Archive for category Advice
So we have determined the cost of the flight training, we know what to look for in a promising flight school and we are aware of the dangers of taking out a student or personal loan to pay for that training. So how do we exactly pay for flight training on the salary that I make? Well, I don’t know how much you make and it doesn’t really matter. These four principles will work for anyone whether they have a decent salary or not.
Principle #1: It is only for a short period of time
Maybe it is because of the American culture we live but we always want to have whatever it is now and can’t seem to wait for when the time and finances are right to move in that direction. If you can realize that this short two to three year expenditure is for a short period of time, it will help you swallow the sacrifice you need to make now to cash flow your flight training. National talk show radio host Dave Ramsey said it this way once: If you will live like no one else right now… later you can live like no one else.
Principle #2: Make a Budget
If you don’t know where you money is going, it’s hard to keep it from wandering off. Dave Ramsey constantly says this: you have to make your money work for you and when you make a budget, it will feel like a raise. If you need help on making a budget, go to Dave’s website and he can show you how to make one.
If you tell your money where to go before the month starts and stick to that budget, you may find that you have more dispensable income than you realize. It will also force you to see how much money you truly waste through out the month on those things that you got to have. You know what I mean, I like to purchase DVD movies. The money I used to spend on those DVDs could have been used to help pay for my flight training.
Principle #3: Save up some money for training before you start
What would it be like if you had saved half of what is needed for each certificate or rating before you started. Not only could you continue on your training course but you can be working hard to keep up a certain amount of cash flow available for those long (and expensive) cross countries and the cost of the practical test.
Principle #4: Work, Work and more work
No. There is no pill to take or magical saying that will allow you to pay for your flight training costs upfront. Researchers are finding out that working during your education can potentially improve your grades and effectiveness at learning the material. Dave Ramsey answered a question like this on his show. I worked hard during my years in flight training putting in 25-35 hours a week, going to college (besides flight training) full-time and volunteering at my church 15 hours a week. I probably could have done just a little bit more, cut back on the volunteering and paid cash for my formal and flight education. Like I said earlier, it is only for a couple of years. Some may say that isn’t wise. I say, if I had no student loans, how much more effective can I be now as a volunteer at my local church? How much more could I give to support the ministry they do?
A second job may be in order here. If I wasn’t so busy with everything like school and flight training then that would be a good idea, you say? Well, it is only a couple of years and you will be forced to manage your time better to get everything done. The second job doesn’t have to be rocket science (though if it is, why are you wanting to fly for a living… just joking). The job can be a waiter/waitress at a popular restaurant on the weekend or it can be delivering pizzas. How about going around the neighborhood and doing some yard work or housework in the evenings for you neighbors. Do you think they will pay you for that? Get 10-15 neighbors and you can easily get an extra $1000-1500 a month (translated into $12k to 18k yearly). Did you know the average pizza delivery guy will make around $1000/month. That is a lot of flying time. But not only that you would be saving yourself the interest on that loan you would have taken out. This really means that your second job could give you a total value of almost $3,000 a month.
What about finding out who cleans the doctor offices and office building and working there at night. A couple of hours a night, can bring in a lot of cash. Whatever it is that you are good at, try to monetize it to pay for the flight training. In the end, when you are 10 years down the line, you will see that it really is only a short season in your life.
I am sure these ideas will translate into different areas of your life as well. If you have student or personal loans, you can work like crazy to pay them off. Get on a budget, stick to it and work very hard and one day you can say you are debt free and on your way to a wealthy life. My wife and I are following Dave Ramsey’s principles and are well on our way to quickly making our debt vanish. (It is only a season). As Dave would say, we are living like no one else so later we can truly live like no one else. Perhaps, you want to join my wife and I on our journey? Start with Financial Peace University by Dave Ramsey.
those who borrow are slaves of moneylenders.
– Proverbs 22:7 (CEV)
If you have read the previous two blog posts on this subject you may have sensed that I no longer agree with taking out a student or personal loan to pay for… well… anything. Did I take out a loan? Yes, and I am paying it back as quickly as I can for more than 10 years now. If I stick with the minimum payments, they will be fully paid back in another ten years and I would have spent almost double what I originally paid for the training… in interest.
I have a lot of friends who have loans they used to get through the flight training as quickly as possible and they are no better off than a couple of my friends who cash flowed their own training. They are no farther along in their career; they are not making any more money.
