Who Is Planning the Captain’s Wealth?
Shipowners understand the importance of managing assets for the long term. But what about the professionals responsible for operating those assets?
A successful career at sea can provide something increasingly difficult to achieve in many professions: the ability to earn a strong income over a sustained period of time.
For Masters, Chief Engineers and other senior maritime professionals, those earnings can create a significant opportunity to build long-term wealth.
But earning well and becoming financially independent are not necessarily the same thing.
That distinction came up recently during a conversation with a senior maritime professional. We were discussing how sophisticated the financial world surrounding shipping can be.
Shipowners think carefully about capital. Assets are acquired, financed, managed and deployed with a long-term objective. Risk is considered. Capital is diversified. Decisions are made with an understanding of what those assets need to achieve over many years.
Yet the professionals responsible for operating those vessels may spend decades building highly successful careers without applying the same level of structure to their own personal wealth.
The question isn’t simply: How much do you earn at sea?
A more important question may be: What is the income you earn at sea ultimately building for you?
The next contract
Maritime careers have an unusual financial rhythm. Periods at sea can generate significant income, followed by time ashore. Contracts finish and new ones begin. Promotions bring higher earnings. Lifestyle and family commitments develop alongside them.
It can become very easy to think financially in terms of the next contract.
But eventually almost every maritime professional reaches a point when another question becomes more important: How many more years do I actually want to do this?
For some, the answer may be many. Others may want to move into a shore-based maritime role, start a business, spend more time with their family or simply have greater control over when and where they work.
The important word is choice. Financial independence doesn’t necessarily mean retiring early or never working again. It can simply mean reaching a position where your next career decision is no longer dictated entirely by the need for another salary.
Turning income into capital
This is where planning during the higher-earning years becomes important.
A maritime professional might have another 10, 15 or 20 years of strong earning potential ahead. Viewed simply as future salary, that is valuable. Viewed as an opportunity to systematically accumulate assets, it can be much more powerful.
EARN → SAVE → INVEST → BUILD → CREATE CHOICE
The objective is to consistently convert part of today’s income into assets capable of supporting tomorrow’s lifestyle.
Over time, those assets may include cash reserves, investment portfolios, pensions or retirement arrangements and other long-term investments appropriate to the individual’s circumstances.
The precise structure will vary considerably depending on where somebody lives, their tax residence, family circumstances, objectives and where they expect to live in the future. For internationally mobile maritime professionals, those considerations are particularly important.
International careers need international planning
A maritime career rarely fits neatly inside one country.
Someone might be a citizen of one country, resident in another, employed by a company elsewhere and spend much of the year working internationally. Their savings and investments may also have accumulated across several countries and currencies.
That makes portability important. A financial strategy that works while somebody is based in Dubai, Singapore or another international maritime centre may need to continue working if they eventually return home or relocate elsewhere.
This is why the planning should begin with the person rather than a financial product.
| Where are you now? Where do you expect to live in the future? What have you already accumulated? What level of capital would give you greater financial freedom? How many years do you realistically have to build it? |
Only then should the investment structure follow.
Start before you need the exit
One of the least effective times to begin thinking seriously about financial independence is when you have already decided you want to leave sea. By then, time – perhaps the most valuable component of long-term investing – has already been lost.
The better opportunity is during the years when income is strong and leaving sea still feels some distance away.
That doesn’t require knowing exactly what life will look like in 10 or 15 years. It simply means building the financial resources that will give you more options when that time arrives.
Because ultimately, the measure of a successful maritime career shouldn’t only be the rank achieved, the vessels commanded or the income earned. It should also include what those years at sea have enabled you to build for the life that comes afterwards.
The objective isn’t necessarily to stop going to sea.
It’s to reach the point where going back becomes a choice rather than a financial necessity.
About the author
Rajesh Sharma, BSc (Hons), CII (FAIQ), is Founder & Principal Adviser of Meridian Wealth Office, specialising in international wealth and cross-border financial planning for internationally mobile professionals, expats and maritime professionals.
Wealth Management for Seafarers: meridianwealthoffice.com/wealth-management-for-seafarers/
