Talk me out of this.

Mafoo said:
If one has $50,000 in loans, and comes into $50,000 dollars, and choses not to apply that money to the loan, and pay cash for a toy instead, that is no different then paying off the loan and getting a $50,000 loan on a toy.

If you are in dept to anyone for anything, and buy a toy, you chose to borrow money for it.

Not saying it's the wrong thing to do, just disagree with your statement.
Click to expand...
I can see your point, but I don't agree with it.

Perhaps I should have been more specific; if you're a real nit-picker, I don't incur any new debt for toys. The only real debt that I have right now is the mortgage. The car loan is my own money, just shuffling it around to suit my priorities. I'm comfortable with keeping the mortgage until it's paid off in a few years.

In the end, though, I think we just see this differently. Paying cash for something when you still have an existing debt may not be the most advantageous thing you can do, but it's not borrowing money to pay for a toy.
 
It's your money. What you do with it doesn't need to make sense to anyone else. :D
 
They buy the cheap PS-58 table coverage and don't invest the money that they "saved" by foregoing the whole life premium. I'm not advocating whole life as an investment, simply noting that the "I can invest the difference" doesn't happen and no increase in net worth occurs.

LandSickness said:
Why do you classify "Buy term and invest the difference" as a trick? You buy only the insurance that will replace your income and the rest goes to grow your net worth. Compared to some of the whole life and universal life cash value products out there, term is the better way to go. And what made investing the difference difficult? I'm not arguing your point, I'm just curious what you mean.
Click to expand...
 
wabower said:
They buy the cheap PS-58 table coverage and don't invest the money that they "saved" by foregoing the whole life premium. I'm not advocating whole life as an investment, simply noting that the "I can invest the difference" doesn't happen and no increase in net worth occurs.
Click to expand...


Can I summarize a different way?

Whole life is a ****ty investement. But a ****ty investment is better than blowing the money on other random crap instead of investing it.
 
DaleB said:
In the end, though, I think we just see this differently. Paying cash for something when you still have an existing debt may not be the most advantageous thing you can do, but it's not [/SIZE]borrowing money to pay for a toy.
Click to expand...

Correct. It's continuing to borrow money so you can buy a toy.

I guess there is a slight difference. And again, there is no judgement in my statement. I personally see no issue with borrowing money to buy a toy.
 
I'm making progress toward making the garage into a usable work space. The floor has been prepped and epoxy painted - 2/3 of it, I'm having to jockey crap around since I can't just leave everything in teh driveway for a week. Tons of cleaning and organizing done. Old compressor given to my son, and my darling wife got me a new, quieter, higher flow rate one for my birthday. Wash tub going in tomorrow, I hope... we'll see what the plumber finds. In a couple of weeks it will be pretty much done; then I can see if it can be made workable through the winter with a simple kerosene heater or not. I've finished up a few long-languishing projects in the mean time, and have a few more to go. Little refinishing stuff, that sort of thing. It's been a big plus all the way around.

I think my lovely bride is getting used to the idea of building. We had a brief discussion this afternoon about the order of big projects. We're about to completely gut and remodel the master bath, and I know she wants the same done to the kitchen. I told her we'd do bathroom, airplane, kitchen. I can see the potential for a never ending stream of projects taking precedence. We'll just have to work on the order in which things get done. I'm not too concerned... waiting a year won't cause any major heartache. It's more time to research, learn, help others build, fly, build time, maybe work on an instrument rating.
 
DaleB said:
I think my lovely bride is getting used to the idea of building. We had a brief discussion this afternoon about the order of big projects. We're about to completely gut and remodel the master bath, and I know she wants the same done to the kitchen. I told her we'd do bathroom, airplane, kitchen. I can see the potential for a never ending stream of projects taking precedence. We'll just have to work on the order in which things get done. I'm not too concerned... waiting a year won't cause any major heartache. It's more time to research, learn, help others build, fly, build time, maybe work on an instrument rating.
Click to expand...
Hang some pics of places you guys want to fly to on the garage wall. Make a list. Ours is on the fridge. We always look forward to that next trip, no matter how small. I would save the ifr rating for when your plane is complete.
 
