Thanks for sharing the data you have researched. Good to know that burnout is low.Your points are well noted.
I will repeat this again. This math has nothing to do with your income and everything to do with spending. You want to replace how much you spend. If and when you double your income to $500k a year, will you double how much you spend? I hope not. For one your taxes will increase. Plus you should probably use some of your raises to increase your savings and not your spending. Don’t get me wrong, feel free to spend more, but don’t double it.
Also, by the time you are making $500k you should have saved a decent chunk of cash that will replace some of your needs for insurance.
Curious for you, what is the burnout rate for pilots? How often are pilots forced out of the air due to health issues? What are the chances the airline industry will find a way to train a lot more pilots so that the jobs are more competitive and salaries decline? I have seen this happen in my specialty (I am a physician in a high burnout rate specialty.) In my area that is exactly what happened. I watched our income decline by about 20% over several years. Those who over extended themselves on their spending had to make some serious changes.
If I was a pilot, I would look to get myself some early financial security and not count my $500k chickens before they hatch. If you do one day make $500k a year, you can always buy more life insurance to cover your newer spending needs.
With respect to pilots. In terms of burnout rate it is quite low. I've averaged 8 days of work a month over the last year with a few month exceptions where I chose to pickup more to make some extra money. My airline is somewhat unique in terms of days worked, but our trips are more efficient when we go to work compared to some of the other carriers.
With respect to health issues. While I don't know the exact numbers I did find this: The Federal Aviation Administration (FAA) reports that the annual medical denial rate for airline pilots is 2.6 per 1,000 active pilots. The denial rate increases with age, from 0.4 for pilots in their 20s to 10.9 for pilots in their 50s.
I am very conscientious of my health (I just had a comprehensive blood panel done with over 100 biomarkers through Function Health). Things looks fantastic so far. But I am aware there are no guarantees. Thankfully I have excellent Disability/Loss of License insurance if that were to ever happen.
With respect to the industry training a lot more pilots so that jobs are more competitive and salaries decline - well that is exactly what has been happening over the last ~5 years. The salaries went up - and not just up, but SIGNIFICANTLY up. We had a large "pilot shortage" (if you want to call it that). A lot of guys were retiring and there is still a significant amount of retirements to come. The industry has slowed down significantly now in terms of hiring, but it is hardly over. It doesn't really affect me as the airlines are a seniority based system. The more people I have behind me, the better. As I am sure you are aware, the airlines are heavily unionized. We have a contract cycle. The only way I could see large pay cuts would be bankruptcy of some sort. Thankfully my carrier has been around for almost 60 years and we are there only carrier to never furlough. Will we see fully autonomous airliners by the end of my career? I even doubt that (for various reasons and is probably better suited for a discussion outside of this forum). I was previously an engineer in the space industry so I do have some insight. We've been flying autonomous drones since the 90s. We aren't even close to implementing that into any sort of commercial airline service (and it isn't because we aren't capable).
All this to say there are no guarantees in life - obviously. I would say that with the exception of some unexpected health event or me dying, the chances of me being a high income earner for a long time is pretty high.
My concern about buying health insurance later on is it will only be more difficult and more expensive.
For what it's worth - my dad is a dentist (had a private practice for over 25 years, but now teaches dental students at a university). My dad's older brother (my uncle) is an orthopedic surgeon. My mom is a nurse, but has been in medical sales for over 30 years. After seeing what has happened to medicine (especially with big insurance running everything) I was convinced to not go to medical school. I'm glad I did not go, but I think it is a complete shame to see what has happened to those practicing in the medical field. My uncle works more and makes less than ever now (they had a private practice, but were bought out by a large hospital).
I have no idea what you fly or for whom, but the airline industry over decades has had a difficult time to maintain profitability. At one point Warren Buffet thought it all changed and bought in only to find out he made a mistake. Neither of us can predict the future, but one way that airlines can become more profitable is by cutting costs a that could mean you. Will your union prevent that? Who knows, and I hope that your union will indeed do it for you when the time comes. Look at Southwest for decades it had a business model which made consistent profits while the legacy airlines were struggling requiring bailouts. Then, one day Southwest started struggling. My point is even great companies can have issues and no one is immune.
I'm glad you are in good health. There is nothing more valuable than being healthy and I hope you keep doing things that keep you healthy. I have a healthy body of mine who flies for Southwest. He was grounded for some time because one day he developed high blood pressure which proved difficult to manage. There was no family history of difficult to control high blood pressure, he eats well and exercises regularly, bet there he was, grounded until doctors figured it out for him. Disability insurance is key.
Why am I talking about all this? You have a great career with a wonderful future. Save diligently, a minimum of 15% a year. As your income increases, split half towards savings and half towards spending is one strategy. I personally would increase spending slowly despite large jumps in income. Allow me to explain. When we increase spending, we get a rush and we enjoy it. It doesn't take long to get used to the increased spending, the rush is gone, and life is mundane once more. What if instead, you slowly increase spending. Maybe every 2-3 years you increase spending by $500/month. This will allow a slow lifestyle creep which you and your family can enjoy for years to come all while building wealth faster and faster.
Statistics: Posted by EnjoyIt — Thu Dec 12, 2024 11:29 am — Replies 50 — Views 1474