06 May 2025, 18:54 [ UTC - 5; DST ]
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Post subject: Re: Buying a Jet Posted: 03 Jul 2021, 09:45 |
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Joined: 04/27/10 Posts: 2094 Post Likes: +996 Location: Phoenix (KDVT) & Grand Rapids (KGRR)
Aircraft: BE36
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Username Protected wrote: What happens when the RE market tanks again and the DJIA pulls back, both of which will, happen sooner than later?  Are you concluding the smart money is in jets right now?
_________________ Since Retirement: CL65 type rating, flew 121, CE680, CE525S, and CE500 type ratings.
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Post subject: Re: Buying a Jet Posted: 03 Jul 2021, 10:47 |
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Joined: 08/14/13 Posts: 6410 Post Likes: +5143
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Username Protected wrote: What happens when the RE market tanks again and the DJIA pulls back, both of which will, happen sooner than later?  The jet is a great store of value and will offset inflation and market fluctuations! Haven’t you read prior posts/claims?
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Post subject: Re: Buying a Jet Posted: 03 Jul 2021, 18:05 |
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Joined: 12/30/15 Posts: 767 Post Likes: +776 Location: NH; KLEB
Aircraft: M2, erstwhile G58
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I can understand, sort of, wanting to get in before prices get even crazier. But airplanes as a store of value and/or an inflation hedge, not so much.
Inflation will take a bite out of GA as well. I seriously doubt that fuel, maintenance, hangar rents and other things aviation will be immune if we get serious inflation. The price of that stuff will go up as well, and while some parts of GA are price inelastic, others will show the signs of price/demand elasticity. Inflation provides some artificial growth in revenue, profits, etc. but ultimately has a very negative effect on real economic health.
If we get James Earl Carter style stagflation, zero to no economic growth, coupled with inflation, all bets are off.
Be afraid when everyone else is confident, be confident when everyone else is afraid.
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Post subject: Re: Buying a Jet Posted: 06 Jul 2021, 12:39 |
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Joined: 11/06/20 Posts: 1604 Post Likes: +1679 Location: Tulsa, OK - KRVS
Aircraft: C501SP
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Inflation or Deflation is the question right now. There are very smart people making very persuasive arguments on both sides. I don't know how it will come out in the wash. I am hedging higher fuel prices w/ a generous amount of investment in oil company stock  We went ahead and pulled the trigger because we found the right plane for us. While there will probably be a shake-out in the next year or 2, we didn't want to miss out on that time with a more capable aircraft.
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Post subject: Re: Buying a Jet Posted: 06 Jul 2021, 12:48 |
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Joined: 11/30/12 Posts: 4702 Post Likes: +5297 Location: Santa Fe, NM (KSAF)
Aircraft: B200, 500B
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Username Protected wrote: What happens when the RE market tanks again and the DJIA pulls back, both of which will, happen sooner than later?  If you have the crystal ball that tells the date of the pullback, let us know! I was hearing this last year before I went plane shopping. Since then I've flown 300+ hours. I'm not going to comment on the value of the aircraft since I plunked money down, but the 300 hours gave me a LOT of value - both financial and emotional. Life's short. You can forever wait on the sidelines for the next crisis (there's always one coming) or you can head out onto the field, plow forward, and take a few hits.
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Post subject: Re: Buying a Jet Posted: 06 Jul 2021, 14:19 |
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Joined: 01/17/21 Posts: 92 Post Likes: +42
Aircraft: C550
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Username Protected wrote: What happens when the RE market tanks again and the DJIA pulls back, both of which will, happen sooner than later?  If you have the crystal ball that tells the date of the pullback, let us know! I was hearing this last year before I went plane shopping. Since then I've flown 300+ hours. I'm not going to comment on the value of the aircraft since I plunked money down, but the 300 hours gave me a LOT of value - both financial and emotional. Life's short. You can forever wait on the sidelines for the next crisis (there's always one coming) or you can head out onto the field, plow forward, and take a few hits.
