Is owning an airplane worth it?

TexasAviation

TexasAviation

Pre-takeoff checklist
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TexasAviation
I recently started seriously saving for a plane. I've socked away about $20k in the past few months into my airplane savings fund. My plan is to save up around $60k to buy a $40k plane with a $20k reserve fund remaining ... hopefully within the next year or so.

The emotional side of my brain is saying, "Airplane! Airplane! Airplane!" I'm a total addict. I have to get my flying fix at least once a week to stay sane, and I can't wait to buy a plane and get my instrument rating so I can fly more consistently.

But the logical side of my brain says, "Wait a sec. You live in Texas. Real estate is dirt cheap. You could save up a bit more and pay cash for a rental house. Then you could take the income from that and save up even faster for another rental house, and another, and another. And before you know it, you'll be buying another rental property every few months and could fly a VERY nice plane."

So I'm torn between the toddler brain ("I want a plane now, now, now!") and the mature, wise brain ("You'll be better off in the long run if you delay this purchase for a few years.") I go back and forth on it, usually based on how readily available the club's plane is when I need to go somewhere.

I'd be particularly interested in advice from people who are striking a good balance between building financial security and spending on the aviation hobby. Every dollar I spend flying is a dollar I can't invest, and vice versa.
 
Question: Is owning an airplane worth it?

Answer: of course. duh

do you love to fly?

another way to look at it: would you be happier being financially secure (whatever that means) without flying or having an airplane and not being completely financially set.
 
Some of it depends on how old you are and wha you already have saved / invested. If you have nothing saved but the airplane fund, *I* would go with plan B, invest in your future first and buy toys later.
 
When China takes over, they'll take your land, not your airplane.
 
I'm 35 and have retirement savings already. My house is paid off, I max out my Roth IRA every year and invest some into regular ol' Vanguard index funds (not retirement funds) on top of that. So my retirement will be OK regardless.

It's more a matter of knowing that the purchase/operation of an airplane has an opportunity cost that's literally in the millions of dollars over 40 years. Instead of investing in something that boosts my income, I'm investing in something that costs a lot of money. That's an important decision when I'm relatively young.

It's an asset vs. liability question, I suppose ... and the liability side happens to be really, really fun :)
 
Your income is generated in order to have experiences with it. Income with no output converted to experience creates a wasted life.
 
Henning put it very well. You only live once. Who will be enjoying all your savings when you get run over by a bus at 55?
 
I was told a long time ago by a very old man, "The saddest thing on the planet is a person dying thinking, 'I wish I would have...'"
 
Henning said:
I was told a long time ago by a very old man, "The saddest thing on the planet is a person dying thinking, 'I wish I would have...'"
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I wish I would have won the power ball...
 
It really depends on what kind of flying you like to do and how much you want to fly, plus how much enjoyment you'll get out of "pride of ownership."

If you like to go on long trips or want/need a plane that's not something you can rent (like a twin, experimental, etc.) then yes, owning is worth it. I couldn't have done most of the past 2,500 hours of flying without ownership.

However, if you mostly want to buzz around, do $100 hamburgers, just have fun, etc., I would say use the money to make a more sound investment.
 
Gosh, I had a similar thread about a week ago. I too ponder the wisdom of plunking $60,000 to $100,000 into an airplane. I'm ten years from planned retirement & have high income with decent assets & no debt. I can afford it but will it be worth the expense? Renting is working for me now but it's a hassle if you want an airplane for the entire day but will only put a few hours on it.

I guess it's personal decision to be made. So, I'll pour me some scotch & seek my inner self.
 
It sounds like you want to do both and are debating the order of operations.

Do both.

Get a little fun plane just to have the option

Save some money and get the rent house.
Start splitting the profits form the rentals. 50% goes into your new plane fund and 50% goes into your new property fund.

In a few years you will have done both and not put one off for the other.
 
Exactly, everyone has to determine the value for themselves. I've owned 4 planes, and I've never been financially secure. I would have never enjoyed aviation to near the level I have (nor made the same income from the work plane) had I not owned, nor would I likely have 25% of my 2500 hours.

You have to figure out what you want. If you want to be able to just jump in a plane that has all your stuff in it, and just jump out leaving all your stuff behind, then ownership is worth every dime, and you end up flying more, because each flight lowers the incremental cost of ownership creating the impetus to go fly to save money. That is how aviation related mental illness works, you convince yourself that you need to fly more to save money.:lol:
 
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TexasAviation said:
Every dollar I spend flying is a dollar I can't invest, and vice versa.
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Someone has been reading Rich Dad/Poor Dad.

So how long are you gonna wait to start living the life you are building? 40? 50? 60?

If you have a solid foundation which is sounds like you do, spend your money on experiences which owing an airplane can totally do.

I am all for saving and investing, but tomorrow never comes.

For years and years I poured all the money I made back into my business to continue to build that "empire" to "someday" do things like get my PPL and plane. It was not until I shifted gears and starting pouring some of that money back into myself that I stated enjoying life again..and am making better money because of it.

