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The Economics of the Airplane Hobby

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StarJar

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For many years I thought my fortune lay in the homebuilt aviation world. I thought that if I could just design a plane that everybody liked I would have gobs of money and be financially set. But I guess I never really looked hard at the reality of that. Even a popular design does not put its creator into the financial stratosphere.
On the other hand I failed to look literally in my own back yard for my best shot at financial independence. The trade that was my family roots. There was always a lot of opportunity there that I never realized. Maybe because in school you're motivated to go out and succeed, but we go out too far, away from our potential fortune in life.
Now those of you who do have a virtual backyard of airplanes, then you might have the roots and DNA infrastructure to do very well there.
Of course we all want the money to do the hobbies we want, but I just think that going too far from you're own backyard may be the wrong direction to make the kind of money you want.
Can anyone else relate to this?
 

gtae07

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For many years I thought my fortune lay in the homebuilt aviation world. I thought that if I could just design a plane that everybody liked I would have gobs of money and be financially set. But I guess I never really looked hard at the reality of that. Even a popular design does not put its creator into the financial stratosphere.
On the other hand I failed to look literally in my own back yard for my best shot at financial independence. The trade that was my family roots. There was always a lot of opportunity there that I never realized. Maybe because in school you're motivated to go out and succeed, but we go out too far, away from our potential fortune in life.
Now those of you who do have a virtual backyard of airplanes, then you might have the roots and DNA infrastructure to do very well there.
Of course we all want the money to do the hobbies we want, but I just think that going too far from you're own backyard may be the wrong direction to make the kind of money you want.
Can anyone else relate to this?
How do you become a millionaire in aviation?
 

TFF

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This is what i tell everyone about jobs or what you want to do. Pick a job you will be really happy doing, and the money is what it is, or go and make a lot of money as the only goal so you can spend it on what makes you happy. 99.99999% can't have both. Most of the time we are somewhere in between.
 

Swampyankee

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I think for the vast majority of private pilots, owning an airplane is like owning a boat: an airplane is a volume of air surrounded by aluminum (or the material of choice) which acts as a sink for money.
 

Topaz

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Most people try things like this because they have it backwards. They think that they can turn whatever they're passionate about into "financial independence". That's a really rotten perspective with which to start a business, and it's one of the more sure-fire ways to end up out of business in just a year or three, like 95%+ of the other start-ups. The focus is on the activity they love, and making a living off of it is "what comes next".

Like I said, that's backwards. Go into business because you want to own your own business. Running a business is your goal. You choose the subject for your business based on having some experience in the field, having significant knowledge in the field, all in course of working for someone else. If it's something you truly love, so much the better.

Go into business with the goal of running a business, and you may actually succeed. Go into business with the goal of living your passion full-time and making a living off of it? You'll probably end up a statistic. In the latter case, your focus will be on the object of your passion instead of on your business, where it belongs. If your focus isn't completely on running a business, you aren't going to be in it very long.
 
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Topaz

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You know, I don't get any joy from being the "voice of reality" on this topic. I'm not out to crush anybody's dreams. On the contrary, I hope anyone with a strong dream of running their own business gets a chance to experience and explore that dream. But I would spare as many as possible the reality that starting a business for the wrong reasons is almost certain to lead to failure, and the fact that a small-business failure will exact a simply huge toll on their lives - financially, emotionally, and physically. I've seen surviving a failed business start-up compared very reasonably to surviving a divorce, in most meaningful ways. And it's not unheard-of to get a divorce on top of the business failure, compounding all the problems even more.

If you really want to start your own business, then more power to you. Just do it with your eyes open, and not covered with the rose-colored lenses that so often accompany dreams of "financial independence."
 

StarJar

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Ya, I'm finding that there are a lot of pop phrases thrown around, that are just boloney or don't work. How many people really really know? Maybe about 1%. Sounds like Topaz has seen a few things.
 

Little Scrapper

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I started my business flat broke because the recession hit so hard construction flat out stopped. It took me 2 years to burn through every dime I had until finally I just realized I had no choice.

People who start a business generally are not comfortable working for others, they thrive on a challenge and thrive on stress etc.

I was a foreman running some of the largest hospital projects in the Midwest. Had over 40 guys on my crew that I managed. It just came to a screeching halt.

Years later I find myself number 1 in my market place and demographics. I never wanted to own a plumbing business but looking back I'm very happy I made that decision.

I grew up with most of my family members owning a business, my Dad's company had over 900 employees at one point. Manufacturing. I watched the hours they put in and decided that wasn't for me. As a foreman I made well over a $100k a year and carried a lunch box. Not bad.

Currently I work 80 hours a week 7 days a week. The time commitment is unavoidable, it's just part of the deal. Most people are not up to the dedication and commitment it takes. That's the first thing.