It is true that these select smart friends who paid cash for their training spent longer in the training process and may have had to relearn some things but they weren’t missing out on anything. These students paid more upfront for their training costs than I did but they have no interest to pay. Which one had the better deal?
Getting a loan to pay for school is really quite simple. Most small flight schools now offer applications students can use to apply for such a student loan specific to aviation. Typical student loan details will include a low-time variable interest rate of 6.8% and approximately 20 years to pay back such a loan. (Info taken June 2012). If we were to take out a loan for $41,000 (the average cost of flight training) at 6.8% interest with a payoff of 20 years. The numbers would be to the right. The interest for each year is what you can expect to pay in January of that year and not the whole year.
On the average, it should take approximately 2 years to earn your commercial license and flight instructor ratings. If we were to take out this loan, we can see that we will be paying just over $5,000 and just over $2,000 in principle. In total over the two years, you will need to come up with $7,000 which is 1/6 of the total flight training cost.
Is it possible for a flight student to come up with $7,000 over two years to stay current on this student loan? I would say so. But imagine paying cash for the flight training over the course of three years instead of two years. In this situation, the student will need to come up with $14,000 a year or four times what they need to cover the loan. Is this possible? It really determines on how much you want to get through the school without financial aid. It will take a lot of work but I believe that if you set your heart on getting through flight training without loans you’ll be able to do it.
Take my advice, I would have done whatever it took then to not be paying back my loans now. If I only knew. Hopefully, you can make a different decision than I did. Please, don’t get me wrong. I don’t regret my decision back then… on the contrary I thought I was doing the smart thing. I just didn’t have all the numbers in front of me like you do. If you want to get through flight training with the least amount of cash expenditure, taking out a loan to pay for it is not the answer. Hard work and a budget is!
How are you supposed to know which flight school is the right school for you? What are some of the things that need to be examined to help you make an informed decision? This decision should not be taken lightly as the school you choose will be more than happy to collect tens of thousands of dollars in rental rates and fees for instructor time. The average cost of a private pilot license in 2012 is roughly $12,000; an instrument rating will cost an additional $8,000. After that, time building will cost +/-$15,000 and the commercial license will be +/-$6,000. A total of about $41,000 will allow you to accumulate just over 250 hours of flight time (you’ll need another 750-1000 hours to be competitive in the job market). All in all, aspiring to be a professional pilot is a difficult and expensive process but can have a fabulous return on investment. In the very least, we know that choosing the right flight school can save you thousands of dollars and should not be taken lightly. Here are some things to look for:
First impressions (stick with your gut!)
I firmly believe that first impressions can say a lot about the flight school and the way they run their operation. When you drive up to flight school, does the building look well maintained? If they don’t take care of an appreciable asset (like a building) or make sure that the landlord takes care of it, what does it say about the airplanes you are going to entrust your life to? When you walk into the building is the office area clean and free of paper and other clutter? Is there a board on the wall showing the status of the airplanes maintenance schedules? Are the employees friendly and able to answer your questions? If there is any uneasiness in your mind about the school during your initial visit, your best bet is to walk away and find a new school.
Get a grasp on the billing practices of your prospective schools
Ask the school receptionist about the billing policies. Do they prefer payment as services are rendered or do they expect you to place money on deposit for your future training? Most schools offer block time, meaning that if you pre-purchase a block of hours on the aircraft the school will give you a discount. This is both fair and reasonable. What is the policy on asking for your unused funds back? It is NOT reasonable to ask the student pay the entire cost of the program up front. Some flight schools did this in the 2000s and later went bankrupt and hundreds- if not thousands- of students lost a lot of money and the owners walked away with a quite a bit of unearned cash in their pocket. The “upfront payment policy” is never a good idea especially since you will be paying interest on the money that is sitting on deposit with the flight school. If they insist on payment up front for the entire program, no matter what they say they can offer you… RUN AND DON’T LOOK BACK. Otherwise you may turn into salt.