Invest...but do not neglect to invest in yourself.

It is a decision you have to make as to what will make you happier.
 
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Shawn said:
So how long are you gonna wait to start living the life you are building? 40? 50? 60?

If you have a solid foundation which is sounds like you do, spend your money on experiences which owing an airplane can totally do.

I am all for saving and investing, but tomorrow never comes.

It is a decision you have to make as to what will make you happier.
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That....right....there




My aircraft brings me much joy, brings me and my family places we can build memories that others could only dream of.

If you buy right a plane can hedge inflation

If you can swing it, you can depreciate it on your taxes.

Plus if you get your CPL and a certified plane you can also make a few bucks with it.

Also, as far as own vs rent, the planes I've owned and now own, you really don't see for rent.


I've owned for 6ish years, on my second and likely last plane now, wouldn't trade it for the world.
 
When you own you are committed and probably will miss more Downton Abbey and read/write in at least 5 airplane forums ... and you will meet some great and weird folks plus an A&P or two. Not a bad way to spend your life. Oh yes, there is the "Nice day, I think I'll go fly" .. no plan just shear joy.
The penalty is you have 50,000 or so Henning posts to catch up on. :goofy:
 
patrick wentworth said:
When you own you are committed and probably will miss more Downton Abbey and read/write in at least 5 airplane forums ... and you will meet some great and weird folks plus an A&P or two. Not a bad way to spend your life. Oh yes, there is the "Nice day, I think I'll go fly" .. no plan just shear joy.
The penalty is you have 50,000 or so Henning posts to catch up on. :goofy:
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:rofl::rofl::rofl::rofl:
 
JCranford said:
Some of it depends on how old you are and wha you already have saved / invested. If you have nothing saved but the airplane fund, *I* would go with plan B, invest in your future first and buy toys later.
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I wouldn't go into debt for an aircraft that wasn't paying for itself.

Other than that advice, it's your life.

Shawn said:
Someone has been reading Rich Dad/Poor Dad.
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Too bad "Rich Dad" never existed and was a figment of the author's imagination. He's made quite a business out of selling fiction, like many in the financial book world.
 
Do you live to work or work to live. Find a balance between truly LIVING life and just working your way through it. Life is very very short, it is meant to be enjoyed !!!!. You can do both.
 
Take a partner and invest the rest.

Fly and buy.

win-win. Always look for the win-win in life. And save 10% of everything you earn.
 
Hi fellow Texan! Real estate is indeed great here. So many developing economies.

It seems to me that you have plenty of income coming to you either way, and getting a plane will just put off your ability to invest by a few months.

However... depending on what you want to do... from what I've seen online there's a big gap between $40k planes and $80k planes... your options really expand when you hit 70k or so.
Unless you have your heart set on a plane you want, I'd say invest and wait! Doing an equity share is a great option too.
 
If you are just going to fly around the practice area, no.
If you want to be able to take it on trips, without being charged while the plane is tied down and not having pressures to return it on a specific date,time: yes
 
I have a financial plan I am happy with, and enough left over for my plan. If you can say the same than go for it. I haven't found anything that makes me as happy as flying. I could save more, but I'd feel like that time were wasted if I weren't flying.

The freedom to fly when, where, if, how, etc is worth it to me. After renting 20 years, it is a whole new world.
 
I'm recently retired at 57 having worked for companies that provided a retirement and with investing along the way I feel pretty secure. No house mortgage left to worry about just aircraft maintenance and fuel along with typical house utilities.

Life is short, enjoy it!

We love to travel so having the plane works for us. there is nothing better than climbing in the plane and it's clean, headsets are exactly where I left them, I know the maintenance status and fuel qty that's left in the tanks. Owning provides peace of mind along with dispatch at a moments notice...life is good.
 
TexasAviation said:
I'm 35 and have retirement savings already. My house is paid off, I max out my Roth IRA every year and invest some into regular ol' Vanguard index funds (not retirement funds) on top of that. So my retirement will be OK regardless.

It's more a matter of knowing that the purchase/operation of an airplane has an opportunity cost that's literally in the millions of dollars over 40 years. Instead of investing in something that boosts my income, I'm investing in something that costs a lot of money. That's an important decision when I'm relatively young.

It's an asset vs. liability question, I suppose ... and the liability side happens to be really, really fun :)
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well, everything has opportunity costs. Every dollar you spend on anything is one less dollar you can invest.

What is the value of having $100,000 or $1,000,000 or $100,000,000 in the bank if you never spend it because you always want to invest it?
 
no.....owning is not worth it.....according to my wife. :lol:
 
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If you buy the real estate then you will not have time to fly unless you use a management company and then you will not have the money to fly
 
PilotRPI said:
I have a financial plan I am happy with, and enough left over for my plan. If you can say the same than go for it. I haven't found anything that makes me as happy as flying. I could save more, but I'd feel like that time were wasted if I weren't flying.

