+1 on Bucking Bar's post. Some do not realize that "qualified 401k" savings can be rolled to an IRA (and far above the $6500 per year IRS max) in order to purchase real estate via the Self Directed IRA. A rough estimate is about half of the 401k is qualified, but everyone is different. Buying a rental property for cash, with all proceeds returning to the IRA, and real estate gains over time, protects from stock market fluctuations. As always, dyodd and speak with qualified personnel.

Reminds me of a friend who worked summers in high school as a hod carrier (caring a stack of a dozen bricks up a scaffold to a bricklayer.)

He decided his choice to go to college to be an engineer was a wise decision.

Agreed, but there are limitations on leverage within an IRA. You either have to be an all cash investor or be in a position to use non-recourse financing and pay UBIT on the leveraged portion. Also in dollar terms, it can be difficult to get enough money into a self directed IRA.

If you are talking about sizable holdings, there may be some advantage to structuring the deal so that gains will fall under a carried interest provision vs pass through income. Don't get advice on this from APC! Also under the new tax code, there are reductions on taxes for pass through income via a K-1 from a Parthership / LLC. I'm not sure if rental income on a 1099-MISC receives the same treatment.

Too late to edit the post. It should read UDFI not UBIT, although UBIT could be a factor in either leveraged or all cash real estate within an IRA.

Or go for the self directed ROTH IRA and work your way up to a massive portfolio of tax free real estate appreciation and monthly rents rolling in completely tax free...

Sounds too good to be true.

Market timing is not good. The rebalancing is whenever any given asset allocation in a portfolio exceeds its share of the portfolio by 25%, again spreading risk around instead of allowing it to build up.


Exactly correct.

Lady came in for a hammer...

Or,

As an alternative, you can blow all this risk off, and make as much or more. I have a side hustle that I work when I want, with no risk, carries no insurance, no dealing with insubordinate personnel, if you want time off take time off, do it at your leisure, and make $70,000 a year.

No,


it's not selling Sham Wow or Amway or Mary Kay. This is something you've already been trained and know how to do. As a nominal Captain, making $300/hr, combined with DC of 16%, profit sharing of 16%, let's put it for arguments sake at $400/hr... one day trip $2,000; 2 day trip $4,000, 3 day trip $6,000. No fuss, no muss. Agreed, you may work 3 days flying with people you like drinking beer at places you choose to go. Kona? 3 days? drinking beer? sitting in the sun? swimming with turtles? Tear my arm off and beat me to death with it.

Would I rather make $300 a month on a rental and have 20 of them to deal with, or do something I truly enjoy and gross the same amount?

Oh, wait. I forgot. Please ALPA, protect me from myself. I want to stand on my ladder, and paint my house, and trim my trees or somehow justify fishing at the lake for $2,000 a day. You guys hash it out any way you want.

Passive income is great. I made copious porn films years ago and the passive income of me and John Holmes is extraordinary. But it's not the bidnes for everybody.

Cheers. To each your own. Hope everybody excels at whatever their side business is until the minority convinces others that we need protection from ourselves.

Because isn't that what a union is for? I'm too stupid to understand what I want to do with my own life, and the union needs to protect me from me? Thank you.

Just finished washing my windows on a 30 foot ladder because I had nothing else constructive to do with my time. Took my wife out for a nice golf outing. Went to dinner. Drank beer. Knocked back a few honey jack cinnamon whiskey shots and thought to myself... "Damn, I'd rather be flying airplanes than D***king with washing these MF'ing windows on the outside of my house. 40 of them. Rather fly an airplane, than deal with that shiznit.

Or, I can be like some on here and say enough is enough. But I have 24 days off in a row, no vacation. WTF. Please protect me from me.

Cheers

Side hustles are great if they are mainly passive or low maintenance. I make functional art out of old bike parts and sell a bit of my photography but otherwise it's mostly fun and in my spare time. Not raking it in, but some fun spending $$ never hurt.

Definitely a good idea to keep another skill current though in the event of a medical issue or furlough. Never know in this biz.

I agree with Buck. My side hustle is picking up flying. If I pick up one extra day of flying a month that is roughly $20K/yr. I happen to love coming to work and doing this job. I don't have or want to do something else that can bring me an extra 20K/yr. The biggest risk though is I need to retain my health to keep doing it.

It helps that I live in base and can easily pickup one days.

Oh, I've also written some
magazine articles and those are good for $100-$150 a pop at my typical length. Pays for my subscriptions.

I do enjoy seeing what others do though, very much.

A while back before the merger I was a DC9 copilot in DTW, one day we had a whale captain on the JS to xyz. He was happier than a pig in sh!t, he had just left the 'Apartment' in the Phillipines, with a bucket full of cash that his girls had given him. Oldest profession in the world...and of course dont forget all the perks that comes with ownership!

I like the part where he freely shared that he was a human trafficker, and that you presumably let a coworker go on about his trafficking business without so much as a raised eyebrow. But hey, it’s probably legal in the Philippines! And they aren’t like, you know, real people like Americans, right? Yikes.


Sent from my iPhone using Tapatalk

So coming from a long time at a regional and not being really aggressive with long term planning, this is the first year I am going to be maxing out personal 401K contributions at $18,500 + 16% from the company.

We plan to put 100% of my flying income into retiring early and living solely off the spouses income. She also maxes out her 401K contributions. What would the financial "guru's" :D here recommend putting the rest into? Real estate rentals? S&P Index fund? Both?

We both put money into the stock market outside of our 401K, but have been looking into real estate as our next move. Just starting to read tons of books on the subject but some of you guys have years of a head start on me so you could probably provide some good insight.

*note, clearly not just basing decisions off a pilot board, but nice to hear ideas and what everyone else is doing.