She still wants to do the long trips on the motorcycle. Problem is, now that she's working 4 days a week, we don't seem to be able to take the time to do that. This year the bike has largely sat in the garage - admittedly much of that was due to my flight training. But, when we did take a vacation we drove so we could do it in one day each way instead of two.

I have, however, made sure that every time she wants to take a trip -- I tell her how long it will take to ride, how long to drive, how long to take the 172, and how long it would be in an RV. I think it's starting to sink in. :)
 
In my fully loaded RV-10 at 12,500', 30-40F LOP, 10.5 gph, 160 ktas. Add 1.0 gph down at 4500'. Add 3.0 gph for ROP and 170 ktas. I love my RV!
 
Mafoo said:
Not only will the trip in the RV take less time, it will cost you a lot less as well.
Click to expand...
Oh, heck yeah. I figure the cost per hour to fly will be a little over half renting the club's 172. That would make the cost per trip way lower.
RV10flyer said:
In my fully loaded RV-10 at 12,500', 30-40F LOP, 10.5 gph, 160 ktas. Add 1.0 gph down at 4500'. Add 3.0 gph for ROP and 170 ktas. I love my RV!
Click to expand...
That's pretty good for that big honkin' 540. Are you running Gami injectors? What about ignition? I'm still thinking the -10 is a little out of my budget range, but it sure would be nice to have the extra seats and cargo space.
 
RV10flyer said:
In my fully loaded RV-10 at 12,500', 30-40F LOP, 10.5 gph, 160 ktas. Add 1.0 gph down at 4500'. Add 3.0 gph for ROP and 170 ktas. I love my RV!
Click to expand...

Not to mention the -10 is probably the most comfortable cabin I have ever flown in - front AND back seats.
 
No GAMI's. GAMI's may get your spread at less than .5 gph at one specific power setting, but can also make your engine run rough at other power settings. Mine has about a 1.0 gph spread. I may try it next year, but not a big priority right now. I am running std mags. I was running all massive electrode plugs, but now fine wires on bottom. Thinking about changing top ones too. It gets better combustion efficiency with fine wire, runs more LOP before getting rough. The more unnecessary mods just add cost, time and complexity- hence the reason many take 6-10 years to build. Keep it simple. Easier when something goes wrong.
 
DaleB said:
Oh, heck yeah. I figure the cost per hour to fly will be a little over half renting the club's 172. That would make the cost per trip way lower.

That's pretty good for that big honkin' 540. Are you running Gami injectors? What about ignition? I'm still thinking the -10 is a little out of my budget range, but it sure would be nice to have the extra seats and cargo space.
Click to expand...

By the time you factor in hangar, insurance, maintenance, and upgrade funds I highly doubt the cost of operating the RV will be half of the club's 172. Hell even my Flybaby probably isn't half.
 
If I wanted to rent the 172S, which would barely haul the four of us, let alone baggage. Cruise at 120 ktas. It would cost more than what I am paying for 90-100 hrs in my RV-10. One reason is the 3 hr minimum per day.

Now try a Bonanza rental and I am way ahead.

Well, until you factor in a new one cost $160-180K. Of course I could sell it at anytime for $140K. You have nothing when you rent but a headache everytime you want to go anywhere. Broke this or that. You want to schedule it how long?

Like everyone says for family haulers...local flying less than 50 hrs/year, just rent.
 
RV10flyer said:
If I wanted to rent the 172S, which would barely haul the four of us, let alone baggage. Cruise at 120 ktas. It would cost more than what I am paying for 90-100 hrs in my RV-10. One reason is the 3 hr minimum per day.

Now try a Bonanza rental and I am way ahead.

Well, until you factor in a new one cost $160-180K. Of course I could sell it at anytime for $140K. You have nothing when you rent but a headache everytime you want to go anywhere. Broke this or that. You want to schedule it how long?

Like everyone says for family haulers...local flying less than 50 hrs/year, just rent.
Click to expand...
So you're saying a few hours of rental costs more than 100 hours in your RV-10?
 
jesse said:
So you're saying a few hours of rental costs more than 100 hours in your RV-10?
Click to expand...

