Mariners and Unique Financial Strategies

Picture this: you toss a sea bag into a rack and embark on a three-month stint aboard a tanker sailing from Beaumont to Singapore. Your work hours stretch from 0600 to 1800, and it’s a constant buzz since you’ve cleared Breakwater.

One day, during a brief pause at the Fantail, we overhear a fellow crew member discussing a new tariff making waves in the global market. Everyone seems to have something to say about it. But, since you were in the third deck, you were more focused on the dollar cost averaging of the S&P 500, considering yourself a long-term investor. A wise captain once advised, “Buy the index, ride the waves, don’t panic.” That’s a mantra to keep in mind.

However, this time, things feel different.

A friend I hold in high regard mentioned the idea of harvesting tax losses upon my return. Selling underperforming investments in taxable accounts to lock in losses can offset income by up to $3,000 annually. The rest could help minimize future capital gains, allowing you to craft a strategy to purchase something similar—not “substantially identical,” per IRS guidelines. Implemented correctly, it has the potential to significantly reduce your tax bill in the long run.

But there’s a catch. These financial moves might face hurdles related to freight divisions, maintenance, and port scheduling. The opportunity to make such transactions aligns with U.S. market hours, but once the bell rings, you’re either clocked in or catching up on sleep. Oh, and let’s not forget StarLink, whose connectivity can be sporadic. By the time you manage to solidify a few trades, the market might have already rebounded by 18%. You missed the chance to capitalize on that loss.

Does that resonate?

This situation is frequently echoed by Mariners. Those whose work schedules, cash flow, and lifestyles don’t align neatly with conventional financial models. Whether stationed in blue water, brown water, or managing marine logistics, finding a way to build wealth and plan for retirement must cater to your unique circumstances.

A chief engineer I once spoke with made a valid point:

“We live in chunks. We get paid in chunks, spend in chunks, take holidays in chunks, and even invest in chunks. Our way of life contrasts sharply with that of the typical 9:00-5:00 worker.”

Absolutely. It’s crucial that your financial approach mirrors this reality.

This is how Mariner’s client manages their finances, addressing their specific challenges:

1. Chunk-based cash flow planning

Like many others, Mariners don’t receive a steady paycheck every week. You might bring in hefty checks during your hitch, only to face dry spells until your next vacation. This calls for a spending and investment strategy that revolves around “chunk-based cash flow.”

Set up automatic transfers while you’re on your hitch to manage sub-accounts for emergency funds, investments, future travel, or taxes if your employer doesn’t withhold state tax. Then, focus on the remainder of your pay while you’re away from the ship.

2. Autopilot Investment Management

Accessing Wi-Fi or live data can be a challenge offshore. Hence, Mariners can leverage investment strategies on autopilot. A pre-set asset allocation combined with model portfolios and rebalancing rules, along with a tax loss harvesting protocol supervised by an advisor, can be particularly beneficial.

A reliable advisor can implement this strategy for you, allowing them to manage your investments without you needing to log in while navigating swells off the coast of Africa.

3. Customized Non-traditional Income Tax Strategies

Mariners often face significant tax burdens, especially during lucrative years filled with overtime and hazard pay. Yet, there are methods to ease this burden:

• Harvest tax losses—as discussed earlier
• Maximize pre-tax retirement accounts—while making money
• Health Savings Accounts (HSAs)—if you have a deductible healthcare plan
• Roth IRA conversions—while receiving payments during sabbaticals or in tax-exempt combat zones
• Qualified Business Income (QBI) Deduction—for contractors operating under LLC or S-Corp structures

Final Thoughts

Life in the maritime industry is unlike any other. While the sea offers freedom, it brings challenges, particularly concerning personal finance. Standard guidance designed for those in cubicles doesn’t translate well to this world.

Mariners receive rewards in chunks. You navigate life in chunks. Therefore, your financial planning should also be conducted in chunks—flexible, automated, tax-smart, and aligned with your unique schedule, not someone else’s.

If you’re finding it difficult to fit traditional financial solutions into your life, it might be time to consult someone who understands your world and speaks your language.