I want to plan!
 

I am really young and nowhere near retirement. I'm posting here casue I want to know how many pilots have side businesses. I have always thought that a side business would offer security, but pilots aren't usually good businessmen (I think). And how do pilots usually invest their money (Shares, trusts, property tc?)

In my personal opinion, I think pilots are just like another sector of society, in that they invest or plan based on what they are willing to risk.

Some pilots might invest in money markets, funds or commodities, some with a higher sense of risk, may start the occasional bar or restaurant. (Yes, it is a big risk)

And then there are those who invest in International trusts or securities, real estate in tax advantaged jurisdictions, or join with others in larger investments. (Those pilots are usually very well informed and understand the risks)

It really depends on what kind of research and preparation your willing to do. Then how much are you willing to risk...

And by the way, theres no such thing as too young to plan for retirement, one day you won't be flying, you may be married, you may have children, whatever the scenario, planning is never a bad idea.

I wish you the best of luck.

domeplease
I've been thinking about this lately as well. I've started reading up on realestate investing. There are heaps of books out from various authors. Very interesting reading, and I recomend reading through a few. But like what Ridley says, those who take the gamble should be very well informed (a little more than what I have done so far) on what they are planning to do, otherwise they are wasting their time (and quite possibly their money as well).

The only advice I can give you was given to me from my dad:
Don't ever put all of your eggs in one basket, don't be greedy, and be sceptical about every 'get rich quick' ploy that presents itself to you.

rgds
fnb

PS, good forum!

Franks I'm with you on this one.
Don't invest what you cannot afford to lose. I've plenty of guys who think they now more than the pro's do about investing and lose alot of their money.
A pension is one way of a financial future and investing should be looked at an extra if it works for you.

I have always found a self administered 401K (USA) or an RRSP (Canada) a fairly good supplement to a registered pension plan until the recent stock market meltdown.

Now I'm looking at real estate again since interest rates are so low, anybody got any better options?

Sure don't get anything putting it into a Bank or GIC:(

DMP....I am on the other end of the career spectrum, in other words i am nearing retirement, here are a couple of pointers that might help to prepare you for life after aviation:

One of the best things you can do, is to acquire some additional skills, long distance learning is becoming more and more popular, you can select something that will alow you enter another field of endeavor should the need arise, you can prepare to open a business or whatever you like, (run a resthome for retired Pilots)

The key is to start early to allow you to go at an easy pace, whether it is learning or investing, the more time you have the easier it is. Many pilots nowadays have no pension to look forward to, which is the case in my situation, the advantage for me is that i always knew this to be the case and therefore accepted that it was up to me to make plans to finance the evening of my life.

I am fairly well diversified, some in mutual funds, some in real estate, some liquid and some of it trusting in my skills the earn a little bit of an income after I stop flying.

It is a lot nicer to face the future with a plan, any future!

take care!

That sounds like well thought out planning and advice to me particularly a Rest Home for Retired Pilots I feel closer to needing it everyday.

Hmm, I bet the pilots junior to me would love to hear me saying that. ;)

The more I think about it, the better it sounds. All you would need is a Bed and a Bar, most times you could seat the retired capatain in a Cockpit seat with a Yoke and a set of throttles to hold on to and put a Basic T in front of him, I'm sure he would be content for hours.

You're not kidding about the young F/O's hearing you, at a recent sim session I was nudged to "drop dead" just prior to flare, after the F/O landed, he called for someone to come and take the dead guy out of "his" seat!

Now you're talking, throw in a golf course near by and I think you've got it.

I have to laugh about your junior pilots comment. Our association just did a survey and we voted in favour of carrying stun guns, to which one of our senior Capt's said "now I'm wondering whether they're supposed to assist in warding off unwanted intruders in the cockpit or to vend off over -aggresive crew members trying to move up a few numbers the easy way".

I know, I know I have digressed and am now completely off the topic of this thread. :confused:

Flufdriver question
 

Flufdriver I have a pension & I'm nearing mid career but I think I will need to augment it (kinda like a long overseas trip augmenting a crewmember) to maintain my current lifestyle.

Have you got any recommendations or suggestions?

vestage - av8r

Franks could you maybe pass on the names of some of those Real Estate Investment books you found the most informative and interesting.

In my experience I've found there's NO subsitute for a Good Financial Advisor. :)

vestage - reply
 

As Skygirl says, a good financial advisor is very helpful, the difficult part is to distinguish between good and bad, they sound the same.

You're probably correct that you will have to supplement your pension to maintain your Lifestyle, it is commonly believed that you should plan to have an income (when retired) of between 60% - 80% of your pre-retirement amount.

