a professional I don't think clergy or window washer. Now, I understand why when the wife was a head nurse in neurosurgery she would hire Canadians nurses in country on green cards if pay is that bad up there. Hell I'll bet some of the better room stewards on cruise ship pull down close to that a year.

[TC1957]

I don't know what world you live in but there is no way any of those I put in bold are making $125k or less unless they are terrible at their jobs. I still don't believe they are living as described on $125 - $48 on $77k a year. 4br room house in nice neighborhood the taxes are at least $200 a month and then utilities, cable, gasoline, groceries, etc. this assumes no mortgage. if they are good for them then they could certainly afford to vacation in the style they would like. I said ONLY because she said a professional? which to me means a Doc, Lawyer, Vet, CPA, etc.. when someone says my husband is a professional I don't think clergy or window washer. Now, I understand why when the wife was a head nurse in neurosurgery she would hire Canadians nurses in country on green cards if pay is that bad up there. Hell I'll bet some of the better room stewards on cruise ship pull down close to that a year.

 

You probably should qualify that "unless they are terrible at their job" with "or are still relatively new to the profession." My son is a CPA with public experience. He has been a CPA for 4 years and has just taken a job as an Accounting Manager (really Controller but they don't use the term) for a healthcare industry company and is not quite to the level mentioned above. They have a nice savings (she teaches at a private College Prep school) and drive new cars. The live comfortably (no financial struggle) in a 5br home.

 

They have cruised Celebrity but are starting a family (fingers crossed) so the cruising will probably stop for awhile. Of course, he is so tight he would never dream of a suite...balcony is fine for them.

[buggins0402]

I don't know what world you live in but there is no way any of those I put in bold are making $125k or less unless they are terrible at their jobs. I still don't believe they are living as described on $125 - $48 on $77k a year. 4br room house in nice neighborhood the taxes are at least $200 a month and then utilities, cable, gasoline, groceries, etc. this assumes no mortgage. if they are good for them then they could certainly afford to vacation in the style they would like. I said ONLY because she said a professional? which to me means a Doc, Lawyer, Vet, CPA, etc.. when someone says my husband is a professional I don't think clergy or window washer. Now, I understand why when the wife was a head nurse in neurosurgery she would hire Canadians nurses in country on green cards if pay is that bad up there. Hell I'll bet some of the better room stewards on cruise ship pull down close to that a year.

 

Obviously you don't read the median salary reports that are posted on the internet often.....Architecture is one of the college majors frequently mentioned not to go into...median salary...$60K! http://www.payscale.com/research/US/Job=Architect_(but_not_Landscape_or_Naval)/Salary

 

As for CPA's - Median salary is $60K also. The upside on this one is probably better than Architects however.

 

Taxes on house....LOL! We're in a high property tax state, we pay much more than $200/m

[Pecs ado rojo]

I said ONLY because she said a professional? which to me means a Doc, Lawyer, Vet, CPA, etc.. when someone says my husband is a professional I don't think clergy or window washer. Now, I understand why when the wife was a head nurse in neurosurgery she would hire Canadians nurses in country on green cards if pay is that bad up there. Hell I'll bet some of the better room stewards on cruise ship pull down close to that a year.

 

 

I think you are out of touch of what these professions pay across the nation. NYC or SF you may be right. Flyover country no so much.

Edited October 25, 2013 by Pecs ado rojo