Engine Reserve $$$$

[flygirl34q]

I am confident that I could buy an engine as-needed. I do not set a separate fund aside.

+1... same here. I know I'll be grumpy writing my check when the tiime comes, but considering the alternative, there is no alternative.

 

[Ted]

well there is always ol' blue to worry about...it has been 170K miles since its last overhaul

Do you have $200 in your bank account?

 

[TripleZ]

Reading through the comments, it seems like the consensus is paying into an engine reserve at 0% interest is kinda silly. And I'd agree, $15k in a savings account is silly.

But why can't the individual owner or LLC invest that $25/hr into stocks or other higher yield investment? Or some % of it, so that you have an immediate liquid assets for repairs and the invested money (which can be liquidated in under a month) for major repairs or engine overhaul.

Anyone run their club, LLC, or partnership like this? Downside? (other than more complicated taxes)

 

[n12365]

How many owners actually set money aside per hour, to over haul their engines. or do you simply dip into saving to get it done?

I own a 172 with 3 other guys and we pay into a general maintenance fund for each hour of flight. When we overhauled the engine in January, we payed for it out of the maintenance fund and still had several thousand dollars left over. The maintenance fund is also great for things that come up between overhauls.

Ryan

 

[n12365]

Reading through the comments, it seems like the consensus is paying into an engine reserve at 0% interest is kinda silly. And I'd agree, $15k in a savings account is silly.

But why can't the individual owner or LLC invest that $25/hr into stocks or other higher yield investment? Or some % of it, so that you have an immediate liquid assets for repairs and the invested money (which can be liquidated in under a month) for major repairs or engine overhaul.

Anyone run their club, LLC, or partnership like this? Downside? (other than more complicated taxes)

Our LLC considered that, but it wasn't worth it. If we stayed with safe investments, we would be lucky to get 2%, which on a $10k mx fund, is only $200 a year. No one wanted to consider riskier investments.

Ryan

 

[denverpilot]

I don't have a plane but if I were fortunate enough to get one I do think I'd pay in to a engine fund. Your not loosing use of the money its still there and earning a paltry interest rate for you. Currently I rent and have a separate flying account

Actually, when the rate of inflation is higher than the rate of return, you are losing money -- just sayin' -- but not a lot.

If you normally do better than savings account or Certificate of Deposit rates of return on your personal investments... most folks do. Especially with where they're at right now... it's not hard to do significantly better.

Like I said, just sayin'...