As I said in my previous post, I consider myself fairly diversified, i am also fairly handy, I own some rental properties which i maintain and administrate myself, they have a ROI of approx. 20% net.

i believe the most important thing you can do to enjoy retirement is to guard your health, stay active and mentally engaged, exersize etc. this keeps the healthcare bills down and allows you to protect your resources.

Hope that helps, now if I can only follow my own advice!

FD That sounds like very good advice but I tell you I have enough problems just staying on my exercise regime.

Diversivication is the key but I've always felt that real estate is generally the safest with a reasonable return. Twenty percent is a great return do you usually invest in residential or commercial property?

What type of location do you prefer?

Fluf thanks for the advice.

It sounds like you've got a few good friends that keep you in the know.

Where would you suggest is a good place to start? Most of the financial people I know are too hungry to be objective... :D
Is there a group you like? What books would you suggest I pick up? Are there any organizations I could join that would give me that kind of advice? (That I could trust) (HAHA more damn questions)

vestage - av8r

Vestage,

If you need a good financial planner in the PIT area, drop me an email at [email protected]. I'm originally from that area, and have a lot of family up there. We all use the same guy there.

Andy
E145 CA IAH

skygirl
 

I know what you mean by staying on the exersize program, unless you get up at 5 am and start, the day is over before you can blink twice.

my personal belief is that while the top end of any industry is the most glamorous, it is often not where the steady money is made, therefore, I aimed my developement at the lower end of the rental market and I keep it in good condition. When the economy is humming along good, I get a lot of single professionals that are starting a career or are new here, when times are a little tougher, (like now) I get tenants that are moving down a notch to save on rent. I've been able to keep a 90% occupancy over the last three years.
The key is not to let the property run down, make sure you think of your tenants as your customers and treat them accordingly.

Of course location is always important, consider the needs of your customer, singles don't need to be near primary Schools, public transport access may be important, safety always is etc. let common sense guide you.

I have to agree with you, this rental apartment project has been the best investment I have made so far.

Vestage:

Looks like Bad-Andy has you covered.

Like I said earlier, I've been around a while and I have seen and learned a few things.

Whenever I have to choose someone where trust is going to be a significant issue, I am more interested in the character of the person then all the certificates on the wall or an impressive resume, even with my limited computer skills I can manufactor all that.

I would advise you to do the same, don't be dazzled by B*ll-!!!!!.

Good luck!

That all makes perfect sense to me FD do you know anything about the term "Triple Net Lease" I hear that term allot with commercial properties but I've never understood it.

Any help would be appreciated. :confused:

Skygirl
 

Sorry, can't help you with that one.

Things are very simple here since we don't have any direct taxation.
In most places one has to continously guard against the tax implications with any investment move they make, fortunately I have no such worries.
Here we pay taxes on what we spend, not what we earn and i prefer it that way.

take care!

fluf:
Must be nice living in luxury in the TAX-FREE Cayman!!!

I'm very intrigued about tax-free jurisdictions, only I'm a little gun-shy about moving residence since I don't have a clue how hard or how scary it is to do.

I know the benefits of being a pilot makes it easier, but how does one go about it?
Whats involved?

Was it that difficult? How long did it take?

Thanks

vestage - av8r

vestage
 

now this may be a long story in its entirety, but I will try to hit what i consider to be the salient points.

As far as my personal situation is concerned, I've been here a long time, nevertheless, originally from elswhere. further, please understand that i am not a financial expert or advisor and anything I say here merely serves to get you think about issues and perhaps ask the right questions.

This country is not taxfree! quite to the contrary, it merely has a different tax system, which is indirect and based on consumption.

For lets say a US citizen to move here and make Cayman his/her home, would only become (financially) interesting, after initial income taxes had been paid ( if the money was earned in the US) Note: The USA State department reserves the right to tax its citizens on their worldwide assets and income. (this may not be the exact language, but that's roughly what it means. moving along, so if you now take your "clean" money and you purchase a residence in Cayman (or invest it otherwise) any profit that results from that investment is yours in its entirety. there is perhaps an additional level of protection if you gain permanent resident status here but I don't know about that.

if you are contemplating such a move to protect some of your assets from double and triple taxation, then i suggest that you perhaps do a trial run, come down rent a house for six months, perhaps from November to April would be a good time to be away from Pittsburgh (I used to have to go to SIM there in Winter, BAC 1-11) that could give you feel for the place and the commute and then take it from there.

I hope that helps

I'm coming down to the Cayman towards the end of Nov to do just that FD take a good look around. We have quite a number of our pilots residing in the Cayman, Turks and Bahamas and as none of these countries have any Income Tax they save a ton of money over paying taxes in a high tax country like Canada.

I don't know about the US but Canadians pay taxes (income) on were they reside not on citizenship as a matter of fact Canadians can still travel on there Canadian Passport while residing elsewhere but Permanent Residency is a very important component of disassociating yourself from Canada for tax considerations.

