LettersFromFlyoverCountry

LettersFromFlyoverCountry

Well Known Member
As many of you know, I'm a proud pay-as-yo-go-er when it comes to RV building. Today, however, I have to write a big check on an account with few zeroes in it. It's time to buy the engine. Well, I actually bought it months ago, but now I have to pay for it. It's ready to be shipped.

I suppose for most builders, by the time this day comes around, you're used to writing checks on loans and home equity. But this is one of those days -- nights? -- when I start to wonder whether I can really afford this thing?

I'll just tell myself airplanes appreciate in value and I'm just transferring the money from one account to the other. Yeah, that's the ticket.
 
It'll be OK

I was dreading that same expense as one of the single most costly aspects of building my RV-9. With the help of a fellow RVer and being able to buy an engine from a friend who had an accident with his Cherokee I am now past that with an all but newly majored engine in the garage. It is a really good feeling knowing everything up to this point is paid for. It is also a big motivator walking by that engine sitting there waiting to be hung on my very own RV.
Hang in there Bob, It will feel good when it quits hurting. :)
 
I'm in the same boat, except perhaps 6-8 weeks behind (my engine/prop won't show up until then). I owe nothing for my project, and strongly believe that the pay-as-you-go idea is the right way for me. Still, this was far and away the most expensive Osh trip for me ever - it's usually only hundreds of dollars, not tens of thousands :).

I like the "transfer it to another account" idea. I think if I repeat it enough, it won't feel so bad....
 
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I console myself with the knowledge that there is a ready market for these items, and if the excrement hits the impeller, an engine, etc. could be posted on the VAF classifieds and probably off to a new home in a couple of days.
 
Been there

It is an awful big check, isn't it? I wrote mine a year ago and I still think of it from time to time. As others have said, it's not really like the money is gone, just in a different form. I figure I could sell that motor tomorrow for nearly what I paid (I think).
 
Bob just be thankfull that you had the funds.... I have been saving for this for a long time. I have a wife and 2 young children, My $42,000.00 for my RV8
Is now a 14X30 Swimming Pool with a full screen encloser. I quess I have to give a little to get a little if you know what I mean.... I would sure love to trade this swimming pool for an RV8 If anyone is interested.... Shipping might be a problem....
 
Bob Collins said:
.....But this is one of those days -- nights? -- when I start to wonder whether I can really afford this thing?
Click to expand...

Is this another one of your reverse psychology threads? :confused:

You only live once Bob. In a few years you'll be in a rocking chair asking yourself why you didn't fly more when you could. I fully intend to burn up my kids inheritance in 100LL, and if you don't start drilling it will be sooner rather than later. ;)
 
Bob,

I am in exactly the same boat. Been paying as I go... $2K here, $6K there, another $6K... Today I got the email that my engine had tested and is ready to ship. I am going to the bank tomorrow to do the wire transfer. I have had the money socked away for three or four years now. But, it still causes one to pause. When we look at the pieces we create/buy the value is hard to see. The "value" for our dollars/sweat will be realized when those pieces come together to make a flying machine. It is the old "whole is greater than the sum of its parts" thing.

When my engine arrives I expect to open the box and think that for what is in this box I could have almost had a swimming pool :) (heat index has been near 110 here for the past couple of days so I've been thinking about swimming pools a lot). But, in the back of my mind I know it is another big step on the journey. Next will be a couple of big avionics checks. After that it will be back to $4K here, $6K there, $2K over there...
 
I quess when I get hot in the shop bucking rivets on the emp. and can always go fly the pool and cool off....... 108 degrees in the shop today!!!!!!! I love my steel building,, I love my steel building,,, I love my steel building
 
Another vote here for pay-as-you go. I've spent the last handful of years building up a small side business and it's now turning me about $20k after taxes per year for only a couple weeks work. I've got a lot of money invested in the equipment, and this summer I finally paid off the bank note on everything - it's free and clear. Now I'm looking at the decision of whether or not I keep the business. If I keep it, it will pay for the airplane. If I sell it, it will pay for the airplane. Either way I'm good with the results. It's a nice feeling, and keeps me cool when I'm in the 100-degree shop deburring #40 holes. I promised my wife we wouldn't borrow a dime for this plane, that way any hiccups in the job market can't bring the project to an unhappy end.
 
