I file jointly with my wife, so we use her as the real estate professional. We also use the 469 election which groups all activities rather than qualifying as a professional for each entity. This captures the losses on the K-1s from our passive investments as well as the companies we operate.

You are right about the interpretation of hours worked for qualifying individually. The most favorable for qualification would be block hours on your Delta timecard. Next most favorable is using pay hours. The worst calculation would come from using duty day. There are also some interesting interpretation possibilities for pilots on reserve. This falls squarely in the category of DYODD and get advice from a tax professional.

I've been reading up on the topic of Acquisition Entrepreneurship. Buy then Build by Walker Diebel is worth a read. Acquira is a company that follows this model with a JV approach for buying a business. The focus is on owning and running a business, not being the business. "Work on your business, not in your business" is a common theme among entrepreneurs who successfully scale.

except I can do better, but for set it and forget it looks good.

My side “hustle” for 2021 was just to enjoy the family and some new hobbies, all of which only lost money. But a steady stream of dollar cost averaging into effortless 401ks (dual income household) and keeping spending under control saw our net worth increase 37.9% and retirement accounts are up 34.5% YOY. I keep wondering if I’m missing out by not actively investing in stocks or other vehicles, but I’m not sure what I’d stop doing to make time for the active monitoring/research that must be required to make all that activity worthwhile.

You’re missing nothing. This is investing. Keep buying and sit on your hands. The more complex, the more models, the more valuations, the more ratios, the worse your investing will do. At least that’s been my experience and observation.

I appreciate the vote of confidence. It can honestly be hard to resist the urge to try to make more. But in the end I don’t see many people at any income level that really appear completely content with their income/investments/net worth. What’s the rate of return or nest egg value that lets one know when to let off the gas? The human rat race seems to be pretty out of control. Anecdotally, I’d say that those with less are more likely to actually feel (or present themselves) content. If Warren Buffett feels the need to keep generating and maximizing cash flow…well…I’m not entirely sure what to do with that.

Astute observations and thoughts. I’m also on this vision quest as well, “how much is enough”. Often people try to boil this down to a single number. For me, that has not worked. So now the question is shifting from “how much” to “what”. I’ll let you know when I reach this moment of clarity. Don’t hold your breath.

Great observation, enjoy that family! This last year has been a tough one for me and everything that's happened has just reiterated to me that I need to enjoy life while I can, time is precious. One of the "ventures" I mentioned above is more about pursuing an avenue that I believe will really help others, which is a passion of mine. If I can monetize it, even better....maybe it will allow me to drop more trips and spend more time with family and/or helping others. Everything else I do to "get ahead" financially, is more about providing some side/passive income should I lose my medical. Plus I really don't want to be doing this gig until I'm 65, so it would be great to have (mostly) passive income built up so that I can easily retire early. Obviously, you have to find that balance that ensures you're not missing out on the moment!

The slow and steady approach of investing in retirement accounts will create a big pile of money. The beauty of a venture into real estate and to a lesser extent, dividend stocks is that it creates income today that buys back time. You don't have to wait for 59 1/2 to start reaping the benefits. Knowing the bills are (partially) paid from a side hustle before you even go to work for the month is much more liberating than having a fat emergency fund.

I spent a majority of 2021 on the vision quest you mentioned and came up with a couple revelations that directed some significant actions. Estimating the longevity of a pile of cash comes with lots of uncertainty. Predicting future rates of return, inflation and calculating a draw down rate you won't outlive is stressful and leads in some cases to overaccumulation. How much becomes an ever-increasing number to deal with the range of uncertainty. Turning that pile of cash into a predictable income stream really helps shift the mind from "how much" to "what".

I’ve had 2, sold both.
First was a margarita recipe my wife and I developed, brought to market and sold to a small restaurant chain.
Second was a small car show (Caffeine and Octane) that turned into the biggest monthly auto gathering in the nation. Sold it to Cox Communications.

Not sure what the next one will be.

I don't think so

My strategy too. Unfortunately or fortunately (depending how you look at it) the check of the month club for me has made me sort of lazy. I contribute max to my stuff here at DAL. The matching is good (could be better though - TED74 for negotiating committee BTW!). I should probably be rolling over that check of the month into some more aggressive investments as play with $$, rather I use it for my "hobbies" all of which are tremendous wastes but provide us with so much well needed relief. Hard to put a $$$ value on that. I'll reconcile that opportunity cost any day.

TVT

Time value of time (away from work)

Sorry for the hijack but I’d like to pick the brains of you regular investors. Yes, I’ve heard not to ask investing advice from pilots but screw it. We know everything, right?

I’m new to investing and am currently playing with a few thousand of fun money until I get some experience. I’m looking for good stocks that I can buy and sell a month or so later (on average) with a decent return. I guess those would be ones with a fairly regular up & down cycle. I’d also like some advice on some good dividend stocks.

The ones I’m currently playing with are TSLA, MA, NVDA, AMD, AMZN, & ZM. I also dabble a bit in BTC.