I've finally got enough seniority I could commute fairly easily so I'm seriously considering it and with Canadians we have to be outside of Canada more than 180 days a year (for the tax savings) which I almost do that just by virtue of my job.

It sounds like you have lived in the Cayman for quite a while I assume when you say the taxes are indirect and based on consumption you mean for example food, utilities, gasoline, licquor etc.

You know I which I had paid more attention to my typing teacher in school and for that matter my spelling teachers too. Hmm maybe I should have just paid more attention to it all. :(

747Pilot
 

what is the old saying?

"you get old too quick and wise too late"

but anyway, like probably you, I have learned to live with my shortcomings.

yes I have been here a good while and yes the taxes are on just about everything you buy, cost of living is about Miami plus 25%, if you import a car you pay 27.5% tax on the value and cost of transport, local mortgages are around 10% etc. Gas is about US$ 3.00 per gallon. so, while we live in a low-tax regime, you couldn't say the same about the cost of living.

Having said that, it doesn't matter whether you make 30k or 200K per annum, you still only eat lunch once a day, so give me our system anytime. it rewards, instead of penalizes, hard work and frugality.

fluffdriver
 

There's definitely a lot of truth in that saying and I'm certainly well aware of my shortcomings as is my wife. Hey, that didn't sound quite right.

I look at your COL estimates and to use one of your examples someone earning say 200k in Canada will pay approximately 43% or 86k of it to Federal & Provincial taxes unless they establish some elaborate tax defferal scheme which usually just delays the pain. Then they will pay an additional 14% in the form of a Goods & Service Tax (GST on everything) and a 7% Provincial tax (PST on most everything) for a total of an additional 14% on after tax dollars as well as a host of other hidden taxes such as fuel, property, etc again on after tax dollars (after tax dollars is the 86k less the 200k leaving 114k which is referred to as our net income). The long & the short of it is I would take your system in a heartbeat precisely for the reasons you have stated so well in this thread.

Would you be able to give me a rough estimate for say the cost of an average family of 2 adults, eating average stuff, for an average 7 day week.

How's the plans for the Retired Pilots Rest Home coming along? Some of our guys were thinking it would be like a layover with a per diem, transportation to and from the airport etc ;)

747Pilot
 

So let me get this straight you are actually thinking of a "not quite retired Pilots resthome"

Sounds pretty good actually! Could certainly customize the services offered.

To give you an idea about COL and the effects of no direct taxes, (property tax is a one-time charge on purchase)

A Canadian friend of mine came here, built his own home (self contracted, hired sub-contractors) it is now valued at US$ 750K, He said that had he purchased the house while remaining and working in Canada, he would have had to earn 2 million in order to have sufficient money (after tax) to buy the house and it obviously didn't cost him the full value to build it.

my estimate of grocery cost for a small family eating well but not buying everything pre-cooked, would be in the region of US 200 +/- 15% per week, booze and cigarettes would come on top of that. It is generally thought that the breakeven income for a family of four is around CI$ 30k per annum. CI$ 1.00 = US$ 1.25

fluffdriver
 

I can just see a "Rest Home for Retired and Semi Retired Pilots" one of the problems would probably be all the residents would likely want there coffee and meals delivered whenever they push a button.

Oh well maybe the more junior pilots would subsidize that just to get them of the Seniority list.

That example of your friend with a Canadian house is sure true on top of that example in some provinces there is also a property purchase tax about 8k on a 500k house and then we pay an annual property tax (every year) and on a 500k house that would probably be about 7k and it goes on and on..........

Thanks for the COL estimates they sure look good to me even with the premium attached to the CI $.

Have you heard anything about the CI$ being re-valued to be pegged on par with the US$?

747Pilot
 

That rumor (about CI$ /US$) is going around every few months.

Recently the financial arm of govt made an unequivicle statement that there was no intention to adjust the exchange rate between the two currencies.

on a personal level I cannot see this happening either, if it did, an immediate result would be that the cost of all goods currently prized in CI would be increased by 20% and that would not be in anyone's interest.

Further, i think the time to do that would have been before the introduction of the CI Dollar, we could have just adopted the greenback as our official currency and saved all the cost associated with having our own.

But then again what do I know?

FD & 74
 

I read this on the online version of the Nassau Guardian....

Crime in the Caribbean
CRIME A GROWING CONCERN IN THE CARIBBEAN: Bahamian prime minister Perry Christie has warned those involved in the Caribbean’s tourist trade that crime and filth are harming the Caribbean’s efforts to attract more tourists. “Why would a visitor want to leave a clean, safe, all-inclusive resort to be exposed to filth and rip-offs... a priority must be placed on stamping out criminal behaviour,” he said during this week’s Caribbean Tourism Conference in Freeport, Bahamas. Like most destinations, the Caribbean’s tourist trade has suffered since Sept. 11, 2001, and tourism officials say crime and harassment of visitors is hurting recovery efforts. One study by a McGill University centre found the rate of crime was the greatest concern for tourists considering Caribbean vacations.