Get the details on your prospective flight instructor
Ok, let’s get into the details. Ask to talk to your prospective flight instructor and ask her/him what their record is in passing the FAA practical tests. What you are looking for isn’t a percentage, although higher is better, but a willingness to speak truthfully about oneself. You should be able to quickly spot someone who talks the talk but can’t walk the walk. Ask them what their student’s pass rate is overall and then over the last two years? You are looking for a CFI who is willing to learn and improve their teaching craft and an improved number will show you that. (When I finished teaching full time, my pass rate was much better than it was in my first year.) Ask them what cross country trips they have taken. What you are looking for here is their ability to cope with real world situations and not just training area situations. It is one thing to have book knowledge and another to have street smarts or practical knowledge.
Ask your prospective flight instructor how many hours they currently have flying and what their plans are in the next year or so. Most instructors, though definitely not all, start teaching to build hours and when they hit the magical 1000-1500 hour mark will leave for a “real” flying job. Then there are other instructors who enjoy teaching and have decided to make it their career. It is this second instructor that you need to find although they may charge you a bit more for their time. If you get a good feeling about the instructor. and they look professional and smell good (this is very important as you will be spending hours in close contact with them) then continue on to the airplanes.
Take a preflight on your prospective instructor’s teaching style
Have your prospective flight instructor show you the maintenance manual for the airplane and make sure they point out the required sign-offs that make the airplane legal to fly. If they are not willing to show you the maintenance manuals, better walk away while you still can. If things are fine, have them walk you to the airplane and perform a preflight inspection. During the preflight, you are looking for their attention to detail and whether or not they are willing to skip over items they have checked many times before. You are also looking for their teaching style and asking yourself if it is compatible with your learning style. During this time, you are also seeing if they are truly a teacher or someone who is just building time. A true teacher, revels in an opportunity to teach something to someone. (I do. I find it exhilarating.) Answering the “why” behind a preflight is important concept to pass along to a learning pilot and the instructor should take the opportunity to teach you. If they sufficiently explain to you why a preflight inspection is important and they have great attention to detail, you can be almost certain they will have the same attention to detail about your training and just as importantly, your flight time and billing records.
If you’re interested in an instructor, check out their references
Ask the prospective flight instructor for phone numbers of previous students you can call as references. It may take a couple of days for the instructor to get permission from their students for you to call since this is not a widely used concept in the industry. That is fine but make sure they follow through. Ask the previous students what they thought about the instructor both good and bad. Were they on time? Professional? Did they smell good? Do the instructor’s previous students feel they were fairly charge them for their time? Were they willing to forego a lesson when the weather was poor or the flight objectives could not be fulfilled due to airplane equipment problems? Did they have a backup plan, in case the airplane wasn’t available? Did they emphasize the ground learning as being more important than the flying portion? Those instructors that just want to build time will not be interested in teaching the ground material.
Certificates of Appreciation
When you leave, pay them for their time. They spent valuable time answering your questions and you should be quite appreciative. Give them some certificates of appreciation with president’s faces on it. Twenty or thirty dollars should be just fine depending on the time you took with them and what they charge. This does two things for you:
- Lets the instructor know you are serious about flight training. As a result, you may even get preferential scheduling from the instructor.
- Lets the instructor know that you value his/her time and your time as well.
Notice something, I didn’t mention anything about instructor rates or aircraft rental rates. These are the lowest decision point, if two potential instructors are viewed the same, it may be wise to choose the instructor who can offer the lower cost (although, I doubt that will be the case). If the instructor rate is higher than reasonable, I would ask the instructor why that is. Perhaps they specialize is a certain area of teaching so feel they can charge that much. The same with the aircraft rental rate. I think you will find that most schools in the area price each other out and keep their rates relatively the same.
Big universities versus smaller local flight schools
All of this leads me ask the question: Is going to an aviation university better than going to a local school at your airport? Most major aviation schools will cost upwards of $100,000 for those same hours mentioned earlier (usually, two to three times more expensive than training at a local flight school). The only added bonus is getting a college degree in an aviation related field. But, take me as an example: when I was pricing out flight schools, I went to a well known school for a tour and learned the cost to be upwards of $100,000 in 1998. I decided to attend a local community college to accrue the flight hours I needed and was able to earn an associate’s degree from them. I later went back to that same aviation college (they have campuses all around the world) to earn my bachelor’s degree. In the end, I spent $50,000 for the exact same experience and degree and even more in the process. A lot more for half the cost is quite good deal and goes a long way on getting a better return on your investment. A bit of hard earned research will go a long way in saving you thousands of dollars in training costs later on. Sacrifice now to gain later.