Originally Posted by JGSFLA
If it would be about the operational cost well for instance I am "retired" and manage money and I can easily make 10 to 20% on my money per year so why would I put an extra 3 million to get the same if the 3 million difference can make me 300k to 600k a year and that would easily offset the operational cost of the plane given the hours I plan to fly per year.
I suppose he was asking a valid question, but come on I can't believe that nobody else has called this guy out on his bull**** story. I guess that with hard work and some sort of talent, a lot of 'idiots' can get rich, but no fund manager is EVER going to say that they can "easily make 10 to 20% on my money per year". Especially in this market, but even in any market. I mean the historical average annual returns on the S&P 500 are probably under 10% now since the downturn, and there's great debate over whether actively managed funds can beat that by pure speculation. Plus there are so many better resources available to this guy rather than an internet message board. He could have gone to a broker, talked to a maintenance company, and I believe that the largest investment banks and wealth management firms all have resources to advise their clients on the issues of buying private jets. He was going to make a decision off of information he heard here?
Plus he wasn't using the finance concepts or jargon that I would have expected from someone as 'sophisticated' as him. Its like he was trying to express the idea that his discount rate on the capital investment (the plane) was 10 to 20%, but he wasn't exactly sure how to phrase it
And he believed that he would be able to 'recover 85% to 90%' of his investment if he sold? Half of that would be brokerage costs alone. And in how many years, engine cycles, landing cycles, flight hours, etc, would he get that back?