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View Full Version : Time Value of Money


SkyHigh
11-17-2006, 04:32 AM
If you were to invest the cost of your education and flight training (150K) instead in 35 years invested at 7% it would be worth $1,680,939.71

SkyHigh


Illini
11-17-2006, 04:45 AM
You still have to pay tuition, room and board, and other expenses whether you study ecomonics, biology, history, or engineering. So that arguement doesn't hold true. It's almost as if you are promoting not going to college because it's a waste of money.

SkyHigh
11-17-2006, 04:45 AM
If you were to purchase a home with the cost of training and education instead in 30 years you would have an asset that has doubled in value three times, provides excellent write-offs and is producing a monthly rental income that is equivalent of first year FO pay. Most likely by then it will be equivalent to captain pay.

Oh, and lets not forget that you can also live in it.

SkyHigh


SkyHigh
11-17-2006, 04:45 AM
You still have to pay tuition, room and board, and other expenses whether you study ecomonics, biology, history, or engineering. So that arguement doesn't hold true. It's almost as if you are promoting not going to college because it's a waste of money.

Increasingly it seems to be.

SkyHigh

SkyHigh
11-17-2006, 04:48 AM
In any case you will need to earn far more that what the average pilot career can afford to be worth the opportunity costs.


You would be better off to put the money into savings.


SkyHigh

LAfrequentflyer
11-17-2006, 05:18 AM
yada yada yada

Illini
11-17-2006, 05:23 AM
If you were to purchase a home with the cost of training and education instead in 30 years you would have an asset that has doubled in value three times, provides excellent write-offs and is producing a monthly rental income that is equivalent of first year FO pay. Most likely by then it will be equivalent to captain pay.

Oh, and lets not forget that you can also live in it.

SkyHigh


And this money comes from where? Poof! I have 200,000 dollars to buy a house. Wrong, nobody will just give that to you. You have to earn it with payments plus a 20% down payment. And there are very few professions that will allow you to live plus afford morgage payment. Not too many high school graduates plunk down for a home the day after they graduate

Illini
11-17-2006, 05:26 AM
Actually it does. Just an alternative to spending 150K on flight-training.

You can enlist and get the military to pay you to learn a trade / skill. Get all your education paid for and be promoted / rewarded on merit / hard-work. I didn't even graduate from high school. I have a GED.

-LAFF

Edited to remove SH not promoting college. It seems he does seem to think its a waste. I don't feel that way nor should anyone else.


I hope nobody spends 150K on flight training. I will agree with the military as an option if your personality agrees with it. Plus, I think there is a way to enlist and then go to college to get a degree paid for by the military. I'm not opposed to this option either but I believe you are committed to a certain number of years after.

SkyHigh
11-17-2006, 05:35 AM
And this money comes from where? Poof! I have 200,000 dollars to buy a house. Wrong, nobody will just give that to you. You have to earn it with payments plus a 20% down payment. And there are very few professions that will allow you to live plus afford morgage payment. Not too many high school graduates plunk down for a home the day after they graduate

The money must come from someplace. Lets assume it is from a student loan. I am not fully briefed upon the particulars but lets figure %8.9 over 20 years.

The student loan payments would be $1340/mo.

At $6.0 per hour a person could earn 11,520 in a year.

As a CFI a good average is 15K per year minus $16080 per year for debt service is a negative 1080 before you have even subtraced for taxes and living expenses. The loss continues until the hire date at a regional and then for more years until upgrade. Even then you would have to live in poverty for more than a decade to catch up with all the losses.

Buy a house instead.

SkyHigh

I have to go and make breakfast for four sons now.

Later when I have more time I will write a longer post detailing how you will loose money over simply buying a house or investing the money VS a typical airline career.

Illini
11-17-2006, 06:01 AM
At $6.0 per hour a person could earn 11,520 in a year.


Buy a house instead.

SkyHigh

I have to go and make breakfast for four sons now.

Later when I have more time I will write a longer post detailing how you will loose money over simply buying a house or investing the money VS a typical airline career.