I think he is saying the cost of ownership on his RV 10 is made up in 90-100 hours vs renting a 172S.
 
RV10flyer said:
No GAMI's. GAMI's may get your spread at less than .5 gph at one specific power setting, but can also make your engine run rough at other power settings. Mine has about a 1.0 gph spread. I may try it next year, but not a big priority right now. I am running std mags. I was running all massive electrode plugs, but now fine wires on bottom. Thinking about changing top ones too. It gets better combustion efficiency with fine wire, runs more LOP before getting rough. The more unnecessary mods just add cost, time and complexity- hence the reason many take 6-10 years to build. Keep it simple. Easier when something goes wrong.
Click to expand...

No need for expensive GAMI's. Airflow Performance has tunable injectors. My IO 360 with AFP fuel injection and AeroSport Power flow ported cylinders is really smooth at all RPMs. Cylinder head temps run within 10* from high to low and the Chts the same. It runs .2 gph spread. Don
 
yakdriver said:
No need for expensive GAMI's. Airflow Performance has tunable injectors. My IO 360 with AFP fuel injection and AeroSport Power flow ported cylinders is really smooth at all RPMs. Cylinder head temps run within 10* from high to low and the Chts the same. It runs .2 gph spread. Don
Click to expand...

I think I will do that this winter. I can always switch back if it is worse. I am hoping for .3-.5 gph. We just been having too much fun in it and also putting away my nuts for the winter. HVAC is up and down.
 
Mafoo said:
I think he is saying the cost of ownership on his RV 10 is made up in 90-100 hours vs renting a 172S.
Click to expand...

Yep, that is what I figured after hangar, insurance, maintenance and fuel. I also still had renters insurance which can be $500-$1000.

I finally got the house paid for then basically I am flying another house now. It is worth every penny and build time.

I think renting is a great way to learn for the first 200 hours then insurance will be less and we know a little more about flying/caring for a plane.
 
Mafoo said:
I think he is saying the cost of ownership on his RV 10 is made up in 90-100 hours vs renting a 172S.
Click to expand...

That would be pretty amazing for me unless the 172 is totally over priced. A privately single owner RV-10 simply will cost more to operate then a rental 172 flying a lot. So then the next question is how much margin does the rental company add?

I suspect your numbers are off...or you don't track things 100%

My experimental Fly Baby isn't a hell of a lot cheaper than a rental 150. If at all.
 
Hangar= $150 X 12= $1800
Fuel 100 hrs X 12 gph X $6= $7200
Insurance= $2200
Owner Maint/Condition Insp=$1000

Total= $12,200 or $122/Hr. For RV-10
Does not include eng/prop ovhl or break-
downs(add another $2000), but still only $14,200.

Rental 172S= $140/Hr + $700 Renters
Insur. for 100 Hrs= $14,700.
 
RV10flyer said:
Hangar= $150 X 12= $1800
Fuel 100 hrs X 12 gph X $6= $7200
Insurance= $2200
Owner Maint/Condition Insp=$1000

Total= $12,200 or $122/Hr. For RV-10
Does not include eng/prop ovhl or break-
downs(add another $2000), but still only $14,200.

Rental 172S= $140/Hr + $700 Renters
Insur. for 100 Hrs= $14,700.
Click to expand...

Your numbers that rev don't include any maint, parts, or as you showed engine or prop... So you may be able to do it this year, but not sub stained over time.
 
See $2000/yr that I included. I am still $500 less than 172S rental. I do as much of the work as possible myself. I am also an A&P, which does not make a big difference with Exp. Don't get me wrong, I really liked the 172 and glad rentals were available to get me into the -10.
 
RV10flyer said:
Hangar= $150 X 12= $1800
Fuel 100 hrs X 12 gph X $6= $7200
Insurance= $2200
Owner Maint/Condition Insp=$1000

Total= $12,200 or $122/Hr. For RV-10
Does not include eng/prop ovhl or break-
downs(add another $2000), but still only $14,200.

Rental 172S= $140/Hr + $700 Renters
Insur. for 100 Hrs= $14,700.
Click to expand...

