What would you do?

[airplane wizard]

folks, believe me, I am no trust fund baby In fact I don't have ********************. I have a Business degree which got me no where. So I got my flying ratings over a 10 year period and that hasne't done anything for me either so far. Iam not talking about a fortune here, but it is enough for me to go back to tech school full time. I was just wondering if people were in the same situation, would they put more into flying, or something else. I was also considering an A/P rating.

 

[airplane wizard]

Oh, and I am debt fee and single as well. I can and will go anywhere any time for the right oppertunity.

 

[Fugawe]

My opinion is to pay off all or as much debt as you can (Cars, credit card, loans) and become debt free. This will allow you to almost be able to live on CFII wages.

check out this guys website:


DaveRamsey.com

Ramsey has great ideas, I used to listen to him a lot. He preaches the debt free perspective. Which, in general, I agree with.

But....there's a lot more to it than just pushing to be debt free if you want more than average earnings. Leveraging your money intelligently is how you make big returns -- businesses understand this, and individuals can too. But, few take the time to learn about this.

There is bad debt, and 'good' debt. Debt to buy toys, food, etc, is bad......if the thing you buy cannot return anything, it's bad debt.

Good debt has returns. You borrow money at 6% to make 15% on it -- net is 9% in your pocket (in general - taxes affect this).

Leveraging ex.-- You put down 10,000 to buy a 100,000 house. You borrow 90,000 interest only at 7%.
--Mortgage payments of $525/mo + maybe another $200 in taxes and ins =
$725/mo. Rent it for $725/mo.......expense is a wash.
--Sell it a year later for $120,000 yourself.
--$20,000 profit, you put $10,000 into the deal = 200% return.

This is leveraging. Plus you run the rental as a 'business' and write off any normal household expenses and repairs you might incur (on this house or any other you own.......if you get my drift). Boosts your profits, and lets you buy many things 'pre-tax'.

All businesses use leveraging and 'good debt', otherwise they wouldn't exist. You must know your risks though. Knowledge is key.

Debt free living is admirable, but understand its limitations.


Fire away,
Fugawe

 

[FN FAL]

FN FAL,

He asked, I wrote my opinion. Don't see how this hosed anyone.

I didn't get the sense that 'airplane wizard' was a trust fund baby at all. Nothing in his/her post points to that. Just a 35 yr old CFII looking for opinions. I offered mine, and assumed nothing of anyone in it......other than the fact that some will disagree with me.

That's how 'opinions' work.



Fugawe

If he invests that money in a home or retirement fund, he'll hose over a lot of people that might have a better idea of what to do with that money.

I made the assumption that if someone knew the value of a dollar, they wouldn't have posited such a question in the first place...I'm not attacking your opinion.

For all I care, the guy can saunter over to the aviation casino and buy a type rating and a hundred hours of multi time, those poker chips can pay off. You never know.

 

[FN FAL]

My opinion is to pay off all or as much debt as you can (Cars, credit card, loans) and become debt free. This will allow you to almost be able to live on CFII wages.

Exactly, pay yourself first.

 

[dueguard1]

I just recieved some inheretence that is enough for me to back to school for a career change from my current job. I have 600 hours tt and my Comm SEL, CFI, CFII but I have not been able to find many students. My question is, should I invest (i.e. blow it) in buying some ME time and maybe moving to another area of the country where I might be able to do more instructing? Or should I try something else? I am 35 now and is there a reasonable chance that I could get on with a regional airline, or is there just too many people and too few jobs?

Thanks

Simple..My Man....Invest in some property think Long Term!....Party with the rest or buy something else that you've always wanted.....Pad the the Logbook, and click enter for that Regional gig you're looking for! Everyone's Hiring! Also pickup "The Millionaire Next Door" great book that changed my whole financial battleplan for life.

 

[FN FAL]

There is bad debt, and 'good' debt. Debt to buy toys, food, etc, is bad......if the thing you buy cannot return anything, it's bad debt.

Good debt has returns. You borrow money at 6% to make 15% on it -- net is 9% in your pocket (in general - taxes affect this).

if an investment is fleeting, you might just have to use credit in order to capture the opportunity.

I used a 21% credit card to capture an investment opportunity which doubled in value within a month after I invested. I had to use the card to secure the purchase of this investment because I didn't have the cash on hand and the bank would give me a personal loan. The item could have sold within hours and be gone. I used the card, then paid off the card with a low interest loan against my life insurance. In three years, the investment has literally tripled in value and will continue to do so unless something fubar happens with a couple of federal acts.

 

[Checklist]

You listed SE COMM, CFI, CFII. Is it safe to say that you have 0 ME time? If so you must make a decision. Is this for 100% sure the career that you want. If so you must

1. Realize that you have 25 years left. If it takes you two years to get on with a regional you will be 37. If it takes min another 7 years to have a shot at the majors you will be 44 with 16 years left in the industry. Please don’t take this as a deterrent from starting, just take it into consideration. If you choose to go to the airlines, you might consider making a career out of a solid regional like horizon or express jet.

2. Get your COMM ME. Once you get your COMM ME then you can start building some valuable time.

My advice if you choose to pursue this career is, research jobs flying light piston twins. Once you found a possible job move to that town and get your COMM ME in that town while networking at the company. Refuse to ever pay for another hour of flight time from that point forward. Once you are rated use the investment that you made to produce a return. Any PFT is a sad mistake, whether it be airline placement programs or just buying ME time.

A friend of mine built some great time flying Texas pipeline in a 310.

 

[FN FAL]

1. Realize that you have 25 years left. If it takes you two years to get on with a regional you will be 37. If it takes min another 7 years to have a shot at the majors you will be 44 with 16 years left in the industry. Please don’t take this as a deterrent from starting, just take it into consideration. If you choose to go to the airlines, you might consider making a career out of a solid regional like horizon or express jet.

25 years left? Don't make it sound so final, he can come and fly Caravans with me after he turns age 60 and leaves the regionals. We hired an age 60 Embraer Captain from a regional last winter, so life doesn't end at age 60.

 

[Regul8r]

I just recieved some inheretence that is enough for me to back to school for a career change from my current job. I have 600 hours tt and my Comm SEL, CFI, CFII but I have not been able to find many students. My question is, should I invest (i.e. blow it) in buying some ME time and maybe moving to another area of the country where I might be able to do more instructing? Or should I try something else? I am 35 now and is there a reasonable chance that I could get on with a regional airline, or is there just too many people and too few jobs?

Thanks

It sounds like your goal is airlines, no? Why don't you tell us what you THINK an airline job entails, and that way the people on here can let you know if your expectations are in the ball park or not. If airlines are not your goal...disregard