So...we'll actually assume 8 dollars an hour. 15,360 a year minus rent...~600 a month, plus a car...(we will assume you bought it in HS with some hard earned money), plus utilities...~120 dollars, plus insurance for that car....~ 80 dollar a month and finally food...~250 a month and we aren't adding clothes, health insurance, or other unforseen expenses and entertainment whatever that may be. Minimum = ~1050 per month. That is a lot for 8 dollars an hour. 15,360-12,600=2760 This is the maximum you are able to save per year. Nobody would be able to save that. You would have to save that for at least 7 to 8 years for the down payment and then after that you would have to be able to make the morgage payments. Now maybe your making 12 an hour after working so hard for that company after 7-8 years. You are now making 23,060 a year. That still won't cover the morgage plus everything else. Furthermore, I forgot that your beater car you saved so much for in High School decided not to run one day and you have to go get a loan for a newer used car. Now you have to either a. use all that money you saved up or b. go get a loan that will be about 400 a month.

End result = go to college and study something you love to do. Yeah, those first couple of years might be rough but it will eventually pay off.

Now I have go back to the couch and watch ESPN on my day off.

LAfrequentflyer
11-17-2006, 06:05 AM
I hope nobody spends 150K on flight training. I will agree with the military as an option if your personality agrees with it. Plus, I think there is a way to enlist and then go to college to get a degree paid for by the military. I'm not opposed to this option either but I believe you are committed to a certain number of years after.

I've never understood the 'personality' aspect of military service.

-LAFF

Illini
11-17-2006, 06:07 AM
I've never understood the 'personality' aspect of military service.

-LAFF

Neither did I but I've heard the arguement before. I think some people can't deal with not being in charge

SkyHigh
11-17-2006, 07:03 AM
So...we'll actually assume 8 dollars an hour. 15,360 a year minus rent...~600 a month, plus a car...(we will assume you bought it in HS with some hard earned money), plus utilities...~120 dollars, plus insurance for that car....~ 80 dollar a month and finally food...~250 a month and we aren't adding clothes, health insurance, or other unforseen expenses and entertainment whatever that may be. Minimum = ~1050 per month. That is a lot for 8 dollars an hour. 15,360-12,600=2760 This is the maximum you are able to save per year. Nobody would be able to save that. You would have to save that for at least 7 to 8 years for the down payment and then after that you would have to be able to make the morgage payments. Now maybe your making 12 an hour after working so hard for that company after 7-8 years. You are now making 23,060 a year. That still won't cover the morgage plus everything else. Furthermore, I forgot that your beater car you saved so much for in High School decided not to run one day and you have to go get a loan for a newer used car. Now you have to either a. use all that money you saved up or b. go get a loan that will be about 400 a month.

End result = go to college and study something you love to do. Yeah, those first couple of years might be rough but it will eventually pay off.

Now I have go back to the couch and watch ESPN on my day off.

I am comparing apples to apples. You keep mixing data in attempts of proving to yourself that you are correct.

What I am saying that if all variables were equal and you were to be given or financed through a loan the amount required for a four year college education and pilot training (150K) you would be much better off (financially) to place the money into a stable investment.

I use minimum wage as a comparison since it is easily attainable and good to use as a baseline. Now if you were to strive for a higher position like union construction worker it would blow the college + aviation option totally out of the water.

My mathematics prove that it is very difficult for a flying career to justify the cost of training and education. At best it will take most of 20 years to reach a break even point. One must expect to be hired on at one of the few remaining good airlines while in their 30's in order to have much hope at all.

It seems to me that most discipline choices one can make in college are financially a loosing proposition. We have a group of friends with whom we socialize with. The poorest of the bunch are the highest educated. The richest owns a small three man asphalt paving company. He never completed high school.

I know that my ideas are old fashioned but when my generation started out we all expected to earn a better incomes than if we had not made the effort. The younger set I understand flies for the simple joy of it. I can not even begin to assess a value to that, but I hope it is worth it to you.

SKyHigh

Illini
11-17-2006, 07:33 AM
http://en.wikipedia.org/wiki/Image:America_Income.jpg

Explain how higher education isn't beneficial? Also, I will give you that in a select number of cases, it is possible for a high school drop out to make more than a college graduate. More often then not, this is not the case as depicted by the graph. How much does you "friend" make per year and how can you associate one case of success with the United States general population?

Sorry you’re so bitter about your career choice but to go and say that higher education isn’t beneficial does not make any sense.

Illini

SkyHigh
11-17-2006, 07:58 AM
http://en.wikipedia.org/wiki/Image:America_Income.jpg

Explain how higher education isn't beneficial? Also, I will give you that in a select number of cases, it is possible for a high school drop out to make more than a college graduate. More often then not, this is not the case as depicted by the graph. How much does you "friend" make per year and how can you associate one case of success with the United States general population?

