Sure, you love to fly, and you get paid for flying, but do you really profit?
Think of it this way: When you fly, revenue is being generated for the company, which pays you. The revenue that goes into the airline pays expenses and ultimately drives profit. Profit is then used to make investments for the future (such as new equipment, hiring, training, etc.) so the airline can continue to grow.
This same principle can easily be applied to your financial life. However, many pilots completely miss out on the profit piece and leave the opportunity for significant wealth on the table. You have money coming in (your pay) and it goes to expenses and hopefully, into savings (profit) for your future. So, here’s the question: When you fly, are you making sure you have some profit built in for your future, or are you spending everything on expenses?
Fly at least 10% of your hours for YOU
When you fly, you need to be earmarking at least 10% of your flight hours to yourself. In other words, you need to pay yourself 10% of your earnings. Always. Without fail.
If you’re flying 900 hours a year, then 90 of those hours need to be for you and your future. So if you earn $100 per flight hour, then you earn $90,000 a year flying. $9,000 (10%) should go to you. For every 10 hours you fly – or for every $1,000 you earn – you need to be paying yourself $100 dollars.
Why this is so important
When you pay yourself, you are saving money. When you save money, you increase your net worth (by either investing that money, paying down debt, or both). Building your net worth is the sole task that will allow you to reach financial freedom and allow you to fly because you love to fly, not just for a paycheck.
Start with you
Here’s how to do it: When you get paid, make sure you immediately transfer 10% of that amount to a savings account, retirement account, or other investment account. It may feel like a lot, but trust me, after a month, you won’t miss it.
Does your airline already put in 10% or more into a retirement plan for you? Great! But, don’t rely solely on that — contribute another 10% of your own income to yourself.
Take it one step further — “Save more tomorrow!”
Ten percent is a starting place, not a destination. So, how do you get above 10% when money feels tight? You “save more tomorrow.” This means that you commit, right here and now, to saving 50% of any future pay increases you receive.
Because the pay increases are new, you won’t suffer if you do it right away. And trust me, your future self will thank you! (By the way, the thanks may be from your future self in two years, not just 30 years down the road.)
The impact of paying yourself is massive
How would you like to be worth millions? Many pilots become millionaires (or multimillionaires) but many leave even more on the table. Why? Because they don’t pay themselves, relying on their income, old A Plans, and airline contributions for their futures. If you start now and consistently increase what you pay yourself, the difference over your career can easily be in the millions!
Want more benefits?
All pilots know that discipline is essential. When you pay yourself more, you’re building your “discipline muscle.” Discipline and the ability to sacrifice a bit today for something much greater tomorrow, is the number one trait of financially successful people. When you build greater wealth by saving more, investing more, and paying down debt, you have far less stress and far greater comfort and freedom. You also put yourself in an enviable position where your money is working for you and not just you working for money.
It’s time to take action and pay yourself
If you want to be wealthy, to enjoy financial security, then you need to take action toward that end. No one is looking out for you – you are on your own. The good news is that you have chosen a career in which you have massive opportunity to do it!
With that in mind, here is what you should be doing, starting now:
1. Increase your situational awareness — start tracking your income and expenses.
2. For your first paycheck in April, commit to transferring 10% of it to savings the minute it hits your account.
3. Commit to saving 50% of your future pay increases.
4. Watch your wealth build significantly.
Worrying that you can’t do it? Stop! Try it and see. I bet you can, because 100% of the people I know who have tried it have been able to achieve it. And their lives have changed forever.
Building wealth is a science that anyone can master. You just have to do it. Don’t rely on your company or others. Pay yourself at least 10% of your earnings and commit to saving 50% of each pay increases. If you do that, you’ll hit financial freedom much sooner than you think! ACN