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Just getting started but we are budgeting the -10 as a pay as we go.

For us, it is the way to go. Let's the project be fun without a big weight hanging over it.
 
What ya going to do Bob? Swallow your change when you die? Get up there and write that check, so what if the wife limps a little. Need to get your priorties straight.

Ha, I know it's a big check, but you knew it was coming. Just do it!
 
Pay as you go

We have been pay as you go and it has been more painful than I thought it would at times. However, there is a bit of light at the end of the tunnel! Oh wait!! That's Stein with an LED map light beckoning me and my checkbook for the last big hit! How does he say it? "We won't be happy until you are broke!" ?:eek:
Better hurry Stein, before Mary spends it on the house!:D

Seriously, it will be really nice to own the whole thing when it is done.
 
same here

My RV-7A has been a pay as you go project just like yours. Started in 2001 and should/could/may be flying in a month and a half or so. Bought my engine, not new but a zero time rebuild, a little less than a year ago. Went with a very basic but safe VFR panel just so it wouldn't take another year to save up for the expensive electronics. I am currently painting the plane so the end is in sight.

Keep at it, you will be glad you did it this way. It is a great feeling knowing my plane is actually mine.
 
pay as you go engine

I'm on the pay as you go plan, and that includes the engine. Looks like my field-overhauled (by me :)) 0SMOH O-320 will cost just under $10K with new accessories when its done, and I'm spreading that out over more than 1 year. Biggest chunk will be 4 new cylinders... Ow...
 
Bob Collins said:
As many of you know, I'm a proud pay-as-yo-go-er when it comes to RV building. [...]

I suppose for most builders, by the time this day comes around, you're used to writing checks on loans and home equity. But this is one of those days -- nights? -- when I start to wonder whether I can really afford this thing?

I'll just tell myself airplanes appreciate in value and I'm just transferring the money from one account to the other. Yeah, that's the ticket.
Click to expand...

Hah! In June I ordered QB Fuse and didn't blink a eye when doing it. When ordering tail a years ago it was big thing. Ordering wing was as well but you (probably even too well) get used to it. Here and there goes $100 and $1000... I was extremely disappointed when I received my last order with some stuff like pitot tube and pitot holder. Did I really pay that much for such small items?! I though they would be at least twice bigger but they look like they belong to model or something.

Haven't talked with my wife much about this and she even really haven't been keen to know how much this project is going to cost. She knows that further I get the more expensive the project comes and costs doesn't stop when building is finished. So I don't get too much hurrays from there but not too many questions either. About a month ago I did had to show her some numbers...

Can afford? At time I did choice to build RV I was thinking that with that money I could fly ATPL. Then I would become a pilot who could afford the RV. Ok, you sure know how career can ruin hobbies so my choice was clear: let's build it, it will be ready sooner and I'll have this hobby in years. I probably get flamed for this as there are many people on this forum which are professional pilots and still have flying as a hobby. However from the people I know personally the hobby pilots which has became airliner pilots has never continued their hobby as it was before flying became their job. But to the original question: some choose to build big houses, drive new big cars etc. I choose to stay on aviation and will build the RV.

If you think that the engine was too big cake, why didn't you order it part by part and build it? :D
 
pay it forward!!

Bob,
Don't stress. Pay as you go was the ONLY way I could do it. I am an auto mechanic, and not floating in bucks. Figured on 60K, ended up costing more. You know how that story goes. Plane flew 2 weeks ago, no issues. Almost like seeing your kids being born. The value is on the ramp, worth every penny I have in it and more, and I finally have a plane that I can fly anytime I want to. I don't think I will ever get tired of answering "yeah, I built it!!"
Bottom line...great stuff is soon to come!!

Hang in there...
Chris
 
It's worth it

Keep at it Bob, I started my 7A in 2002 as a pay as you go project, I got my Pink slip July 5th 2008. It's a great feeling knowing that it's all paid for I don't have to make a dreaded monthly payment, Just means that I will have more money every month to spend on Avgas!! On a side note though the pink slip is a month old and still no first flight to report, I'm having some mag problems.

