sailingfun

True until you factor in that you must pay to live somewhere and you are leveraging your investment with the ability to put a relatively small down payment to control a large asset at some of the cheapest interest rates you can obtain. As I pointed out a one million dollar home with 20% down yields a 20% profit in year one if the home appreciates only 4%. Your payments also increase equity each month. The one thing that caught my attention early in my career was the senior guys who seemed really well off had money in real estate. It certainly should only be a portion of your financial planning but should not be overlooked.

madmax757

I have done well with multi unit properties if you can stomach the hassles of being a slumlord. Did it last 15 years and I just cashed out on my last one and will bite the bullet on capital gains. Just need to time the market , usually just luck I’ve found out. Then when youre Getting phone calls asking if you want to sell your property- it’s a good time to sell it !

As far as younger Gen Z , D and E not wanting to buy. They do have a point. I personally cannot fathom the idea of not owning my home, yet I lease a car. A lot of younger people I engage with don’t want the hassles of ownership. They can pay their rent, fulfill their lease and be gone . Also a lot of nice apartments are like resort living now. A newer pilot I worked with travels the world like a gypsy on her days off and it sounds appealing. Society is changing .

m3113n1a1

Yeah, I don't own and really can't justify it financially. I live well below my means, invest the excess into index funds, move whenever I want to and just call my landlord whenever anything breaks. Hassle free life.
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Furloughedboi

All this financial talk; anyone have a recommendation for a reasonable reference for a financial planner?
I am not from this kind of money and financial planning is not a passion of mine. Looking for someone to talk to kind of just have a set it and forget type plan. 401k, health spillover, etc

DryClutch

Just curious, you think it's not a realistic option because of the current real estate market? Which I completely understand, i've got a buddy at an ACMI, 76 CA who can't afford to get into a home in ATL. We built our house new 11 years ago for $500K'ish, it would now sell for $1.3M on our street. And it's nothing insane, relatively standard 4/3 around 3,000 sq ft on a 1/3 of an acre. And people are still buying these places 2 days after going on the market, for over asking. Young couples too, I don't know where they get this money from.

PiperPilot03

A good rule to use is to never take financial advice from a pilot.

With that being said, here is my free advice.

A financial planner can drastically eat into your 401k balance.

"An extra 1% in fees can be brutal when it compounds over time. And extra 401(k) fees add up even more quickly for higher-income workers. A scenario from NerdWallet analyzes a 25-year-old who plans to retire at 65, has $25,000 in retirement savings, saves $10,000 in the account each year, and earns a 7% average annual return. In this example, paying just 1% in fees costs the saver more than $590,000 in sacrificed returns over 40 years of saving."

If you truly want a financial planner, try to find a fee only fiduciary. I got quoted from such a planner for a whole holistic plan for around $5000. We didn't end up going that route as we are still young and I enjoy learning about financial strategies. The person with the most invested in your financial future is you, so I feel with proper education, you can control your portfolio yourself. Only like 5% of fund managers can outperform the market, so I really feel passive investing is the way to go.

If you don't want any part of it, a basic target date fund is a good way to do it. Just make sure it is not actively managed and uses index funds to keep costs low.

If you want a little more control, a 3 fund portfolio (domestic total market, international total mark, domestic bond) is very easy and reliable. Just rebalance once a year and it's totally hands off besides that. We are still young so we do this without the bond allocation.

But my biggest piece of advice is to max out your 401k, your wife's 401k (if she works), your and your wife's Roth IRA (use the backdoor method as long as you don't have a traditional IRA), and if you are eligible, your HSA. Never touch your HSA funds until retirement. Pay cash for medical bills while allowing your HSA to grow tax free (HSA is one of the best retirement accounts possible as it is triple tax advantaged). Save all your receipts along the years and when you retire, withdraw cash from the HSA using those receipts.

I really enjoy following these guys. They have a financial order of operation that walks you through how to save and where to put your money. They have a youtube channel, which I enjoy.

https://moneyguy.com/article/foo/

There are other areas where a financial planner would be very beneficial, but I'd say it depends on your mindset and your age. As I get older, I will definitely pay a fee only financial planner to double check my plan and help tweek it a bit. But doing Roth conversions now (Trump's tax cuts are ending soon) to reduce future required minimum distributions (RMD's) might be a good idea, depending on your tax bracket now.

rickair7777

I'll emphasize this. You can just go head down, nose to the grindstone and blindly accumulate savings and wealth when you're young.

But approaching age 50 (maybe sooner if you hit max contribution limits) you'll definitely want a professional to look at your situation holistically. Fee only, not somebody with a financial product to sell, and they need to be local in your state to address your specific tax situation.

The point of this, now that you have wealth, is to ensure that you don't waste any wealth or opportunity by mismanaging investments, taxes, social security, etc. For example you may need to reduce 401k savings late in your career, to avoid excess RMD's and associated tax in retirement.

rickair7777

Day trips generally go senior, often very senior. Nice if you live close, like them, and can hold them.

But not really a valid proposition for most pilots to tell them "just fly turns".

If the question is "how do I spend more time at home after my wife retires at age 60?", then turns might be the answer.

SonicFlyer

Most of the rest of your advice was excellent and spot on... but target date funds are not any good:

https://www.paulwinkler.com/podcast/...nts-heres-why/

Yakattack

I love this. Thanks for posting it. I think that's something that I've had to come to terms with too, and if I could go back in time and tell my newhire self one thing, that would be it--that way I could have gotten started down this path earlier. We're not totally off the rails, but I think I would have made some decisions differently. I think when you get hired at a major, you think that you've "made it." Well, you have and you haven't. So I've had to adjust some of my expectations. It was unpleasant at first, but I think both my wife and I are on the same page now. Luckily at this income level, you can fix financial problems in fairly short order if you catch them early and prioritize.