Sorry you’re so bitter about your career choice but to go and say that higher education isn’t beneficial does not make any sense.

Illini

I will concede to you that the income data supports your position but it fails to tell the entire story.

Those who have made the effort to accomplish a four year degree have the self determination and drive to be a higher achiever than most but it dose not mean that the same education is responsible for the increased income. In fact the majority of self-made millionaires and small business owners have a high school education or less. Of my college friends the most the well off returned to technical labor jobs after failing at their intended fantasy college profession and are now doing very well. The statistics would say that since they are college educated they owe their success to the degree when in fact that is not the case. They owe it to the drive to rise to a higher station in life. A college education set them back by 4 years and nearly 100K.

I believe that college handicaps one for success in life. Most leave after wasting years developing skills like excessive alcohol consumption and copulation with strangers. Success in college ill prepares one for success in the real world. I saw a documentary last month that professed the same ideas. The premise was that the over education of America has lead to a glut of college educated invalids who, in order to save face, will accept an interesting sounding job at a discounted income.

In summary; pay and benifits are going up for someone who knows how to replace a toilet and is decreasing for highly trained professionals like airline pilots.

When we began this discussion it was in regards to careers in aviation. The data you presented was in relation to those with real jobs. A pilot career wouldn't even register on that scale. Given that condition I am sure that your findings will match mine.



SkyHigh

Puppyz
11-17-2006, 08:11 AM
"I believe that college handicaps one for success in life. Most leave after wasting years developing skills like excessive alcohol consumption and copulation with strangers. Success in college ill prepares one for success in the real world."


Sorry but I disagree, those were the best years of my life. The alcohol and copulation was fun and if I had to do it all over again I would. That usually doesn't define the overall college experience, mainly the first year or two. BTW saying that success in college ill prepares one for success in the real world is bullsh!t. Those who succeed in college dont waste the years drinking away. Overall , college grades make more in their lifetime then high school grads. Aviation may be unstable, but having a degree you can fall back is a wise investment. You can lose that house you invested all your money on, property value can drop. Just because you have people living on rent doesn't mean they always pay up, and when they dont it can cost money (legal fees) to get your money back. You can lose your pilots license or medical as well. If you have that college education to fall back on, nobody can ever take that away from you.

SkyHigh
11-17-2006, 03:36 PM
"I believe that college handicaps one for success in life. Most leave after wasting years developing skills like excessive alcohol consumption and copulation with strangers. Success in college ill prepares one for success in the real world."


Sorry but I disagree, those were the best years of my life. The alcohol and copulation was fun and if I had to do it all over again I would. That usually doesn't define the overall college experience, mainly the first year or two. BTW saying that success in college ill prepares one for success in the real world is bullsh!t. Those who succeed in college dont waste the years drinking away. Overall , college grades make more in their lifetime then high school grads. Aviation may be unstable, but having a degree you can fall back is a wise investment. You can lose that house you invested all your money on, property value can drop. Just because you have people living on rent doesn't mean they always pay up, and when they dont it can cost money (legal fees) to get your money back. You can lose your pilots license or medical as well. If you have that college education to fall back on, nobody can ever take that away from you.

You are right they can't take your education away and as far as I know you can't erase a student loan through bankruptcy either. I am glad you enjoyed your four year vacation. I don't know what you studied but I am sure that History or graphic arts degree will come in handy someday. :rolleyes:

A trade is something to fall back on. Degrees fade over time.

SkyHigh

I wish I had my money back.

Pilotpip
11-17-2006, 03:48 PM
A trade is something to fall back on. Degrees fade over time.

SkyHigh

I wish I had my money back.

Tell that to all the machinists, engineers, operators and tradesmen in the auto industry and steel industry that are currently loosing their jobs to overseas intrests faster than anybody in the airlines. Then, tell them that their trade will allow them to find another job.

If that were the case, there wouldn't be so many laid-off factory workers that were in specialized trades going back to school.

Puppyz
11-17-2006, 03:48 PM
You are right they can't take your education away and as far as I know you can't erase a student loan through bankruptcy either. I am glad you enjoyed your four year vacation. I don't know what you studied but I am sure that History or graphic arts degree will come in handy someday. :rolleyes:

A trade is something to fall back on. Degrees fade over time.

SkyHigh

I wish I had my money back.