The freedom to fly when, where, if, how, etc is worth it to me. After renting 20 years, it is a whole new world.
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First time I noticed this I was on a date, around 1am and we drive by the airport, "Hey, you wanna go flying?" "Now?" "Yeah, my airplane is right there ready to go, it's pretty up right now." "Sure, let's go!" Yeah, cool...
 
Do both stay diversified, A plane is an asset it may not give you the return the rental properties do but it is an asset.
Who knows the expenses of flying might be cheaper than the doctor bills the stress of owning all those rental properties might bring.
 
There are some other things to consider as well:

* How close do you live to the airport you rent from?
* How close do you live to the airport where you will hangar your own plane?
* How much does a hangar cost?
* Is there a waiting list?
* Does the airport have insurance requirements?
* Is there an A&P that works on the field at the airport where you hangar your plane?
* Is he/she any good and reasonably priced?
* Fuel on field? Reasonably priced?

For me airplane ownership is really great. I enjoy using my own plane to take trips with my family and to just go up and relax once a week. However, you may need some logistics (like I mentioned above) to fall into place if you're really going to capitalize on airplane ownership.
 
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tecprotb said:
Do both stay diversified, A plane is an asset it may not give you the return the rental properties do but it is an asset.
Who knows the expenses of flying might be cheaper than the doctor bills the stress of owning all those rental properties might bring.
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Not unless you have a job for it it's not. Maybe once you know the market and buy one of the planes that hold value due to commercial capability or cool/collector factor, you can have one that hedges inflation, or if you are an A&P/IA you can also invest your time and make some money. But in general, a GA plane is a Liability, not an Asset.

What a plane is is a time machine, there is why they bring the money they do, it sure isn't their complexity. Also it the most enjoyable way I have found to travel, but what really gets me to spend the money is the view. The view from a GA plane is magnificent.
 
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FWIW.....in 2005 I purchased my '65 Six for $63K.....several years later (with no upgrades) I sold it for $68K and purchased a '69 Bonanza for $63K.

Had I invested that in the market.....I'd be lucky to hold that principle and not had the use of an aircraft....

and full disclosure, I have way too much real estate to buy more. :mad2:
 
Its worth it if it is, and isn't if its not. The OP will know within a few weeks of ownership, if it takes that long. Strangers on the internet certainly can't answer that question.

It certainly isn't worth it for everyone.
 
steingar said:
Its worth it if it is, and isn't if its not. The OP will know within a few weeks of ownership, if it takes that long. Strangers on the internet certainly can't answer that question.

It certainly isn't worth it for everyone.
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Not only that, sometimes it is and you own, sometimes it isn't and you don't. You aren't having a child.
 
I bought my first plane at 29 and just upgraded to a newer one this year at 37. Couldn't imagine life without owning an airplane now. I used to do hundreds of thousands of miles on the airline and now it's 1-2 trips a year.

That said, my personal guideline is to never have more than 10% of my net worth in toys (cars+plane in my case) for all the reasons you have stated, I want 90% of my net worth working for me, or at least not depreciating. Of course, this is a sliding scale, if I was a billionaire, I could probably allocate more than 10% but ironically wouldn't need to because $100M buys a lot of airplane!
 
RudyP said:
I bought my first plane at 29 and just upgraded to a newer one this year at 37. Couldn't imagine life without owning an airplane now. I used to do hundreds of thousands of miles on the airline and now it's 1-2 trips a year.

That said, my personal guideline is to never have more than 10% of my net worth in toys (cars+plane in my case) for all the reasons you have stated, I want 90% of my net worth working for me, or at least not depreciating. Of course, this is a sliding scale, if I was a billionaire, I could probably allocate more than 10% but ironically wouldn't need to because $100M buys a lot of airplane!
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When you're a billionaire, your plane is typically at the lower end of your expenses list. The yachts use far more, and both are dwarfed by the costs of keeping villas and private islands around the globe. The "other half" live very well indeed, however they ain't half, which is why they are in trouble now.
 
Why not live a balanced life.



Rent your flying now and invest for the future.



You are still flying and building wealth at the same time. WIN WIN!!!
 
Henning said:
Not unless you have a job for it it's not. Maybe once you know the market and buy one of the planes that hold value due to commercial capability or cool/collector factor, you can have one that hedges inflation, or if you are an A&P/IA you can also invest your time and make some money. But in general, a GA plane is a Liability, not an Asset.

What a plane is is a time machine, there is why they bring the money they do, it sure isn't their complexity. Also it the most enjoyable way I have found to travel, but what really gets me to spend the money is the view. The view from a GA plane is magnificent.
Click to expand...

I disagree if you buy right you should be able to get your money back and then some.
I bought a RV8 for 63k flew it for 400 hours invested 12k in avionics and sold it for 90k, how is that not an Asset?
My 10 will be the same story.
 
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