Just pay the money, it'll be worth it.
 
Just to be clear. My point was that THIS is the part where I go into debt on the plane. No way, was I able to save up $24,000. Home equity.

Debt just takes some getting used to, I guess.
 
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Thanks for the clarification. After I reread it, it made sense.

I am early on in my project, and trying to talk my wife into a second job so I can stay at home and work on the plane, and be able to afford an engine in a few years. Somehow she is not biting on that idea.:eek:
 
Still don't know how I'm going to pay for the engine and avionics. One day at a time...

Thinking about it as "moving money between accounts" is great. Looking at my TOTAL debt picture, I'm only $2500 further in debt than I was when I started building the airplane, and the dollar-meter on my build log says I've spent $12,400 on the project so far...
 
my wife is a Airbus Captain for the airlines and they are cutting hours back instead of shipping pilots out.... Pay as you go is the only way for me...
I can't see going into debt to do this RV8. I build Custom Hot Rods, I just try to take a little money from each job and put it into my RV8 account. Now with the cut backs from her the RV8 money is going to the household fund!!!
 
CNEJR said:
What ya going to do Bob? Swallow your change when you die? Get up there and write that check, so what if the wife limps a little. Need to get your priorties straight.
Click to expand...

First out-loud laugh of the day. As we get older and the responsibilities pile up, we hear such comments less and less and it's a shame. Sometimes you just gotta remind yourself that you really can't take it with you. Write the check!
 
Bob:

I did the pay-as-you-go thing myself. That check hurt. The biggest check I've ever written (other than my down payment on my house).

That pain is now just a distant memory, I'm 31 and own my airplane outright. I think the cumulative effect of cutting monthly checks for an airplane loan would hurt more.
 
iginally Posted by CNEJR View Post
What ya going to do Bob? Swallow your change when you die? Get up there and write that check, so what if the wife limps a little. Need to get your priorties straight.

Now thats funny!....You wanna be my accountant?


Debt just takes some getting used to, I guess. Bob, every man woman and child in America is in debt to the tune of 455k-700k each depending on who you believe. And it will never be paid off! Here's why:
video.google.com/videoplay?docid=-9050474362583451279

Another 24k is nothin. At least you'll have something tangible to show for that payment.......start writing, I'm right behind ya:D

Robb-7a
fiberglass funsville
 
Great Approach to Funding

Brent Humphreys wrote, "I am early on in my project, and trying to talk my wife into a second job so I can stay at home and work on the plane, and be able to afford an engine in a few years. Somehow she is not biting on that idea." :D

Whoa! I love this forum!
 
My general idea is to just keep the cars running and use the money I'd pay on loan payments for cars for the engine instead. My wife's car was paid off in May and my plan was working great until, ummm, July when my 2004 Chevy Cavalier needed new brakes and a bunch of other stuff to the tune of $1,300.

Sometimes, plans stink. :D
 
Precious Metals

I like to think I am investing in precious metals, aluminum, chromoly, etc...

Besides, if you are like the rest of the country, home equity is evaporating, and you are just moving assets from one losing account into one that at least keeps its value - At least trying to believe that works for a while anyway.
 
Cash all the way

Just another vote for pay as you go:)
I promised my wife I would not borrow money for a toy, Paid for the whole airplane one piece at a time. And just now after two years of flying is it getting painted. I can't wait!!:D
I just wanted to put this out there as a vote of encouragement for others, my wife and I are huge Dave Ramsey fans and it can be done:)
Its great to drive out to the airport and have a paid for plane in the hangar
 
Is there anyone else out there who downright doesn't know how or where the money is coming from? I have a bunch of ideas of where it could possibly come from, but how knows...
 
I viewed it as a form of flight planning. I decided I wanted an RV, so I went and married a pre-med student. Sure enough, when I was ready to buy the expensive stuff, I had a doctor to pay for it. ;) She's an anesthesiologist, so the removal of the arm and leg was fairly painless... :eek:

Humor aside, we didn't blink at the major checks. But the constant trickle of finishing bits is getting too me. A few small parts here, an instrument check there, more primer, seat belts, airworthiness inspection... At the time I wrote the check for the prop, I was about at my stated budget. Now I'm a couple grand over and climbing. The doc is beginning to wonder if I've found a clever way to supplement my allowance; she doesn't believe it's all going to the RV.
 
