MedEwok wrote:
While we’re at it: would you take out a loan for buying an aircraft or rather be sure you have enough cash first?
Personally, No.
No, i would never. see other thread by Adam.
If I was able to make a valid business case, I would consider it. But the validity of the case would have to be real, and not based on wishful thinking and lenders trying to bankrupt me. Since I can’t honestly make one, if I buy, it will be a cash deal.
The biggest problem with a loan is what happens if the plane gets damaged or lost and the insurance doesn’t cover it.
You will feel really sick making the payments afterwards 
I would start a syndicate.
Peter wrote:
You will feel really sick making the payments afterwards…
Quite a few young motorists can tell you a story about that. This might be another reason why leasing could be an alternative. Unless of course you can pay for the aeroplane in cash. The leasing companies will look for real good insurance cover, so unless you do something really stupid, any damage is their problem and not yours.
AF wrote:
Filthy Rich – Private Jet
Rich – Socata TBM / Pilatus
Wealthy – Cirrus
Higher Middle Class – Beechcraft
Upper Middle Class – Mooney
Middle Class – Cessna
Lower Class – Ultralights and stuff
Broke – Gyrocopters / Gliders
You have missed out the once rich, now broke, who have piston twins.
Timothy wrote:
You have missed out the once rich, now broke, who have piston twins.
Or even worse, those who once had piston twins and now have to work for a living (like myself)…
BTW: When I was still a student at university, I had my only fully-paid-for flying machine: A hang glider, bought for 1000 DM (now 500 Euros). An even lower category than all those in the list. Actually I co-owned it with a buddy who damaged it by landing in a tree and we never had the money to get it repaired properly.
Thanks all for basically confirming my gut feeling about loans. And doubly correct what_next about the family home, that has financial priority.
Re houses, planes and loans, my philosophy has been to work in the order of priority, with those items that will make you money in the long term having higher initial priority. I started work relatively young, lived in cheap shared apartments and bought nothing for a couple of years until I could buy a small residential property in an appreciating market.. After that, as time went on I could make occasional cash purchases for durable toys, non-depreciating motorcycles mostly, and I still own most of them. Meanwhile, I drove inexpensive used cars (also bought with cash), saved whatever money I didn’t spend and (most importantly) did not borrow money to pay for depreciating consumer purchases. The latter is an almost religious motivation for me
After a while I used savings for a good down payment on an second (investment) property. Then as the two properties appreciated over time I refinanced each in sequence to buy two planes, maintaining over 50% equity in each. Property appreciation and rent bought highly depreciated planes, aided by cash income from a side business. Then, married and with the investment and hobby situations stabilized (i.e. 65% investment property equity and no more toys needed), we bought a sizable home for the first time. That involves monthly interest payments with no rent to offset them, but at least the house is rising in value. I’m now working on paying off everything, with no particular pressure to sell any of the durable toys and enough money to fly. I should have no mortgages and some rental income in six to eight years, job stability allowing, and will still be able to fly the whole time, health allowing! Then if I’m lucky 10 years flying etc after early retirement.
Buy things that appreciate first, and eventually buy toys that have already depreciated. Keep a steady uninterrupted wage income, assuming you’re a doctor or engineer and not a business entrepreneur. Don’t do things that make you crazy with stress if you can avoid it. In the end you get the plane without being ‘upside down’ in debt.
@MedEwok
Do you have grandparents you can leave the kids with while you and you wife go off on flying honeymoons to the Frisian Islands and later south of the Alps? A good tactic might be developing a Pavlovian reflex in you wife: plane = time alone with husband…