I don't think your $20/hr will cover all the random repairs over the life of the engine PLUS the new engine plus avionics and interior upgrades, tires, brakes, oil, oil filters, air filters, blah blah blah...it all adds up.
 
But the fact that a 160 knot 4-person airplane, wholly owned and available whenever you want it for as long as you want it, is even remotely close to the cost of renting a 172... that's pretty remarkable.

Now lose two seats and two cylinders. Do the same figuring with an O320-powered RV-9, burning less than 8 GPH for the same speed. The -7 I rode in was burning about 7.5 at 170kt, and we were down around 5-7K MSL. I found that pretty appealing.

I was kind of planning to start an empennage this winter, but have decided to put it off for a while. There are things I want to get finished first, and I know once I start on it I'll get too wrapped up and things will slide. I'll wait for the full story on the RV-14, and see if the -10 looks any more do-able a year from now. In the mean time I'll start work on an instrument rating, and pick up a couple of endorsements along the way.
 
jesse said:
I don't think your $20/hr will cover all the random repairs over the life of the engine PLUS the new engine plus avionics and interior upgrades, tires, brakes, oil, oil filters, air filters, blah blah blah...it all adds up.
Click to expand...

Not to mention that other little nagging cost. You know, PURCHASE. Either in money or time...there is a lot tied up into getting it to the point that its sitting in the hangar. Comparing the operating costs of an owned airplane to renting without factoring in reserves or purchase price is slightly farcical.

I'm all for owning and understand the intangibles. But the comparisons above simply don't hold water. .
 
I think you're making a wise decision.

DaleB said:
But the fact that a 160 knot 4-person airplane, wholly owned and available whenever you want it for as long as you want it, is even remotely close to the cost of renting a 172... that's pretty remarkable.

Now lose two seats and two cylinders. Do the same figuring with an O320-powered RV-9, burning less than 8 GPH for the same speed. The -7 I rode in was burning about 7.5 at 170kt, and we were down around 5-7K MSL. I found that pretty appealing.

I was kind of planning to start an empennage this winter, but have decided to put it off for a while. There are things I want to get finished first, and I know once I start on it I'll get too wrapped up and things will slide. I'll wait for the full story on the RV-14, and see if the -10 looks any more do-able a year from now. In the mean time I'll start work on an instrument rating, and pick up a couple of endorsements along the way.
Click to expand...
 
RV10flyer said:
Hangar= $150 X 12= $1800
Fuel 100 hrs X 12 gph X $6= $7200
Insurance= $2200
Owner Maint/Condition Insp=$1000

Total= $12,200 or $122/Hr. For RV-10
Does not include eng/prop ovhl or break-
downs(add another $2000), but still only $14,200.

Rental 172S= $140/Hr + $700 Renters
Insur. for 100 Hrs= $14,700.
Click to expand...
Where is the opportunity cost of capital?
Depreciation cost of the aircraft?
Think WHOLE LIFECYCLE. You're stuck in thinking "cash outgo".
 
So says the guy with a twin. :)

Bruce, I hear what you're saying... but in the cold hard light of a brutally honest economic examination, nearly all of us are wasting money by flying at all. I just "wasted" thousands of dollars getting training so I could get a license, and every dime I spend on pleasure flying could instead be paid on my mortgage or socked away for retirement... when I could sit around and wish I'd leaned to fly. We can nearly always get where we're going cheaper by car, motorcycle or commercial airline. If you want to waste money on a hobby, stamp collecting or even golf can be a lot less expensive.

I look at it this way. Any time, money, and effort spent building is to make me happy. Pride of ownership is hard to put a dollar figure on -- especially if you don't keep track for fear of someone finding out the total. :) The fact that I would be able, once finished, to travel for a lower incremental cost per mile/hour/trip than an old, shared, not-as-well-equipped alternative is just gravy. If I'm going to have to spend X dollars to be able to fly at Y knots, I think I'd prefer to do it in a new airplane, and one I can choose to maintain, repair and upgrade with minimal hassle, expense and paperwork.
 