Second. Money. I am 100% debt free. I owe nobody anything. Lots of people own businesses but that doesn't mean they make money. Being debt free helped me make wise decisions, when you're heavily in debt you make horrible decisions. Lack of money kills a business, especially when your trying to make money. I remember once having $7 in my account for like 11 days. I turned down work because I couldn't afford gas until a customer check came in the mail. Because I was debt free I could pull it off.

A lot of people want to own a business but not everyone CAN make it work. Could be personality, knowledge, biased mind set, priorities that don't match etc. Regardless, the image in your head of owning a business is totally different than actually owning a business.

I had to learn as I went along because nothing in books or videos matches the reality of a real business. Most of that stuff is pure crap written by non business owners.

My first year in business I had sales of about $9,000. Currently with one supplier I spend about $30,000 a month on materials from them. Now, you may think that's great, and sounds great but here's the deal. If I made $140,000 a year and my wages stopped......which they did, and it took 10 years to get this......add up how much money I missed out on. Over a million.

Don't get me wrong, I do love what I do I guess but most businesses are not started out of passion. Talk to people who successfully started a business and have been successful and often times there's a unique story behind it. Nothing happens like it says in a book.
 

Little Scrapper

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One other thing that is worth mentioning. Sacrifice at others expense.

While building my business my kids grew. Who really pays the price when working 80 hours a week?

A baby is a baby for 6 months. Then it's over.

They are a little tike for 1 year. Then it's over.

They are a little kid for a few years. Then it's over.

They are a preteen for a couple years. Then it's over.

They are a teenager for a couple years and off to college. Nothing is the same once they leave for college.

It happens in a blink my friend. We are here for a very short time. There's always a sacrifice to be paid in any decision we make.
 

Topaz

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Ya, I'm finding that there are a lot of pop phrases thrown around, that are just boloney or don't work. How many people really really know? Maybe about 1%. Sounds like Topaz has seen a few things.
Started my business in July 2007. Full-time, go-for-broke. I'm pretty sure I've made every mistake there is to make along the way, excepting the mistake of not having enough start-up capital, which subject I took very seriously on the advice of a retired businessman in my field who was kind enough to give me his time in reviewing my business plan. I was fortunate enough to have his advice, and humble enough to take it. He probably saved me from going out of business. Now it's going on nine years later, and last year was another "best year ever". If you can't find someone like my friend, go check out SCORE. An entire organization of exactly that kind of person.

A lot of the books for "Start your own money-making business!!!!" aren't worth the paper upon which they're written. Good schoolbook theory, but nothing to help you adapt it to the real world. And that's the biggest issue for a new start-up: You literally don't know what you don't know, and you have an employee's relationship with money, not that of a business owner. Until you can develop a firm grasp on the latter, you're in danger.
 
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bmcj

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Most people try things like this because they have it backwards. They think that they can turn whatever they're passionate about into "financial independence". That's a really rotten perspective with which to start a business, and it's one of the more sure-fire ways to end up out of business in just a year or three, like 95%+ of the other start-ups. The focus is on the activity they love, and making a living off of it is "what comes next".
And you risk alienating yourself from your passion. As you grow to hate the difficulties of the business, you might start to hate what started you in that direction.
 

Little Scrapper

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Now, my advice as a business owner?

Generally speaking, it's been my experience that owning rental properties and running it as an actual business can have a very favorable outcome. Not always, but often. Some are very good at this while others struggle. Most of my friends own a business and guess what? The ones who work less and do really well own properties. They all started with 1. And they ALL punched a time clock while starting out, something many of us who own bricks & mortar businesses didn't have the luxury of.

Some businesses are very very difficult to make money in and some are easier than others. Choose wisely.
 

Little Scrapper

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Funny thing about sucess. As a business owner I never feel successful in my heart. I'm not sure why. All things considered, money isn't really a problem anymore, but now there's a new set of problems. People have told me I'm successful but they don't really get it, because they don't own a business. I get along really well with other business owners because we share a common bond, something that's hard for a non business owner to really grasp. We've sacrificed a lot, often times too much, to get to this point. I'm not sure what success really looks like or how it's defined. Maybe it's just some sort of balance you need to keep. It's the strangest darn thing really.
 

Topaz

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You know, I think that problem is because "success" is a destination. Someplace "defined". You and I both know that business never has a destination - you never "arrive". Business is constantly changing, morphing, "becoming". It's a process, each and every day. To "succeed" would mean that you're in a specific, static place. I don't know about your business, but mine is never static. I'm chasing today's issues today, will be chasing tomorrow's issues tomorrow, and Friday's issues on Friday.

My business is "successful" in that I grew it from ~$2,400 revenue my first year, up to a place where I earn a comfortable and relatively stable living today. I can afford some of the luxuries that I couldn't those first years. But am I a "success"? I'll let you know when I get there, wherever it is.
 
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