Originally Posted by Danger Close (Post 2598105)

I think it all comes down to personal preference. The extra flying is the easier route that pays very well. I find myself morr gravitating to stories of what people accomplish outside of the cockpit.

Originally Posted by FullFlaps (Post 2597312)

I'm not a pilot... yet. I recently left Wall Street and just started ground school. I was curious about this thread because I plan to continue my personal investments on the side but also maybe starting an advisory or small RIA / hedge fund on the side if I could.

I have traded or managed real estate, equities and fixed income. My 2 cents:

Real estate is a great asset class for pilots because it offers positive income streams, consistent inflation adjusted yields but most importantly tax incentives for owner operators. You don't have to actively manage for the most part and if you outsource management it's pretty much an absentee business. Do not over lever at this point in the cycle and go for base hits unless you are getting an asset really really really cheap. Put yourself in positive carry scenarios with fundamental upside.

Self Directed IRA's are great but there's also a lot of rules involved and a lot of the custodians are very shady 2 man operations. Go with larger FDIC covered institutions. The larger institutions are very strict with guideline where some of the smaller firms may not be. I just don't want to wake up and read in the Journal or FT that my custodians took all the money and now live in a non-extradition country.

Equities - where we are in the cycle it's hard to get really excited about equities and with rates increasing systemic leverage should decline eventually. Vol is still the best bet in my opinion but you would have to trade it actively, I mean be in front of a screen whenever you are not sleeping, to really take advantage of that trade. Don't mess with Vol ETF's - the rolls make them horrible and never carry well. You're just lighting money on fire and making it rain ashes.

Fixed Income - yields now do not really reflect real risk. BBB new issue at 4.5% still blows my mind. There is still a lot of offshore money coming into the system, just global macro it doesn't look attractive to me.

The above is not an order to buy nor sell securities. The above is not a recommendation to buy or sell securities nor does the above constitute legal nor tax advise. Please confer with a financial advisor or tax advisor before buying or selling any investment.

If you guys had advise for a guy just starting out what would it be?

If you could fly for any airline right now (very subjective question) where and why?

I took a look at some of the earnings reports for the 3 majors. Delta seems to be the most profitable but they have just hired 4,000 pilots over the last few years and I doubt they will need more by the time I get through training and the 1,500 hours and then time at a regional, or am I missing something?

Originally Posted by Gunfighter (Post 2597046)

1. Mega Back Door Roth IRA. You can make an after tax contribution to the Delta plan and convert to a Roth up to 415C limits. If you do this early in the year, the company contribution comes to you as DPSP Cash every paycheck.

Originally Posted by Schwanker (Post 2598558)

Care to elaborate further on this?
What advantages are there to doing it this way?
Steps in the process?

Originally Posted by CoefficientX (Post 2598006)

On the flip side several I know have personally decided a one day green slip quickly off sets the side hustle with far less hastle. They have therefore given up the side hustle.

I agree with the points made about not having all your eggs in one basket. I’ve been furloughed, twice, so I’m well aware the music can stop.

Originally Posted by Gunfighter (Post 2598585)

The advantages are highly dependent on your personal financial situation. DO NOT try this based on reading a few APC posts. At a minimum, spend a couple hours on Bing/Google looking at Backdoor Roth and Mega Backdoor Roth. It is also worth a trip over to the lawyer version of APC https://www.biglawinvestor.com/. It is a forum where highly compensated professionals (lawyers) discuss investing and finances.

My primary purpose is for estate planning, not retirement planning. A Roth account does not have a required minimum distribution like a traditional account does, therefore it is one of the vehicles I'm using for estate transfer. A secondary purpose is for income splitting, so I can access retirement funds without increasing my taxable income via 401K withdrawals. I'm expecting a higher tax bracket in retirement, due to my "side hustle", therefore Roth is advantageous.

I set my deductions set to take 75% of pay into a 401a after tax account until my contribution plus the company 16% hits my 415C annual limit. Every pay cycle, I call Fidelity and move the money from the 401a, into my Roth IRA. It doesn't take long to hit the limit with a good PS check on 2/14. After the 415C limit, the company 16% is paid out as DPSP cash, since they can't contribute into my retirement account. At the point I've hit the 415C limits, I fund a Traditional IRA, convert it to a Roth(currently $5,500) and max out my HSA.

I've placed a high priority on Roth funds, so my approach is fairly aggressive. It also results in no take home pay for the first few months of the year. It can be done in a more balanced manner throughout the year with more of the company 16% flowing into the pretax portion of the 415C limit vs DPSP cash.

DYODD and get real advice from several other sources.

Originally Posted by FlightCrewTools (Post 2598645)

This is a good explanation of the process. I’ve been doing this for years on a much less aggressive basis, generally shooting to have a 50:50 ratio of Traditional:Roth money.



The DPSP is unique from many other 401k plans out there, in that Delta contributes a very high % (relative to other US employers), which if done over decades will result in a high balance of traditional (pre-tax) retirement money.



Having a mix of pre-tax and Roth money in retirement, not only lowers your mandatory retirement income due to Required Minimum Distributions at age 70.5, it allows you to manage your tax bracket better by having access to Roth $ for spending (which is after tax and won’t bump you into a higher tax bracket in retirement.)



All of the above theory is based on the un-knowable future wrt tax brackets, politics, national debt (although we do know which way it’s trending), the viability of SS, etc. Given that there is no right answer, I’ve chosen a balanced approach. That may not be the right play for everyone - DYODD.

Originally Posted by tunes (Post 2598649)

Am I doing it wrong? I let them put 16% into traditional 401k and I put 15% into Roth 401k until I hit my max


Sent from my iPhone using Tapatalk