Whether you're wasting or investing money is nigh-on impossible to determine at the time you're being trained. Being qualified to so something you couldn't do before can be beneficial in ways you didn't contemplate at the time. It happened here, and was a game-changer in terms of my ability to continue to grow a business simply because I could get where I needed to be when the airlines stopped going there.

DaleB said:
So says the guy with a twin. :)

Bruce, I hear what you're saying... but in the cold hard light of a brutally honest economic examination, nearly all of us are wasting money by flying at all. I just "wasted" thousands of dollars getting training so I could get a license, and every dime I spend on pleasure flying could instead be paid on my mortgage or socked away for retirement... when I could sit around and wish I'd leaned to fly. We can nearly always get where we're going cheaper by car, motorcycle or commercial airline. If you want to waste money on a hobby, stamp collecting or even golf can be a lot less expensive.

I look at it this way. Any time, money, and effort spent building is to make me happy. Pride of ownership is hard to put a dollar figure on -- especially if you don't keep track for fear of someone finding out the total. :) The fact that I would be able, once finished, to travel for a lower incremental cost per mile/hour/trip than an old, shared, not-as-well-equipped alternative is just gravy. If I'm going to have to spend X dollars to be able to fly at Y knots, I think I'd prefer to do it in a new airplane, and one I can choose to maintain, repair and upgrade with minimal hassle, expense and paperwork.
Click to expand...
 
wabower said:
Whether you're wasting or investing money is nigh-on impossible to determine at the time you're being trained. Being qualified to so something you couldn't do before can be beneficial in ways you didn't contemplate at the time. It happened here, and was a game-changer in terms of my ability to continue to grow a business simply because I could get where I needed to be when the airlines stopped going there.
Click to expand...
Granted. Everything I wrote, as it applies to my own situation, assumes that I would not expand my existing business into producing widgets of some sort for the experimental aircraft market... that could change the equation quite a bit.
 
bbchien said:
Where is the opportunity cost of capital?
Depreciation cost of the aircraft?
Think WHOLE LIFECYCLE. You're stuck in thinking "cash outgo".
Click to expand...

What about the missed opportunity cost of not owning an airplane?

If you can afford it, the rest is irrelevent.
 
If you're a newly minted pilot then the home building fantasy is a natural progression. Buy the AeroCafter magazine and page through it until it is completely dogeared and you've memorized every page and every contraption including the strap on helicopter.

Then decide to "wait awhile" - it will pass

You've already been given sage advice here - build an airplane only if building an airplane is what you REALLY want to do - no other reason is valid. Don't let yourself be convinced that building will somehow be financially beneficial, don't believe the advertised hours to completion, don't even imagine that you will have an airplane for the published kit costs in two years time.

My advise for now would be to continue renting but modify your attitude about it. With renting you are limited in adventures but are not tied to a specific airplane. So you can check out in a Piper, or a Cirrus or a Citabria. You could get a float plane rating, an instrument rating, try out aerobatics.

It'll take you a couple of years to get bored and by then you will have a clearer idea of what you really want to do with this flying thing.
 
If you do it can be life changing wonderful. RV is a great choice too with the support and quality you'll be buying into. One of the favorite parts of my life is perfecting my plane even now after it's completely built. The advice every successful homebuilder will give you though is that you have to love the build as much as or more than the flying. As with much about our hobby this is not entirely about money or even logic.

Think back to your earliest experience playing with legos or erector sets or whatever they had when you were growing up. I recently spent 20 hours installing medeco locks getting everything fluid perfect in their installation and operation. Before that 20 hours installing HID lights with custom made oval quartz lenses. It helps to be a little crazy. However, that pure child-like joy of hours spent building is something you can rediscover but only if it's somewhere inside you to begin with.
 
milestogo said:
If you do it can be life changing wonderful. RV is a great choice too with the support and quality you'll be buying into. One of the favorite parts of my life is perfecting my plane even now after it's completely built. The advice every successful homebuilder will give you though is that you have to love the build as much as or more than the flying. As with much about our hobby this is not entirely about money or even logic.

