Aviation financial advisors in CA?

[fatsportpilot]

Let me start out by saying that I don't know the first thing about aviation finances.

How do I find a financial advisor/planner who has experience in general aviation? In all my searches I was only finding groups that specialized in general finances for airline pilots or groups that help fabulously rich people finance their sixth private jet.

I'm just trying to find a person that I can sit down with and talk numbers about things like

• budget planning

• recurring costs

• depreciation

• insurance costs

• risk management

• liability concerns

Is there anything like that within a few hours of in the Sacramento, CA area or what searches should I be googling to find them?

[JJay]

Have you looked at aopa.org? They have some pretty nice resources, including some financial tools. Many of the online resources don't require being a member of AOPA, but if you are a member there are also opportunities to speak directly with people who might be able to help.

[fatsportpilot]

Have you looked at aopa.org? They have some pretty nice resources, including some financial tools. Many of the online resources don't require being a member of AOPA, but if you are a member there are also opportunities to speak directly with people who might be able to help.

I looked at them but isn't their finances page just about financing an airplane? I don't need to finance one because I can pay cash.

I'm not a member so maybe if I was then I'd be able to see those resources.

[ShawnM]

Just for the record, nothing about owning an airplane make financial sense and any financial advisor that tells you otherwise is wrong.

It's a hobby and it costs money, lots of it. Just like cycling is also a hobby of mine and when I spent gobs of money on a full carbon fiber road bike nothing about that purchase made any financial sense either.

The best advice I can give you is to find an aviation operating costs/cost of ownership spreadsheet online and start working on that. Figure out all your monthly costs, fixed and variable, and work it out to determine what it'll cost you monthly or annually to own and operate the plane. Then figure out how many hours a month or year you'll fly the plane to determine what it'll cost you hourly to operate the plane.

I believe depreciation only comes into play if you are using the plane for business then tracking how much business use there is. My girlfriend is a tax and estate planning attorney and she told me long ago that this can be a sticky situation if you're not careful.

Liability concerns? This is what insurance is for, if you are worried, get lots of it.

Risk management? You're flying a plane, need I say more? See previous answer.

[Atrosa]

Shawn is great resource for advice and information. Here is my advice and understand that I have nowhere near the knowledge of others here. I am however a real finance guy but please understand that this is not financial advice.
1) define your mission with your plane.
a. Fun burning holes in the sky/$100 burgers
b. Family travel
c. Business furtherance
d. Building hours for av career
This will decide the plane and the certification.
2) Unless you looking to become an ATP this will be akin to owning an exotic sports car. Fyi a clutch on an paddle shift Italian exotic is $30k... Kinda like a overhaul on certified engines.
3) understand your market and the cost. Here in CT a hanger is a minimum of $350 per month. Insurance your first few years will be $2k per year and $1,000 no squawk annual. If you fly 10 hours per month plan on $50-60 per hour for fuel, maintenance and overhaul funding. There is another 500 per month. A $1000 per month budget is a safe bet. Pilots have margin of safety built into their flying and so should airplane owners.
4) here is where I get personal. Airplanes are toys... Never and I mean Never finance a toy. A house... Fine but do not finance motorcycles, cars, boats, furniture TVs... And especially airplanes.
Good luck in your search.
-Tony

[Warmi]

I did finance certain percentage of the original cost of my plane. Paid it off in a about 15 months and that was that …
The loan was bit more like part of managing my cash flow rather than a conventional $1000-a-month payment (for instance some monthly payments were in excess of $10k , depending on my cash flow) but it was still a loan taken for what is essentially a toy

I think “never do that ” is a bit too dramatic … it works just fine if you know what are you doing in the first place and do not solely rely on “let’s get the loan and hope that things will work out” approach.

[drseti]

I tend to agree with Atrosa (with one exception). Airplanes are luxury items, and I don't believe you should incur debt for the acquisition of luxury items. I've owned four different aircraft in the past 4+ decades, all bought with cash.

The exception is that if you have the cash, and it's securely invested in an instrument that generates substantially more income (or tax benefit) than the loan would cost you in interest, then it's OK to take out a loan. An example might be that your cash is tied up in long-term, high yield tax free government bonds.

Too bad those are no longer being offered

[Atrosa]

Yeah I'm a little militant about debt. I just know when you borrow money it is akin to slavery. I'd make a terrible slave.

I did borrow money for a truck in 2015 but that was only because the price was cheaper if I financed it..... What crazy world do we live in when cars are cheaper when you borrow? But I have a good relationship with the dealer and we agreed that I get all the discounts and wait 3 months to pay it off so he gets his finance money.

If you are young please save and invest then when you are older you can buy things with cash.