[danielhv]

Im getting enough back on my tax return that I was going to initially put it towards my truck which would shave a whole year off of my payments ( I currently owe 2 years left)... But then on the other hand, I'll have enough to buy the full Avery toolkit and the tail section for a 7A.... what should I do!?!

 

[Radomir]

I love these no-brainers Start building... you'll end up wondering why you hadn't started sooner

good luck.

 

[mdredmond]

Hmmm. Do you want "financial advisor" advice or RV builder advice?

Financial Advisor: If you don't have an emergency fund of 4-6 months of expenses, save the money (don't use it to pay anything off or down); otherwise, pay the money toward the highest interest debt you're carrying. If that's the truck, fine. If it's a credit card(s), pay them instead of the truck.

RV Builder: Buy that tail and toolkit. If you don't, who knows when it'll happen? One day you'll wake up dead (or some say worse, without a medical) and you'll have missed your chance.

Inasmuch as I'm a builder not a financial advisor, I say build the plane.

 

[danielhv]

Hmmm. Do you want "financial advisor" advice or RV builder advice?

Financial Advisor: If you don't have an emergency fund of 4-6 months of expenses, save the money (don't use it to pay anything off or down); otherwise, pay the money toward the highest interest debt you're carrying. If that's the truck, fine. If it's a credit card(s), pay them instead of the truck.

Sounds like somebody here listens to Dave Ramsey!

 

[RVbySDI]

got to agree

Hmmm. Do you want "financial advisor" advice or RV builder advice?

Financial Advisor: If you don't have an emergency fund of 4-6 months of expenses, save the money (don't use it to pay anything off or down); otherwise, pay the money toward the highest interest debt you're carrying. If that's the truck, fine. If it's a credit card(s), pay them instead of the truck.

RV Builder: Buy that tail and toolkit. If you don't, who knows when it'll happen? One day you'll wake up dead (or some say worse, without a medical) and you'll have missed your chance.

Inasamuch as I'm a builder not a financial advisor, I say build the plane.

I have to agree with Matt on the financial advice.

You have to ask some serious questions when dealing with these type of ideas.

Are you in debt? If so, how much? What are your debts for? Are they large debts like mortgages, student loans, large car payments, etc.?

This is my opinion so take it for what it is worth.

You cannot truly enjoy life until you can get yourself debt free! If you owe everyone under the sun for everything you possess you should take a long hard look at your life goals and evaluate whether you are achieving them or not.

This can prove to be very challenging. But if you do it and be honest with yourself you may find that you are not doing the things you need to be doing to achieve what you want in life.

So, do you buy tools for the RV of your dreams? Or, do you pay off your debts?

I would vote for paying off debts. If you are truly serious about building an RV, because that is your passion, you will be in a better position to do so once you have fewer worries from the rest of your life to deal with. You will have the money freed up to build when you get yourself out of debt.

This is an idea that we Americans have somehow forgotten. Our grandparents lived by the notion of paying for what they needed or wanted when they could. If they could not do so then they did without it until they could pay for it. The notion of delayed gratification takes on a negative connotation in our world today though.

The truth is that being able to delay your build will not hamper that dream of building, owning and flying your own airplane. On the contrary, it will just make your dream that much more special once you are able to achieve it. In the process you will find that all the other areas of your life will be so much more fulfilling too.

In my life it took me 30 years to be able to afford to fly. From the time I was 10 or 12 I had dreamed of flying. But like everyone else, life and the financial challenges of living every day did not allow for it to happen. It has only been in the past 5 to 8 years that I have been able to fulfill my dreams. And that is only because we have been able to live our lives debt free now.

Being debt free has freed up money that would have otherwise gone to all of those people sticking their hands in our pockets who wanted us to pay for their lives.

Ok, enough already!

So you have to ask yourself if you are passionate enough about your dream to go full out for it. If you answer yes, then I say not only pay down your truck, but also pay off every single debt you can. Then once you have it payed off keep it that way. Change your lifestyle. Do you really need that soda that you get every time you fill up at the gas station? Do you really need that extra "what ever it is"? Could you do without this or that? How important is it for you to pay for premium channels on cable? Do I need to pay that extra $50, $60, $70 for cell phone service, internet service?

Well, you get the idea. Look at your life and decide what is really important to you. Once you have done that do whatever it takes to ensure you have the finances to afford to do that. Once you make that decision you will find out how valuable financial freedom is to your overall well being.

Sorry for the long winded response. This philosophy has made a difference in my life so I find I want to share it with others.

Live Long and Prosper!

 

[mdredmond]

I don't want to take the thread too far off the subject of RVs, but I'll add this.