I'm actually still working on my degree. It is not a 4 year vacation. Everyone should get out once in a while and have fun, that doesn't mean you don't study. I'm studying business admin. College is an experience and a great one at that. You learn a lot and I enjoy that process of learning. If you regret going through that process, then the problem is within yourself. It is what you make of it. It seems like you have nothing but regrets. It sounds more like you are the failure, not the education system. With an attitude like that, you wont get far in any field.

SkyHigh
11-17-2006, 04:10 PM
I'm actually still working on my degree. It is not a 4 year vacation. Everyone should get out once in a while and have fun, that doesn't mean you don't study. I'm studying business admin. College is an experience and a great one at that. You learn a lot and I enjoy that process of learning. If you regret going through that process, then the problem is within yourself. It is what you make of it. It seems like you have nothing but regrets. It sounds more like you are the failure, not the education system. With an attitude like that, you wont get far in any field.

After college I began to ask myself "why is it that my college peers and I are struggling while my high school buddies who went strait to work were all home owners and were doing well". The promises of a college education is mostly a lie when it comes to prosperity. It isn't the education but the determination and capability of the individual that makes the difference.

A college trained mind is full of invisible walls. It is a handicap in my estimation. The skills and rules that comprise a successful student are not the same as what is required to make it big outside of the school system. Throughout my day I took note of all the people who I ran across that have degrees that are not being used for anything.

Believe me it was a bitter pill to discover that as a college grad I was worth less than someone who was willing to preform real work. Our expectations are raised to incredible heights only to be dashed when the reality hits that you are 50K or more in debt to career training that pays less than a mailman.

Today in fact I learned that the guy who shoes my hoses has a masters degree in biology. The next time you are at one of those big book store chains ask the clerk what their degree is in. Most likely a doctor of English is stuffing plastic bags with your purchases at minimum wage.

SkyHigh

SkyHigh
11-17-2006, 04:12 PM
Tell that to all the machinists, engineers, operators and tradesmen in the auto industry and steel industry that are currently loosing their jobs to overseas intrests faster than anybody in the airlines. Then, tell them that their trade will allow them to find another job.

If that were the case, there wouldn't be so many laid-off factory workers that were in specialized trades going back to school.

Those professions are in decline just like pilots. Besides I wouldn't call those trades; Plumber, electrician, heavy equipment drivers are all real trades. You can find a job in almost any town. You will never see an outsourced police officer job.

SKyhigh

vagabond
11-17-2006, 05:35 PM
I'm a lawyer and my pasty looking white guy of a husband is in a Teamster blue collar trade. I am overedumacated and he has a degree in Street Smarts. He makes more money than I do. A lot more. Maybe it's the company I keep, but my Capt. Alaska is doing really well too. Regardless, I am not sorry I spent so much time in school and have so many frames hanging on the walls.

bla bla bla
11-17-2006, 09:49 PM
Times are changing, a degree is not what it once was. Degrees are for employees. It dosen't take a degree to learn how to organize a company and have those with degrees work for you. The hard part is getting the money to invest. Hard, but possible.

palgia841
11-18-2006, 12:52 AM
Skyhigh,

I don't know what job you do, or what business you own, but it sure must be very unsuccessful if you can afford to waste countless hours of your day on this forum, posting utter nonsense, without worrying about opportunity costs......;)

Pilotpip
11-18-2006, 01:47 AM
He just likes to crap in everybody's cornflakes. He's posted his story on here a couple times. Basically he bailed on horizon and went to National with the hopes of fast upgrade. He got burned on it, and now comes on here to tell us how truely "happy" he is being out of the airlines every day and how we're fools for continuing in this industry.

Skyhigh, the trades I listed are specialized trades. The problems you always seem to list about the aviation industry are no different than any other profession. The standard of living for the average American is declining. Management salaries are skyrocketing, yet employee salaries aren't increasing at a rate that can keep up with the likes of inflation, healthcare, etc. The loss of pay, increased hours and reduction of bennefits are commonplace in every workplace today.

MikeInTx
11-18-2006, 05:32 AM
I'm actually still working on my degree. It is not a 4 year vacation. Everyone should get out once in a while and have fun, that doesn't mean you don't study. I'm studying business admin. College is an experience and a great one at that. You learn a lot and I enjoy that process of learning. If you regret going through that process, then the problem is within yourself. It is what you make of it. It seems like you have nothing but regrets. It sounds more like you are the failure, not the education system. With an attitude like that, you wont get far in any field.

