Peter wrote:
A private owner needs to essentially ignore depreciation and interest on capital,…
That depends on two things:
1. If you have to borrow money for anything (house, car, horse, …) then owning an aeroplane on top of that will mean that you have to borrow more money and suddenly the cost of borrowing money becomes a factor.
2. In times of high interest rates (not now obviously, but I remember times when it was between 12 and 15%) investing the money “buried” in your aeroplane may actually generate enough income to buy flying time in an aircraft one class up from yours, especially at low usage. Why would you keep your TB 20 for 100 hours a year if the interest on your capital will pay for 60 hours in a TBM x00 (which will cover the same distance in less hours)?
Offensiveness is in the eye of the beholder, and words ought to be a little bit wild, as Keynes would say.
If you have to borrow money for anything
That’s true, which is why very few private owners buy their planes with a loan. Those that do get very upset when somebody posts on their type specific forum that the value of their plane is $X when X < what they paid for it 
Offensiveness is in the eye of the beholder.
Indeed, but somebody has to make the judgement, otherwise you have anarchy. Guidelines.
Why would you keep your TB 20 for 100 hours a year if the interest on your capital will pay for 60 hours in a TBM x00
Even if that were true in today’s “near zero return on capital invested” climate, there is still the issue of currency on type. For example I am very current (maybe not much good 
) on the TB20 but I would not have enough currency to fly the TBM for the same trips. Let’s say I do 100hrs/year (it’s actually nearer to 150+ but that’s unusual) in the TB20. If I did the same trips in a TBM I would be doing 50hrs/year. And if I cut out the scenic flights, I would be looking at 25hrs/year. Even I know that is nowhere near enough to be current in a TBM. One can’t replace the “SEP mission profile” with a TBM.
Another thing I just remembered about syndicating a plane where you don’t need to do so for simple money reasons: it gives you someone to fly with on trips, who knows the plane and helps out while keeping you company. This is especially relevant when your family doesn’t support your flying or isn’t interested in it. I know a few owners like that…
Peter wrote:
One can’t replace the “SEP mission profile” with a TBM.
Well more accurate to say “one can’t replace your SEP mission profile with a TBM”.
Well, taking that the other way round, if someone has a mission profile for which they want a TBM, not many people would have been fulfilling that profile satisfactorily with a SEP. You would need a PA46. Anything less would need full de-ice and large balls a generous attitude to risk
I would suggest that not everyone buys planes based on their mission profile. Plenty of TBM owners would be fine in a piston. But a PA46 is an SEP!
The discussion on capital cost reminded me what I had in the back of my mind when I mentioned depreciation. That was the old debate without solution – whether you need to discount the capital tied up or not. Imagine a plane costing 100€/hr but needing an investment of 1 mill, vs 200€/hr and costing 100k€. Which one is “cheaper”? Depends on the % interest at which you calculate the purchase price.
But in this whole debate, we didn’t touch on capital cost at all. My whole argument assumed 0% interest, as did Adam as well!
Peter wrote:
A private owner needs to essentially ignore depreciation and interest on capital, otherwise (as I said) you will have a very boring life.
That might be true for a very wealthy person buying a jet (?), who is otherwise spending money like water, but I think the main route for a more normal person to lift themselves out of a boring lifestyle is by paying attention to depreciation and interest so that they are always spending less than they earn… especially at the stage of life when they want to initiate long term investments.
Toys are a staple of life (for me anyway) and I’ve bought many, including when I was young, but they’ve almost always been things that didn’t tie up too much capital and that I thought had some level of lasting value. So far life has been pretty fun. As I’ve likely mentioned before one of the totally impractical (but fun) motorcycles for which I paid $5700 is now worth roughly $35,000, which works out to about 8% appreciation. Buying stuff like that instead of throw aways, maintaining stable employment, avoiding new cars until you can pay cash for them without blinking an eye, and so on works…
The right kind of planes tie up less money now than ever, and I think if you work the situation carefully (buying ‘right’ and minimizing running and storage costs) an aircraft can be a good place to spend your entertainment budget. In the end you can end up with a fun asset that you can someday roll over into some other fun non-depreciating toy, and do it multiple times if you want. Meanwhile as time goes on you can use the money saved on depreciation and interest to do something useful (likely not involving a savings account)
So I disagree that the private owner should ignore depreciation and interest on capital to avoid a very boring life, because I’ve had a fun life in never doing so
Peter wrote:
For example I am very current (maybe not much good ) on the TB20 but I would not have enough currency to fly the TBM for the same trips. Let’s say I do 100hrs/year (it’s actually nearer to 150+ but that’s unusual) in the TB20…
I think this is the reason why hours isn’t a very good measure of currency. You say your 150 hrs a year in the TB20 would be compressed to 50 a year in the TBM – but most of your 150 hours are basically in the en-route phase where relatively little is happening. If you had a TBM you’d be still doing the same number of departures and approaches as in the TB20. The only thing you’re compressing is the relatively “boring bits” in the middle. The problems caused by lack of currency tend to come right at the start and end of flights rather than the middle bit (mishandling during departures, approach and landing being a much greater generator of mishaps than the en-route phase).
So really you’re just as “un-current” in your TB as you would be in the TBM, so I don’t think you’d be particularly worse off.
Silvaire wrote:
So I disagree that the private owner should ignore depreciation and interest on capital to avoid a very boring life, because I’ve had a fun life in never doing so
But the principle is the same. The only difference is the amount of cash you are willing to cash out, or have access to at any moment. Making the hobby pay for itself and a little bit on top also, is not uncommon. Lots of experimental aircraft builders do exactly that. My cousin takes pictures as a hobby, and he finances his ludicrously expensive lenses by selling those pictures online. I don’t see that as a goal in itself though, not as long as you have the cash in any case. It’s more of a nice bonus.