Think back to your earliest experience playing with legos or erector sets or whatever they had when you were growing up. I recently spent 20 hours installing medeco locks getting everything fluid perfect in their installation and operation. Before that 20 hours installing HID lights with custom made oval quartz lenses. It helps to be a little crazy. However, that pure child-like joy of hours spent building is something you can rediscover but only if it's somewhere inside you to begin with.
Click to expand...

Great post.

I am one who wants to fly an RV, but have no desire to build one. It's crazy how many people have spent thousands of hours building there aircraft, who only have 300TT on it, and advertise it for sale, so they can build another one.

If building is a passion, great. If not, I can't see how one would make it through the process without hating life while doing it.
 
Conversely, I had no preconceived notions about building until I helped another guy do it for a few weekends. No mas.

milestogo said:
If you do it can be life changing wonderful. RV is a great choice too with the support and quality you'll be buying into. One of the favorite parts of my life is perfecting my plane even now after it's completely built. The advice every successful homebuilder will give you though is that you have to love the build as much as or more than the flying. As with much about our hobby this is not entirely about money or even logic.

Think back to your earliest experience playing with legos or erector sets or whatever they had when you were growing up. I recently spent 20 hours installing medeco locks getting everything fluid perfect in their installation and operation. Before that 20 hours installing HID lights with custom made oval quartz lenses. It helps to be a little crazy. However, that pure child-like joy of hours spent building is something you can rediscover but only if it's somewhere inside you to begin with.
Click to expand...
 
wabower said:
Conversely, I had no preconceived notions about building until I helped another guy do it for a few weekends. No mas.
Click to expand...
I once got frustrated building a wooden model and threw it in the fireplace. I'm sure I wouldn't have the patience or meticulousness necessary to build anything I would get in and fly.
 
DaleB said:
In my case... I have the money in the bank to pay off both car loans. I don't want to do that, because I want the savings there if I should suddenly become unemployed (or some other disaster). I'm paying the bank between 5 and 6 percent.

The 401(k) loan "costs" me less interest, and all of the principal and interest goes into my own account. I take my own sweet time paying it off, knowing I'm keeping the money anyway. In the mean time, I've lowered my car payments by an aggregate $300 per month... which I plop down ads (more) extra principal payments on my house, saving even more in interest. In reality: I get clear title to both vehicles, my interest rate is zero, and I've just guaranteed a 5%+ rate of return (though no higher than that) on a small part of my retirement account.

All the while, I'm still contributing to my plan, still getting employer matching funds, nothing changed there. In the event of a disaster, yeah, there's risk -- theoretically I might have to empty the bank account within 90 days. If I'm unemployed for longer than that, things will get tight.

My ace in the hole is this: My company will not just dump me without a fair amount of warning, and "displaced" workers almost always get a nice parting gift - in my case it would probably a few months' salary. So let's assume tomorrow morning I get a phone call from my manager and find out I'm on my last few weeks of employment. The instant I hang up the phone, my next call will be to secure a home equity loan - to pay off the 401(k) loan, of course. Hey, I'm still employed. I'll still be paying less than the original car loans, and I don't have to drain our savings.

If you do it right, and within a fairly limited set of parameters, there's very little risk and no down side. I still would not recommend a 401(k) loan under normal circumstances, though. It can indeed be a ticking time bomb if you don't know exactly what you're doing.

So what's this got to do with building an airplane? Everything! I don't borrow money for toys. :)


Meh. You're really only double-taxed on the interest you pay yourself... unless I'm just too slow tonight to figure that out. My tax rate isn't horrible yet anyway; I can live with it.
Click to expand...
Then....I don't understand why you asked the question.....
DaleB said:
Bruce, I hear what you're saying... but in the cold hard light of a brutally honest economic examination, nearly all of us are wasting money by flying at all. I just "wasted" thousands of dollars getting training so I could get a license, and every dime I spend on pleasure flying could instead be paid on my mortgage or socked away for retirement... when I could sit around and wish I'd leaned to fly. We can nearly always get where we're going cheaper by car, motorcycle or commercial airline. If you want to waste money on a hobby, stamp collecting or even golf can be a lot less expensive.

I look at it this way. Any time, money, and effort spent building is to make me happy.
Click to expand...
THEN DO IT :) :) :)
 
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