He must have missed out on the alcohol consumption and copulation with strangers... :D

ryane946
11-18-2006, 07:38 AM
If you were to invest the cost of your education and flight training (150K) instead in 35 years invested at 7% it would be worth $1,680,939.71

Number one, 150k is way too high. If you spend that much, you are either 1) your parents have too much money to burn, or 2) you went to some incredibly expensive college and FBO. I would say 100k tops, and at least 2/3 of that should be college expenses, not flight training.

That lowers it to about $1,000,000. Now we have to remember that inflation grows at a rate of about 3%+ a year, so that cuts it almost in half again to around $500,000. Divide that over your 40 year career, and you could make $12,500 a year......

Or you can go to college and make a lot more.
I will let you decide on that one.

JMT21
11-18-2006, 09:46 AM
Times are changing, a degree is not what it once was. Degrees are for employees. It dosen't take a degree to learn how to organize a company and have those with degrees work for you. The hard part is getting the money to invest. Hard, but possible.

No balls, no baby: That's what I like to say. It's so true. Most people don't want to cross that line. There's safety on one side, uncertainty on the other. Most people don't take that step. And it's not even so much that they're afraid to take the step; it's that they know deep down that they didn't do the work necessary to be prepared, and that's the big difference. Most people think, Oh, I have a great idea, and the only thing missing is that I don't have the connections, I don't have the access to money. But that's the biggest bunch of bull****. The minute anyone says that to me, I know they're a failure. Because if you're prepared and you know what it takes, it's not a risk. You just have to figure out how to get there. There is always a way to get there.
-Mark Cuban

Now we have to remember that inflation grows at a rate of about 3%+ a year, so that cuts it almost in half again to around $500,000. Divide that over your 40 year career, and you could make $12,500 a year......

You have no clue as to how time value of money works.

SkyHigh
11-18-2006, 01:42 PM
Number one, 150k is way too high. If you spend that much, you are either 1) your parents have too much money to burn, or 2) you went to some incredibly expensive college and FBO. I would say 100k tops, and at least 2/3 of that should be college expenses, not flight training.

That lowers it to about $1,000,000. Now we have to remember that inflation grows at a rate of about 3%+ a year, so that cuts it almost in half again to around $500,000. Divide that over your 40 year career, and you could make $12,500 a year......

Or you can go to college and make a lot more.
I will let you decide on that one.

The end results are that as a pilot you start out 150K in the hole and then launch into a career that pays less than a mailman. Their is little hope of being able to dig yourself out unless you start out earning a very good paycheck.

You are right in 30 years 1 million may not mean all that much, but it is more than you will have than if you had spent a career as a pilot.

SkyHigh

nicholasblonde
11-18-2006, 02:10 PM
where in the hell are you getting this 150K figure??? Anyone who pays that much is stupid enough that they would probably be in poverty anyways, regardless of what they're doing.

Try 35-40K. Now, with a realistic figure like that, how many houses that cost 35-40K are you going to buy? Trailers don't appreciate in value very well last time I checked.Maybe a timeshare in Panama City?

You're also assuming that someone is going to keep paying that loan down over 20 years. If someone gets on with a major, do you think they're going to continue paying interest + principal payments on that flight training loan for 15 years more? Doubt it. If I'm making 60-90K/yr as an FO at a major, you bet your arse I'm paying that entire loan balance off in 12 months. So there goes your comparison to investing that money.

Anyways, your 1.6 million figure doesn't mean crap if you didn't a) have flight training or b) have a college degree that would allow you to get a job and pay for food and utilities for that 35 years. How many banks out there will loan 150K to a high school graduate, even for a home? You're comparison assumes the individual can make ends meet for 35 years to see that money, without having to withdraw anything to pay bills.

The money must come from someplace. Lets assume it is from a student loan. I am not fully briefed upon the particulars but lets figure %8.9 over 20 years.

The student loan payments would be $1340/mo.

At $6.0 per hour a person could earn 11,520 in a year.

As a CFI a good average is 15K per year minus $16080 per year for debt service is a negative 1080 before you have even subtraced for taxes and living expenses. The loss continues until the hire date at a regional and then for more years until upgrade. Even then you would have to live in poverty for more than a decade to catch up with all the losses.

Buy a house instead.

SkyHigh

I have to go and make breakfast for four sons now.

Later when I have more time I will write a longer post detailing how you will loose money over simply buying a house or investing the money VS a typical airline career.

SkyHigh
11-18-2006, 09:01 PM
where in the hell are you getting this 150K figure??? Anyone who pays that much is stupid enough that they would probably be in poverty anyways, regardless of what they're doing.