Also, I’m currently using the cash app for my trading as fees are very low (except BTC) and I can do stocks and BTC on one platform. Are there other options I should look into?

Yes. Park your money in an S&P500 or Target date fund and thank me in 30 years.

You aren’t investing, you are trading. You’re going to get killed but since it isn’t a lot of money look at it as tuition. I did the same and it eventually led me down the simple path towards low-cost, long term investing.

Good luck.

Over the last 30 years I flew with lots of financial experts and traders who were making a fortune as they told about their success. Strangely they only appeared during sustained strong markets and completely disappeared in down or neutral markets. The above is great advice and if you have some extra cash put it into real estate.

No pain, no gain. Day Trading requires a lot of study, practice and patience. I spend most of 2020 trying to get into it, and it was successful when I gave it time.
You're much better off following the advice above and parking your spare cash in an ETF.
Otherwise be like Buffett and pick a couple dozen solid companies that you know will be there in 50 years. I bought F (Ford) on August 4th, 2020 for $6.75 and today it's trading at $21.56. That's a 220% gain.

I’d like to thank whoever told me to buy and read The Simple Path to Wealth.

Great read, very simplistic, and makes perfect sense.

Cheers!

Thanks for the recommendation. It was a quick read, easily digestible and a great foundation for financial responsibility. It follows a parallel path to the Dave Ramsey program without the marketing hype and fee laden mutual funds. It should be required reading in high school and revisited upon entry into the workforce.

In Part 1, Chapter 1 he does a great job of covering the burden of debt and quickly dismisses business debt as being out of the scope of the book. After understanding and applying the basics in the book, I would suggest that learning and using business debt properly can be an excellent source of expanded financial freedom and security. Borrowing money to buy a stream of cash flow puts the power of inflation on your side not against you. The loan balance is fixed in today's dollars, while the acquired stream of cash rises with inflation. The ratio of leverage is your inflation multiplier. Understanding which debt, how to use it and what to buy would be a good Vol 2 for this book.

Augusta Rule
 

The Masters is approaching, which is a good reminder of this little tax gem.

IRS Section 280A (aka The Augusta Rule) allows 14 days of tax free rental income of your residence. You can rent it to guests or rent it to your business. As a business owner, I am renting out the house for a weeklong planning meeting. For non business owners, you can rent it out on AirBNB or equivalent up to 14 days, if you go over by even 1 day it all becomes taxable income.

There are several potential gotchas on this one, so please DYODD, get competent advice or at a minimum LMGTFY

Augusta Rule: Loophole for Tax-Free Rental Income (corvee.com)
The Augusta Rule - Tax Free Rental Income | HLB Gross Collins
What They Don’t Tell You About the Augusta Rule That Can Cost You Big-Time | USTaxAid

Happy Side Hustling...

Score. Thanks!

Interested in being a mortgage loan officer on the side. Can get lucrative in combo with this job. Anytime have first hand experience or know someone that does?

I know several Delta pilots who have done it, but don't have any firsthand experience. The one I talked with the most about his mortgage business seemed to be happy with the workload and extra income.

Are you concerned about the recent decline in mortgage originations? It seems like the next year or two may be a bumpy ride for new mortgages.

I agree, things are definitely slowing down. I was thinking more long term about getting into the field for some nice part time side income.

Great attitude! Learning now while the markets may be a little slow will set you up nicely for when things get busy again. Based on a few layover and cockpit conversations it sounds like it is compatible with Delta and provides a good side income. It may be worth a look at the commercial lending side as well. Business owners and CRE investors don't require as much hand holding as home buyers, so the lack of immediate phone contact while working at Delta may be less of an issue.

Just curious. Is anyone playing options with airline stocks these days? Seems like there’s some upside with the pent up travel demand but also the downside risk of higher fuel prices and inflation. So a mixed bag of volatility. What do the pros think? (Yes I know, there are no pros on these boards, dyodd etc)

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The key word is "play". A safer way to play options is with covered call ETFs like XYLD and RYLD. You miss the big hits and dopamine rush that comes from naked calls, but for the slow & steady investors like me, the monthly distributions are fine.

Just beware that DAL has rules against shorting or holding options of DAL if your employer is DAL. How they'd find out, I have no clue. I actually think it'd be a great insurance plan to have long term puts on the company I work for, but that's not an *option* here.

is that a DAL rule or something like an SEC rule? I have not heard of this one so I would be curious to read more on it.

it is a Delta policy. Search "insider trading" on deltanet and its the first link to come up. You want paragraph 3.

thanks

filler

I dumped all my Delta stock about a decade ago and invested in oil. It was close to a long term put on DAL. I'll let the stock market experts and technical traders comment on the correlation between DAL and XOM. In general anything above a cursory investment in a company you work for, but don't control is too much skin in the game.

I do this on the side. Recommend mortgage educators for your pre-licensing and then you’re gonna need a really good mentor to show you the ropes of the shop you work at.