If you can live off your spouses income I would work long enough to afford about a 26 foot Grady White with twin 300’s. I would retire at that point and let the wife work forever!

Soooo you're saying you don't like whiskey? :D

Sounds to me he likes whiskey,,, Just doesn’t like the taste of whiskey...

A fall from a 30 foot ladder at worst could be fatal, if you're lucky you could just break a leg or end up in a wheel chair the rest of your life. I'd consider hiring a window washer for a couple hundred bucks. About 10 years ago a former governor of Nevada was cleaning his gutters in 100 degree heat, passed ou, fell off the ladder, cracked his head open and died.

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.

3. Buy income property. This is a subset of real estate. Single family houses, duplexes or a 4 plex are a good place to start. Once you exceed 4 units, the financing falls under a different set of rules, which can give you more options on how to structure the ownership and financing. If you want to jump right in, go for a small apartment complex, storage facility, trailer park, RV park. They each have their own positives and negatives. Whatever you do in the income property realm, build a team to do the work for you. The goal is to have an investment, not another job. If you are lazy and loaded, look at NNN investments. My broker refers to that as "mailbox money".

3. Keep some liquidity in S&P 500 Index or other low cost diversified fund. Keep some in cash. You never know when opportunity will come knocking.

Hey you could become like Dr Atkins, made a fortune off of selling the Atkins Diet, all about losing weight/better health, but slipped on the ice, hit his head, and died in the ICU nine days later.

This. Besides, if one of you decides to peace out the marriage, you don’t want to be the one earning more. Anyone looking at a 25yr legacy career should get rid of this first one before the mainline, or get a post nuptial in play ASAP.

Thanks. I am actually at AA, (you DAL guys just have better chat on the finance subject ;)) will have to look into our Fidelity plan and see what is available. I think they have the same rules..

Sent from my iPhone using Tapatalk[/QUOTE]

[/QUOTE]



I didn’t mean to ruin your story about that c**t you had in your jumpseat. Apologies.

But since I already ruined it, I’ll just add that prostitution is actually illegal in the Philippines, as is traveling outside the U.S. for the purposes of engaging in sexual contact with a minor (this guy sounds pretty stand-up, though, so I’m sure all his chickenheads were over 18). Stay classy!



Sent from my iPhone using Tapatalk

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?

I didn’t mean to ruin your story about that c**t you had in your jumpseat. Apologies.

But since I already ruined it, I’ll just add that prostitution is actually illegal in the Philippines, as is traveling outside the U.S. for the purposes of engaging in sexual contact with a minor (this guy sounds pretty stand-up, though, so I’m sure all his chickenheads were over 18). Stay classy!
Sent from my iPhone using Tapatalk[/QUOTE]

Ok, your right, I looked it up on wikipedia, the Phillipines does not have legalized prostitution. I was very surprised by that, as it is extremely prevalent there. Looking deeper, it also says that its not only tolerated by some of the local goverments, but they are involved in some cases.
There is also a list of countries that have legal prostitution on wikipedia:
Australia, Denmark, England, Germany, US (Nevada), Holland, New Zealand, Austria, Bangladesh, Belgium, Brazil, Columbia, Costa Rica, Canada, Ecuador, France, Greece, Indonesia....and thats just the top notables on the list as it goes on and on. But hey, its easy to throw around the class word about someone you never met because you think its morally wrong. I guess its just as easy to accuse an individual of trafficking in persons and child prostitution...but seriously dude...thats a GIANT leap.

Could that same argument or logic be applied to someone wearing Gucci Shoes? Or would you call them a child slave holder, because some of those Guccis might have been made in a sweatshop by a 5 year old in Karachi?

Frankly I dont even know the guy,...but really, yet I find myself defending him, or at least the premise...cause I just dont like the morality police trying to cast shadows or shame the rest of us. If its not your cup of tea, so be it, its not mine personally either, but I dont presume anything, especially to tell people what they should or shouldn't be doing, especially if its legal.

I sell small soaps, shampoos and light bulbs on Ebay. . . very low overhead.

Add AA batteries and you have a retirement plan.

Look for 401a after tax contribution on the portal where you make contribution elections. It may be on the AA HR side or on the Fidelity plan side. Either way spend time on Bing/Google searching "401a to Roth IRA"

With your Envoy history, I would just consider yourself extremely fortunate to be at AA and focus on trying to fly and do my job. You don't need any distractions.

Really? Should we all just chair fly everyday at home and do nothing else? Airline pilot....not brain surgeon. I think he will be fine.

You should probably keep your focus on your envoy cheerleading and counting down the days until your flow in 2025

Having a source of income and financial security outside of the airline is a wise idea. It is far less distracting than the concerns over furlough if the music stops tomorrow. I started my side hustle with income property the month I was hired as a source of stability.

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.

That's all great as long as you are flying, actively employed and don't mind spending an extra day or two away from home each month. I totally get guys who do that. But personally, my side hustle (rental property) is as much about revenue now as it is part of a long-term plan to generate income and preserve wealth post-retirement. Hire a trusted, competent manager/management company and it really is a hands-off business with little effort 95% of the time. As a data point, I would estimate that I spend about 2 hours per month actively thinking about or having to be involved in any of my properties. Way less time involved than even picking up a green slip. And if you're the kind of sick individual who happens to enjoy evaluating properties and delving into the finances of it, then that 5% that is "work" doesn't even really seem like work. Your reward for this minimal effort? A few thousand dollars a month just deposited in your account while letting someone else pay for you to build equity that can be cashed out or borrowed against when and how you choose.

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.

I think side hustles are good just to keep active, but as always, the best guard against an economic downturn is to be debt free.

This times a billion. I have toys but I have toys that I pay for in cash. I have a house that fits my family comfortably but I don’t plan I buying a bigger Captain house. Live below your means and you will also live stress free.