Try 35-40K. Now, with a realistic figure like that, how many houses that cost 35-40K are you going to buy? Trailers don't appreciate in value very well last time I checked.Maybe a timeshare in Panama City?

You're also assuming that someone is going to keep paying that loan down over 20 years. If someone gets on with a major, do you think they're going to continue paying interest + principal payments on that flight training loan for 15 years more? Doubt it. If I'm making 60-90K/yr as an FO at a major, you bet your arse I'm paying that entire loan balance off in 12 months. So there goes your comparison to investing that money.

Anyways, your 1.6 million figure doesn't mean crap if you didn't a) have flight training or b) have a college degree that would allow you to get a job and pay for food and utilities for that 35 years. How many banks out there will loan 150K to a high school graduate, even for a home? You're comparison assumes the individual can make ends meet for 35 years to see that money, without having to withdraw anything to pay bills.

My 150K estimate comes from the price of four years of state college; tuition, books, room and board plus the cost of flight training through CFII. I haven't even factored in the opportunity cost for the amount a student could have earned if they had spent the years working a full time job instead. In addition several on this forum have mentioned that they carry that much in student loans. One even mentioned 200K.

If one could be relatively assured of making it to a major airline within a few years of graduation these numbers would make better sense. However If you have spent much time on this forum at all you would realise that the odds of reaching a major is slim and getting even slimmer with time. Even if you are one of the lucky ones in the future it is highly likely that you will earn far less than what traditional wages were. The odds are that a new pilot today would spend most of a decade earning less than 45K. The average would be in the range of 25K. Carrying a loan payment of perhaps $1200 to 1600 per month would be devastating.

My entire point of this exercise is to point out that it takes a huge amount of resources to gain at best a modest return. Most likely you would carry the debt well into your 40's.

High education and training costs plus a low probability of earning a significant wage to pay back the loans equals financial disaster. If you were to place the money into a stable investment instead you would be far better off in the long run.


SkyHigh

SkyHigh
11-18-2006, 09:48 PM
I took a few minutes and went to a local state college web site and collected some estimates costs for a four year degree in aviation from a state university.

Tuition and Books for four years $ 28,000

Room and Board for four years 57,600

Flight training through CFII 60,000

Total 145,000

Lets not forget that the average college student takes five years to get through a four year degree and if they are smart will add a minor and that will also add to that number. I can only imagine what a the price would be from ERAU.

A payment on a loan of $145,000 at 12% interest amortised over 20 years is $1596.57. Before taxes you would have to earn $1900 just to make the payment. That is far most than what most CFI's or new hire regional FO's earn.

Each person has a different set of circumstances of where their money is coming from but this is a good measure of what the true price is. Another example would be to pay cash for a house with the 150K and enjoy rent collection and appreciation over the next 35 years. Rent doubles on average every 10 years and real estate appreciates 6% on average every year.

In 35 years the rent collected would be $14,400 per month and your 150K home would be worth $1,152,913.02. Add to that the collected rent over 35 years of $3,276,000 less of course for maintenance vacancies ect....

I am not suggesting that everyone run out and buy a house but it is displays the value of the resources spent in comparison to what is to be gained. It is unlikely that a career in aviation could out preform the cost of its training and education.


SkyHigh

SkyHigh
11-18-2006, 10:13 PM
Here is another even bigger shocker.

$150,000 invested in the stock market over 35 years with an expected annual growth of 12% grows to $7,919,942.94

Save your money.

http://www.tcalc.com/tvwww.dll?User

SkyHigh

kaos
11-19-2006, 01:42 AM
SH
i appreciate your dedication in giving to the people another side of the "moon", even if its the dark side.
i can tell you this, I have one wife and one son (both not working).
my wife spends (so she costs me) about 10K$/yr my son about 5K$/yr.
for a total of 4yrs of marriage plus the son they costed me 60K$.
I will never change the money with my family no matter what ROI i can get.
the reason is simple because i love my family.
I hope you get my point, as a matter of fact what you can do with your money if not spending them for something you love.
so SH if you love to possess a beautiful house...well its up to you.
as well if i love to flying for living...well its up to me.
i think the return of my investment is not only money (actually not at all).
my pay back is the sky over me and the smile of my son.