It’s never a bad time in the mortgage biz. The last couple of years it’s been refi central. Now it’s high $$$ purchases with even higher rates. Next will come short sales and foreclosures dealing directly with banks. Cycle is never ending. The industry is full of scum, so if you’re honest and professional with people you will see great success. All it takes is a loan or two, and your referral business will keep bringing them in. Also, it’s very helpful if you know or can get to know some realtors. Tons of strategies to be successful doing it.

My only caution to you: if you think red tape in this industry is bad. The mortgage industry is FAAx100.

Thank you for the great info. Mind if I pm you?

No problem man!

Does Delta allow their pilots to do contract flying for a previous Part 91 employer?

In response to iaflyer's question in the "It Passed" thread:

Personally I searched mainly in the town I live in. I peeked at other cities, but realized that I had no idea what I was looking at. I didn't know the neighborhoods. It wouldn't necessarily be bad to look outside of your local area, but it does require a lot more work just to understand what that market is like.

As far as purchasing a property with or without tenants, it depends. If you are looking for immediate cash flow, you would need tenants in place. However, you may be interested in redevelopment, in which case you would want a completely vacant property. In the case of my current property, I bought it 65% occupied because I got it for a lower price, hoping that someday I would be able to fill it up (which I did) and sell it for a massive profit:

Property value=NOI/Cap Rate

Maybe you find an apartment building that you want to renovate so you can attract higher quality tenants and raise the rent thus increasing NOI. You can do that over time as tenants move out.

It all depends on what your game plan is. Remember, you make your money when you buy the property. So make sure the property you buy aligns with your exit strategy.

Self managed properties have all been within an hour. Syndications are nationwide, which creates tax return obligations in multiple states. My NNN property is within an hour, but that was not a requirement.

I know single family investors from non desirable rental states like CA who buy in other states where investments make sense such as TX.They bought using vetted single family investment brokers, then used referrals to find a GC to do the rehab work and leasing agent to show the property. Some also hired a property manager, others self manage via cell phone and an online portal like Rently or tenant.cloud.

As your knowledge and experience grow, out of area investing becomes less risky. Doing so with a network of other investors also helps. In my case out of state syndications were part of a diversification plan that also reduced my role.in the success of the business. I've considered some out of area direct owned real estate, but have found enough within my area to work with.

A single family with a tenant in place is risky if the previous landlord didn't screen them properly. A multi tenant property comes with some risk as well. In the case of my first storage facility, there was enough in place income to cover the expenses and debt service with about $1000 of monthly cash flow.

Immediate cash flow was a requirement on my houses and first commercial property because I had limited resources. As investment cash flow grows and wealth compounds vacant or low occupancy isn't as risky IF it's due to poor management or property condition. Knowing the submarket is essential for value add or development

Investing in your knowledge and networking will save money and speed up the process. I'd recommend attending a couple local meetups or RIA meetings. Also look at Lifestyles Unlimited, bigger pockets and some Jason Hartman podcasts. Local, state and national apartment associations are also good even for single family rentals. In TX, membership grants access to a solid lease agreement and a network of trades and other investors.

I will say one more thing about my ongoing experience with CRE. I just listed my office building this week and already have showings. I have offered owner financing…which as of today I know absolutely nothing about. But believe me when I say I will know it inside and out by the time it comes to negotiations. The point is that I’m not scared by things I have no experience in. But I don’t leave it to chance. I do my homework and and take very calculated risks when I need to. There is nothing mysterious about CRE investing. The information is out there. You just have to be willing to take the time to get educated and maybe take a little bit of a leap of faith in yourself. It’s worth it.

Great - thanks to both of you for the info.

I can see why working locally is more straightforward until you're confident and have your ducks in a row. Also, more profitable as you're outsourcing more when the property isn't local.

Outsourcing can be viewed as "expanding the team". When the amount of capital grows, identify which areas you add the most value and which areas are better left to the team. Some items may be decided based on personal preference. Call me strange, but I don't mind the monthly bookkeeping. It can be done on short call or over a long layover and keeps me more aware of the finances. My attention span for daily tasks is limited and my availability is not guaranteed so as the number of tenants has grown, most of the tenant contact comes from someone else. When we had just three houses, my wife took all the calls. When we grew into storage and NNN employees and brokers began handling most tenant contact.
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​​While I've enjoyed many of my own home improvement projects, a skilled trade can get the work done sooner. When dealing with investment property, expediting repairs and rehabs that create cash flow makes sense. The key is treating repairs and improvements like a business not a home remodel project.

​​​​​​Syndications are an example of extreme outsourcing where everything from acquisition and financing to repairs and management are handled by someone else. You evaluate the team the syndicator has assembled, the underlying asset and the business plan. In some cases it's better to give up 20% of the profits in exchange for someone else taking on the majority if risk and responsibility.

Amazon Store
 

Has anyone tried an Amazon store as a side hustle? I'm curious what the real results are as compared to FBA blue sky promises on Facebook ads.

I haven't been to Vegas in a forever, so I'm tempted to just put my gambling money into an FBA store. Fire away!