If you are carrying any debt at all and use newly-found funds to buy an RV and/or tools, you are essentially financing the RV at the interest rate of your highest debt. If that interest rate is reasonable, I don't see a problem with doing it. If you're carrying 18% balances on credit cards, I'd come up with plan 'B'.

A plane will probably only be second to your home as far as your big assets go. Using financing as a tool to get that done isn't unreasonable. Not many people will be able to get it done in a reasonable time period without financing some part of it. This doesn't necessarily apply to the "olde pharts" here who are wallowing in retirement cash.


Just don't tell Dave Ramsey I said that.

 

[KirkGrovesRV8]

Hey,
I hate to be a kill joy but Dave Ramsey rocks! if it was not for listening to him I would not have a paid for RV-8 and no payments except our house!!
But I will agree and say get that Tail kit!!

 

[LettersFromFlyoverCountry]

Financial Advisor: If you don't have an emergency fund of 4-6 months of expenses, save the money (don't use it to pay anything off or down); otherwise, pay the money toward the highest interest debt you're carrying. If that's the truck, ut fine. If it's a credit card(s), pay them instead of the truck.

If you've got kids, start building while you still have them as tax deductions. My last one is now too old to claim, and now I owe $2,000. .

The one thing that's important to note at this point: You will be spending a LOT of money between now and the time the plane is finished. You know that stuff that Van's posts about how you can build a plane for $30,000? Yeah, you COULD... but you probably won't.

I've gone pay-as-you-go on this thing and so it's been important to me to carry as little debt as possible in the rest of your financial world. The money you're paying for the truck IS money that could go toward the plane, but since you're not going to pay it off... is there much of an advantage to paying it off? Not that you'll see see for awhile, yet.

The thing is: if it takes a windfall like a tax return just to get the tools to build, what's your plan for financing the rest of it, especially since the tool kits that are out there aren't anywhere near complete enough to keep you from spending several thousand more for the other things you'll need in the early stages of the project.

 

[danielhv]

Well this sucks... Perhaps I am chasing my dreams too early in the game. The only debts I have is my house and my truck. No credit cards, etc... BUT I WILL have school loan debt once I graduate (2 years). guess its a good idea that I posted here first for a reality check.

 

[KirkGrovesRV8]

Don't be dishearted Go for the tail kit just save a little as you go.

 

[Jeff R]

How long will it be before you could start on the wings? What about the fuselage? How long to save up to buy an engine?

If you start the tail kit now, you could have it done in April or May. Then what? Do you sit it aside and wait another year or two for some more ?

You really need to have the finances in place to build the whole thing up front. Maybe you will have to pay off that truck and then take out a loan for the airplane or, as agonizing as it is, wait a few years to let your savings grow. Bummer advice, I know, but I fear that if you run out of money after getting started, you will give up. One thing you might do is work up a financial plan, and then see at what points you will be able to afford new kits, remembering that the kit price is maybe 1/3 to 1/4 the total cost.

 

[Phil]

My advice is to payoff the truck first. It'll make paying for the build a WHOLE lot easier. Then you can keep making your old car payment to a savings account for the plane.

It's been my experience that if you start too early, you'll hate the plane, you'll hate your truck because it's taking all your plane money, and your wife will probably hate the plane too because it's taking the money away from the family.

Just getting the truck out of the way removes a whole bunch of obstacles.

 

[RV7Factory]

Well this sucks... Perhaps I am chasing my dreams too early in the game.

Hold on there! The question you need to ask yourself is what can I do today to put myself in a better position to start the RV in the future. While it may not be actual construction, putting together a financial plan now that will allow you to start the airplane in X months or years is still doing something toward your goal. Plan the flight and fly the plan!

My suggestion would be to get your financial ducks in a row now, which would involve getting rid of the truck payments sooner than later. As much as we all hate to admit it, owning or building an airplane for most of us is a discretionary activity, and I am a firm believer in having your personal affairs in order before you take on what will be a large financial commitment. Just my $.02. Good luck!

 

[lucky333]

Do the numbers, then decide

Some really great advice here.. especially about being debt-free. That's the ultimate freedom for sure. I am, and I like it. I am also totally on board with those who say that you need to build a 6-12 month reserve before all else. But that doesn't mean you can't manage the necessary loans you carry and still RV..

You didn't say where you were on the house or truck notes. Run an amortization table on both. If the notes are new e.g. year one of a 5 year truck note etc. then paying down principal is a good idea since most of your current payment is interest. If you kick in some extra $ towards principal, then you don't get charged interest on that amount for the next N months and your total payout is way less. This method is especially useful on a long term mortgage.. something like +$100/mo on our 15yr note retired it in 11 years saving 4*12*$1600/mo. on the total payout. (Don't slam me CPAs, I'm doing this from memory..)