MikeInTx
11-19-2006, 04:41 AM
SH
i appreciate your dedication in giving to the people another side of the "moon", even if its the dark side.
i can tell you this, I have one wife and one son (both not working).
my wife spends (so she costs me) about 10K$/yr my son about 5K$/yr.
for a total of 4yrs of marriage plus the son they costed me 60K$.
I will never change the money with my family no matter what ROI i can get.
the reason is simple because i love my family.
I hope you get my point, as a matter of fact what you can do with your money if not spending them for something you love.
so SH if you love to possess a beautiful house...well its up to you.
as well if i love to flying for living...well its up to me.
i think the return of my investment is not only money (actually not at all).
my pay back is the sky over me and the smile of my son.

Seriously...what if the person chooses an intrinsically rewarding flying career and debt over a house and money...

I bet if a family member were dying of cancer he would have to whip out the "time value of money" calculator to see if it would be worth paying for treatment or if he would be better off purchasing a new home.

SkyHigh
11-19-2006, 06:37 AM
Kaos, Mike,

You guys both bring up some good points. As pilots we often are making a choice between our families welfare and our own selfish wants. A pilot career is suppose to be satisfying but as with any career it needs to be able to provide enough return to overcome the costs of training and education. If it cannot then it isn't a profession at all but really a working hobby.

Responsible people take these facts into consideration. Everyday adults make choices that have their own better welfare in mind. Aviation is a powerful seductress. I hope that one day you will not be in a position of wishing that you were able to provide better for your family.

When evaluating the value of life and family use your heart. When determining the income potential of a career use mathematics.



SkyHigh

SkyHigh
11-19-2006, 07:08 AM
I realise that this isn't a fun topic for anyone, but it is very important to understand. The retreats made over the past 20 years have made this career choice not a financially viable one anymore.

Things change. Aviation is in decline and will never return to its former glory. In 5 years regional jobs will be aquired through through fancy flight academies. If you have an interest in self preservation you might consider broadening your scope when evaluating this as a career option.

Choose something that is on the upswing like telecommunications or police and fire.

SkyHigh

sigep_nm
11-19-2006, 04:04 PM
This is a discussion that belongs in a career counseling office, not on a forum involving the opinions of PROFESSIONAL PILOTS. WE are for the most part have already arrived at the point in which we cant go back.

Uncle Bose
11-19-2006, 05:21 PM
Wrong. This forum, and especially this section, is also for those considering a pilot career.

SkyHigh
11-19-2006, 07:08 PM
This is a discussion that belongs in a career counseling office, not on a forum involving the opinions of PROFESSIONAL PILOTS. WE are for the most part have already arrived at the point in which we cant go back.


It seems to me that almost a third of the people who frequent this forum are wannabes. Another third are new entrants. Even those who have already bitten the bullet still have the choice not to invest the best years of their life. There is always hope.

SKyHigh

wally24
11-20-2006, 05:45 AM
Skyhigh, you argument lacks one key point.

If you are going to talk "time value of money", then please do it correctly. You have to discount that 1,300,000 figure back to the present value. A dollar today is not worth a dollar tomorrow. In other words, that 1.3 mil is worth a lot less in today's money standards. It depends on the discount rate.

Also, becoming a doctor is a profession that is on the decline. Doctors do not make money until they are around 35, and have an astronomical amount of debt built up. With rising insurance costs, the medical profession is becoming less lucrative. Do the "time value of money" on the student loans for med students.

JMT21
11-20-2006, 08:58 AM
Skyhigh, you argument lacks one key point.

If you are going to talk "time value of money", then please do it correctly. You have to discount that 1,300,000 figure back to the present value. A dollar today is not worth a dollar tomorrow. In other words, that 1.3 mil is worth a lot less in today's money standards. It depends on the discount rate.

Skyhigh is correct. The time value of money is based on the concept that a dollar today is worth more than a dollar tomarrow. If you had a dollar today you can invest it and make some interest, you cannot do that if you don't have a dollar today. The future value of 150k at 6 percent for 35 years is north of 1.6 million.

grandpa
11-20-2006, 09:03 AM
Also, becoming a doctor is a profession that is on the decline. Doctors do not make money until they are around 35, and have an astronomical amount of debt built up. With rising insurance costs, the medical profession is becoming less lucrative. Do the "time value of money" on the student loans for med students.