SteelMike said:
Is there anyone else out there who downright doesn't know how or where the money is coming from? I have a bunch of ideas of where it could possibly come from, but how knows...
Click to expand...

Not necessarily the where it's coming from part. I am working our budget so that we are able to have the cash by the time we start getting to the big ticket items. The tough parts are adjusting our spending to have that much extra, and knowing just how much to set back.

I haven't put myself on a schedule for the build. I enjoy the work, and setting arbitrary deadlines will add pressure. Once I get the empennage done I will have a good idea of my rate of progress, and I can start projecting when I will get to milestones.
 
What's a budget?

Fortunately, I have a good paying job and few - if any - financial obligations. It's going to be a wild ride, though...
 
For me it's less a question of paying cash or borrowing than it is a question of what's the smartest solution to the problem.

Paying as you go is great, but if it comes at the expense of saving/investing I am not convinced it's the best way to go. If you can earn money with investments and can potentially write off interest, the smartest solution may be to borrow. Only the #'s will tell you.
 
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Yea I know :(, but therein lies the problem with most people's belief about investing.

Sure, my investments are in the can this year too, but that only matters if I am selling now. If I am buying now, and I am, then each dollar I invest has more buying power.
 
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RV7Factory said:
Paying as you go is great, but if it comes at the expense of saving/investing I am not convinced it's the best way to go. If you can earn money with investments and can potentially write off interest, the smartest solution may be to borrow. Only the #'s will tell you.
Click to expand...

Using that logic, I should go take out a HELOC on my house and invest it all in the market.

If I want a tax deduction, I can give the same amount of money to church or charity instead of giving interest to a bank. That is if I am going to spend $10,000 to get a $3,000 tax deduction.

This is all very personal on an individual basis. For us, the analysis of the situation comes down to the fact that there is no amount of debt that is acceptable for a recreational project such as this.
 
this has been a really intersting thread, the kind of topic thta it would be great to have sititng around a campfire at Oshkosh. Next week in the Hotline, I've got a feature about this, coincidentally enough. There are so many fascinating ways that people have approached their projects. Like the building itself, there's no "right" or "wrong" way. It's very much what fits the personal nature of the builder and his/her family.
 
RV7Factory said:
I did not say that, so don't put words into my mouth.

That was my point Brent, it is a personal and individual. You crunch your numbers and I'll crunch mine.
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Sorry, I did not intend to put words in anyone's mouth. My point, and I tried to make sure I was pointing out that this is for our situation, is that if I try and use a tax justification as though it were an actual benefit, why wouldn't I maximize that benefit?

I really am not trying to criticize anyone's point of view, just expressing my own. I don't have all the answers, I have made plenty of mistakes with money in my lifetime, and all of them involved debt.
 
I paid for my Interstate restoration with my pay from the Air Guard, all pay as you go. Since it was an extra job, I felt no guilt about spending the money on my toy.

Now that I am fully retired, there is no extra pay coming in and we vowed in 1969 to make no more payments on anything other than a house, so no loans on the project. It will soon be time to sell the Interstate to get the money to finish the RV. I'll be sad to see the old plane go, it is my first plane, it won awards and it flies really well. But selling it will cut my costs and give me the cash to finish the RV.
 
BrentHumphreys said:
Sorry, I did not intend to put words in anyone's mouth.
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Brent, it is I that should apologize. In reviewing my last post I sound, well... snippy. What I was attempting to clarify in my very hastily crafted response was that I wasn't recommending that approach (borrow to invest). In general, I agree with you that cash is king, however there may be certain circumstances or situations where a loan is advantageous.

I'm sorry if I came across brusque, hard as it is to believe it wasn't my intention. :eek:

As far as mistakes... yup, been there done that!!! ;)
 
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Go Into Hock

By the time I started building, I was 57 years old and already slowing down. I have no idea how long I will be able to pass a medical exam. While I enjoyed building, my passion was to fly while I was still healthy enough to enjoy it.