If you are on the trailing end, i.e. year 4 of 5, then your payments are mostly principal, you've already paid most of the interest and you might as well let it ride. The lenders, you see, get the interest up front..

Since tax time is whistling in, ask your tax preparer-CPA-etc to run the numbers for you. If you do it yourself, TurboTax or likely some website will run the tables for you. I use an Excel spreadsheet.. The object is to run the loan payments with and without the tax refund applied. There will be a $ difference. That's the +/-cost of your tail kit.

Enlightening info here- note how the number of payments i.e. how long the principal (n payments) is in the exponent
http://en.wikipedia.org/wiki/Amortization_schedule
Something else to consider is that shortening the term makes the total payout way less at not too much extra $/mo.


Look at the numbers. Lighten the debt. But don't postpone the dreams too long either..

 

[flytoboat]

Great advice

Hold on there! The question you need to ask yourself is what can I do today to put myself in a better position to start the RV in the future. While it may not be actual construction, putting together a financial plan now that will allow you to start the airplane in X months or years is still doing something toward your goal. Plan the flight and fly the plan!

My suggestion would be to get your financial ducks in a row now, which would involve getting rid of the truck payments sooner than later. As much as we all hate to admit it, owning or building an airplane for most of us is a discretionary activity, and I am a firm believer in having your personal affairs in order before you take on what will be a large financial commitment. Just my $.02. Good luck!

Brad is spot on! My guess is that the main reason most unfinished kits are sold is due to a lack of a financial plan to complete it. (anybody want to do a poll?) I don't have the money in my pocket to complete my project, but I have a viable plan that will get me there. That includes no debt except my mortgage. (Consumer Reports this month had an article that said in most cases it is better to NOT pay off your mortgage)
My 3 cents (for inflation)

 

[RBD]

Priorities and sacrifices...

You may want to sit down and look at the things that you are currently spending your excess cash on. If starting your build soon is really important to you, start thinking about the luxuries that you can cut out. For starters, is this truck that you're making payments on brand new? It is nice to have new things, but do you NEED a new truck? If you were to get a used truck, wouldn't it help you free up quite a bit of money each month (consider insurance in this equation.) For me, the little blue car in my avatar was my absolute pride and joy. Although it was hard to part with, I realized that I could save a ton of money by getting rid of it, and that's exactly what I did. Another thing I gave up was Starbucks. I figured that drinking three drinks a week at $4 a pop added up to somewhere in the neighborhood of $630 per year! Now I'm not saying to nickle and dime yourself in to a boring life, but I bet there are some areas that you can pinch a few pennies. Again, it's all about priorities and sacrifices. If you want something bad enough, you will find a way. All the best!

 

[danielhv]

You may want to sit down and look at the things that you are currently spending your excess cash on. If starting your build soon is really important to you, start thinking about the luxuries that you can cut out. For starters, is this truck that you're making payments on brand new? It is nice to have new things, but do you NEED a new truck? If you were to get a used truck, wouldn't it help you free up quite a bit of money each month (consider insurance in this equation.) For me, the little blue car in my avatar was my absolute pride and joy. Although it was hard to part with, I realized that I could save a ton of money by getting rid of it, and that's exactly what I did. Another thing I gave up was Starbucks. I figured that drinking three drinks a week at $4 a pop added up to somewhere in the neighborhood of $630 per year! Now I'm not saying to nickle and dime yourself in to a boring life, but I bet there are some areas that you can pinch a few pennies. Again, it's all about priorities and sacrifices. If you want something bad enough, you will find a way. All the best!

Yea, Im going to keep the truck only because after throwing my tax return at it, I will be able to pay it off this year (hopefully in August). I have no kids. Just a 26 yr old college student. I'll have school loans to pay off in 2 years. Ive only had my house for 5 months. thats all my debts. My weakness is eating out. Im on the road 10 - 12 hours every day, so its hard to convince myself to make my breakfast and lunch everyday when its so much easier just to grab something. I'd be willing to bet thats where 90% of my spare money goes. Sad but true. Im also slowly trying to finish off my commercial rating and CFI. My main goal is to get that dream job as a corporate pilot or a well paid airline pilot (I know, it doesnt exist! ) So I figure in 2 years, I should have all my ratings, school loans and a house to pay for. Ill concentrate on the school loans and get them paid asap while instructing to build more time. Thats the plan... atleast for today anyways.