I can assure you it is NOT on a decline. It depends on what type of doctor you become as far as how much money you will make and when. Yes the debts are higher but the payoff in the end is greater. Residency pay by far beats regional airline pay. The medical field in general is always going to be a very secure choice. Physicial Assistants are making more then they ever did, and that just takes 4 year degree(100K+). Even nurses are making more then most regional captains. There is and always will be a demand for medical professionals now and in the future. You can't really begin to compare pilots to doctors. Yes your training costs are high, but the payoff is very low and not nearly as secure.

by the way, hope you guys like the new avatar ;)

wally24
11-20-2006, 03:08 PM
JMT-
I did make a mistake, my apologies for the typo. A dollar today is worth more than a dollar tommorow.

SkyHigh
11-26-2006, 05:49 PM
Well there you go kids. Taking on a flying career means accepting high education and training costs to revieve low pay and an insecure future. Why the entire prospect is silly really.

I happen to have a friend who at 38 quit flying to become a PA and tomorrow happens to be his first paid day on the job. He will be making over 85K his first year and more than 100K the next. Home every night and can live anywhere and find a job within hours.

There is no comparison. Flying for a living is just plain silly. We all need to grow up and get real jobs. :eek:

Skyhigh

CO777Driver
11-26-2006, 06:36 PM
Skyhigh, you are a real treat. Do you not have anything else to do? ;)

SkyHigh
11-26-2006, 07:17 PM
Skyhigh, you are a real treat. Do you not have anything else to do? ;)

Sure I have lots to do but this is my hobby. Its fun. :)

SkyHigh

favila008
11-26-2006, 09:16 PM
by the way, hope you guys like the new avatar ;)

I really like your avatar, she a real nice looking girl. SEXY. REAL SEXY. :D

NE_Pilot
11-27-2006, 06:39 AM
If you were to invest the cost of your education and flight training (150K) instead in 35 years invested at 7% it would be worth $1,680,939.71

SkyHigh

The biggest fallacy with this, and with what I am assuming it is based off of, is that it assumes you have all that money right now. If you have all that money at age 18, then obviously you have a job or personal business that makes you enough money that you don't have to go school. You are starting off pretty well.

Now realistically you will not have that money at age 18 when you are making a decision on college. I am in college right now, I have scholarships, financial aid, some loans, and am working. So to say well just invest all that money and dont go to school, is easier said than done, because I do not have all that money ready upfront, and I highly doubt that a majority of students have that type of money upfront. I am paying as I go, and that is what most students do. You pay a semester at a time, not all four years upfront.

The whole thing is based on an 18 year old having 150k, which I think is very unrealistic. So the point can be made that yea you would have more money, but you also started off in a position where you have alot of money, since that is 150k of disposable money, spendable cash, aside from the cost of living.

Illini
11-27-2006, 06:47 AM
The biggest fallacy with this, and with what I am assuming it is based off of, is that it assumes you have all that money right now. If you have all that money at age 18, then obviously you have a job or personal business that makes you enough money that you don't have to go school. You are starting off pretty well.

.


Ding Ding........Winner

UND_jesse
01-10-2007, 02:54 PM
[QUOTE=SkyHigh;81756]I will concede to you that the income data supports your position but it fails to tell the entire story.

Those who have made the effort to accomplish a four year degree have the self determination and drive to be a higher achiever than most but it dose not mean that the same education is responsible for the increased income. In fact the majority of self-made millionaires and small business owners have a high school education or less. Of my college friends the most the well off returned to technical labor jobs after failing at their intended fantasy college profession and are now doing very well. The statistics would say that since they are college educated they owe their success to the degree when in fact that is not the case.


SkyHigh[/QUOTE

Come to Alberta, Canada and work in the trades right out of High school. People with a grade 10 eduacation almost clear $90,000. Then you can blow that money after working one year on Clown High's "so called" flight training of 150K.

rambo
01-10-2007, 04:20 PM
I,m one of the plumbers that skyhigh talks about so often. I also have no desire to be a professional pilot but disagree with his opinion on the trade. One of my high school classmates is a chief flight officer for a major cargo carrier in the region I live. The last I heard my CFI I used to get my ppl is now flying for a State Police department, and the father to my childs best friend is the chief pilot for a large corporation. I have talked to all of them about flying and how they got their start. Each of them told me about difficulties getting their start but this major dept he talks about didn't happen with either of them. I know four professional pilots and none have had these major problems. The fourth I didn't mention because he was born into a flying family and had been flying from about the age of 6. He got his flight time and ratings flying family planes.

wannabav8r
01-30-2007, 09:12 AM
I really wish SKYHIGH would stop telling everybody that training cost 150K. He is just so annoying. I hate posting this because I'm such a newbie and I am going to block his posts. Let's have a vote to ban him from this site.