I agree life is short burn the candle at both ends till it meets in the middle.
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Post subject: Re: Buying a Jet Posted: 07 Jul 2021, 10:15 |
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Joined: 12/30/15 Posts: 767 Post Likes: +776 Location: NH; KLEB
Aircraft: M2, erstwhile G58
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Username Protected wrote: Inflation or Deflation is the question right now. There are very smart people making very persuasive arguments on both sides. I don't know how it will come out in the wash. I am hedging higher fuel prices w/ a generous amount of investment in oil company stock  We went ahead and pulled the trigger because we found the right plane for us. While there will probably be a shake-out in the next year or 2, we didn't want to miss out on that time with a more capable aircraft. Inflation consumer goods and necessities. Deflation non-income producing assets. Real estate cannot go up forever. In the past several decades, growth in real estate prices has consistently outstripped grow in both GDP and average income. Also, commercial real estate, both retail and office space, will be a long time in recovering from COVID impact. If this happens, will be the worst of both worlds. Increasing cost of every day life. Expensive, long lived assets under water relative to most recent price paid and debt incurred. Whatever happens it will be both interesting and painful. Growth in money supply has far outstripped growth in real GDP. Cannot end well. But point well taken on the advantages of more capable A/C in the meantime. Potentially interesting historic corollary.... Spanish flu epidemic and resulting hit to economy, followed by Roaring Twenties... followed by Great Depression and Wall Street Crash. Does this pattern look ominously familiar?
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Post subject: Re: Buying a Jet Posted: 07 Jul 2021, 12:14 |
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Joined: 04/26/13 Posts: 21596 Post Likes: +22121 Location: Columbus , IN (KBAK)
Aircraft: 1968 Baron D55
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Username Protected wrote: Is there a ball park number on when to rent as opposed to when to buy in terms of hours of use?
I realize there are many variables, but generally speaking.
Like, less than 200, rent. More than 200, buy?
I apologize for the ignorance of my question. Just looking at the rough numbers for me, the break even is around 100 hours vs what the local twins are going for. The benefit is in the condition of the equipment, its features, and its availability. More than 100 hours it swings in ownership's favor. I don't know how it scales for a single, but the math is fairly straightforward. You need to figure out what your fixed and hourly costs are going to be and then plot the combination out against hours.
_________________ My last name rhymes with 'geese'.
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Post subject: Re: Buying a Jet Posted: 07 Jul 2021, 12:24 |
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Joined: 05/23/13 Posts: 7814 Post Likes: +10201 Company: Jet Acquisitions Location: Franklin, TN 615-739-9091 chip@jetacq.com
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Username Protected wrote: Is there a ball park number on when to rent as opposed to when to buy in terms of hours of use?
I realize there are many variables, but generally speaking.
Like, less than 200, rent. More than 200, buy?
I apologize for the ignorance of my question.
It's just that seeing that commercial for BAJ run so often makes me wonder. Generally about 100 hours seems to be the break, obviously it depends on the aircraft and if you want to retain possession.
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Post subject: Re: Buying a Jet Posted: 07 Jul 2021, 12:28 |
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Joined: 04/26/13 Posts: 21596 Post Likes: +22121 Location: Columbus , IN (KBAK)
Aircraft: 1968 Baron D55
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Username Protected wrote: Thank you, but I'm taking turbines. I've gotta believe that's a different game.
What prompted my question was the thread started by Chase, and that incessant BAJ tv commercial. TV time costs money so they must be making it. Same calculations apply, just multiply by a bazillion. For a jet the fixed expenses are much larger. You have all of the usual (hangar, insurance, inspections, etc.) except that all of those are more expensive, and you also have recurrent training, and payroll (if you have a pilot). There will be a break even, obviously, because yes those operators like BAJ are making a profit along with a good margin, but there's also the aggravation factor that goes with your own plane, so how much is it worth to you to just show up and go vs having your own?
_________________ My last name rhymes with 'geese'.
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