I can sure see this in Nassau or Montego Bay but I thought the Cayman was one of the safest of the Caribbean Islands?

I've been there lots of times and I think it is probably one of the safest of the Caribbean Islands. It would be nice to hear from some of the full time residents about the crime or lack thereof in the Cayman.

well, I suppose I qualify as a longterm resident.

The danger in responding to a question about crime is that it is a no-win situation, there is no question that we have more crime here then we have ever had, at the same time crime here compared to any major city in the US or some other caribbean islands is neglible.

i feel completely safe going anywhere on the island at any time of the day or night. There has never been a time that i felt the need to lock my car while I'm in it, however, I now do lock it ever time i park it some where. I have no burglar bars on my windows at home, but again i lock my door when i go out or to sleep.

i hope that will give you some indication of the level of crime here.

Well said that's exactly what I thought and my impression of the island this buddy of mine who lives there was complaining about the increase in radar (his driving is like low level flying) and he was saying tickets are getting expensive. Have you noticed that.

Response to fluffdriver
 

You certainly qualify as a resident expert on this thread but i think Bermuda and probably Barbados is as safe as Grand Cayman.

In the USA, vacant lots have been a very good investment.

The trick is to find an area that looks ripe for expansion.

Next, find one that doesn't tax you too much.

My father made a good living by doing just that on Long Island.

i find this thread quite interesting and i think you have a good idea I.M. Why couldn't we try and identify similar type of properties which match your criteria somewhere in the world (probably the US).

It just seems to me with all the members on this board we shoud be able to identify some pretty good ones if anybody that new of one posted it we could narrow it down to the best ones and maybe do some serious due diligence on it.

What do you think?

Yes, I too would like to look at alternatives, being originally from a four season type climate i occasionally miss the change of the seasons and the variety in the environment, no mountains and rivers in Cayman! and i think i will miss it even more if and when I'm no longer working full time.

Ideally, I would like to spend the Summers in Europe or similar climate and the Winters in the Caribbean.

I'm always interested in a good opportunity to invest in something that is either lucrative or enjoyable (or heaven forbid, both at the same time)

Got a Chalet in the (lower) Alps? or a nice Condo in Colorado etc?

BTW. the person that mentioned personal safety in Barbados or Bermuda is probably quite correct, there are still a lot of good places around, you just don't hear much about them, it doesn't make headlines!

fluf: I too would like to get into alternatives, but what alternatives? We need people to post more alternatives on this forum.

Anyone out there with any alternatives? Huh?

Got a chalet in the Alps? Got a chalet in blackpool? ;)

Hopefully we'll get this thread going.
I'm currently looking at some real estate in the sunny caribbean.

I'd like to hear some success/horror stories from other pilots.

Anyone? Fluf? Mob?

With the power of this worldwide forum you would certainly expect we could begin to identify and maybe even narrow it down to some excellent investment opportunities for aviation types.

Actually I think it could be fun sorta like playing Monopoly (i always wanted to own Boardwalk) on a global basis.

I agree with FD "Summers in Europe or similiar climes and the Winters in the Caribbean would suite me to a tee from a lifestyle and finacial standpoint.

What i find the most intriguing do we have any opportunity as a result of this incredible global forum aka pprune to pursue this together or should we just go it alone?

Personally I always felt there was strength in numbers like our associations.

:eek: Ready for incoming :eek:

No incoming from me I think it's a good idea I guess I'll have to put my thinking cap on or just lurk waiting for you guys to come up with something. ;)

I agree that we should take advantage of the fact that we are located all over the place and the connection is Pprune.

The way we can use this is like this: lets say 747pilot says; Guys (and Gals) my weary bones cannot take another winter in the frozen north, however, i don't have a spare half million (and up) to plunk down on a condo somewhere in the caribbean and on top of that I will have to worry about maintenance fees, assessments etc. is there anything else I can do?

Then i would reply, Friend, let me tell you about our island, no matter where you live here, you're never more then 5 minutes from the sea, so unless you want to look at the ocean when you wake up, I can help you find a little 2 bedroom fixer upper on a 10-12000 sq ft lot, that you can buy for under a $100K. Or I could tell you that I have been down to the Bay Islands in Honduras and you can a have house built for under $50K.

Many of us have good knowledge about a lot of things, via this website we have the opportunity to exchange that knowledge to our mutual benefit. If you, like me, had to work for what you have today, you'll want to use it wisely.

So, having said all of that, I'm ready to deal with the requests, you can always send a private message.