The airplane cost a lot more than it would if I had paid as I went. In each case I opted for items that made the aircraft safer, more efficient or more valuable. All new components, glass cockpit, electronic ignition, Emron paint. I don't regret any of it.

I used cash and juggled credit cards to get through the first few years, but buying the engine made a large dent in my credit lines. I opted instead for a home equity loan to get lower interest, tax deductibility and ease of management. Since we have no other debts and still have plenty of equity in the house, this makes sense for us.

My wife and I already have most of our retirement savings in place and continue modest savings. If I had continued on pay as you go on the airplane, it might not be finished for another five years. I would rather pay the interest than miss out on what may prove to be some of the best years of our lives. We travel extensively in the RV-9A and it is now our primary out-of-town vehicle. Every time we see on the news about airline problems my wife says "I'm glad I have my own airline".
 
The Down Side?

Regardless of how you acquire the money paying is the down side. As Tom Muller describes his process and motives, some have reached a point in life when they start that they have options. Sometimes I think it is better to not rush in as part of a group emotion and be sure that you really want to pay the cost (not just money) to create this airplane. The wait can help you get your priorities straigntened out and slow progress gives you the opportunity to focus on details to get them as good as you possibly can. Things that come fast and easy are often left beside the road as an uninteresting memory as life goes on.

Bob Axsom
 
poor me!

Interesting thread. One thing all you guys have over me is you are flying or gonna fly RV's - which is what I really wanted to fly. I was initially gonna build but didn't for a whole bunch of reasons, not least of which was that I wanted to fly NOW. Then I "bought" a nice RV6A only to have the seller pull out on me. Finally I bought an Archer II outright. Cheap maintenance and overhead. 4 places. Blah, blah, blah. Nice plane in it's own right but now it's a big deal to part with a plane I own free and clear to dive into a mountain of expense again to get into an RV. Oh well....maybe someday. Anyway, maybe it makes you feel a little better knowing that I envy you guys!

Steve
 
I have a similar situation. I have a few parts of a plane in my shop, but nothing else to fly.

I can't find a rental, partnership, or anything IFR capable within 2 hours drive. The only hint I have had of a partnership is an older 172 that I am not wild about.

Now I am in search of an aircraft to fly while I am building. I suppose I will fly it until I need the funds for an engine.
 
Bob Collins said:
Just to be clear. My point was that THIS is the part where I go into debt on the plane. No way, was I able to save up $24,000. Home equity.

Debt just takes some getting used to, I guess.
Click to expand...

Think of your plane as a big piggy bank that's partially filled with that equity plus the remaining investment in the plane. Most of us regard our home equity as part of our retirement nest egg. By the time you're ready to retire that loan and the house will be payed off and the equity you borrowed will be a bonus received back when you inevitably sell your plane. Aside from the interest you're paying the bank you're really borrowing the money from yourself as long as you plan to stay in your home. You probably won't get much interest for your investment in the plane, unless the pure enjoyment does it for you, but you will get it all back and maybe a little bit more when it comes time to sell, as long as you take good care of your plane.

How many of us have sunk enormous amounts of money into a pastime or endeaver that just seemed to evaporate into the ether? An aircraft doesn't have to fall into that category...but do be mentally prepared for that possibilty for any number of reasons completely out of your control - like just about everything else in life.

Plan to be a little more concerned about looking at your fuel bill, hangar rent, insurance...

When all is said and done, it's those day to day costs that have the biggest impact on the decision to stay in this vocation. Up until then, you're just throwing your money into a big aluminum sock in your underwear drawer.
 
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Opportunity costs

Even the pay-as-you-go crowd (of which I am one) cannot claim that our aircraft cost us nothing since they own it outright. And I am not refering to the fixed expenses like hangar, insurance, etc. There is an opportunity cost associated with our investment. If we didn't have the $100K (or fair market value of your aircraft) in the form of an airplane, what could we earn on that money? I haven't shopped this lately, but I suspect you could get a CD paying around 4% - 5% for that amount. So, we are at least $4K to $5K poorer each year than we would be if used that money differently. Understand, I am not saying it isn't worth it. Just noting that the difference between owning outright and having a loan may not be as great (in financial terms) as it appears.
 
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