317. Pilots Start Here

On this episode of the A Wiser Retirement® Podcast, Grace Kennedy interviews Casey Smith, president of Wiser Wealth Management and former airline pilot, on how aviators can prioritize, plan, and protect their money from day one through retirement.

Related Podcast Episodes: 

Ep 194: Delta, American & United: Who's Got the Best Pilot Retirement Offering?

Ep 173: Making the Most of Your Airline 401k | 401k for Airline Pilots

Related Financial Education Video:

Delta Pilots: Market Based Cash Balance Plan Explained

Avoid Asset Managers Looking to Manage Your Airline 401k

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This podcast was produced by Wiser Wealth Management. Thanks for listening!

Transcript

Welcome And Pilot Focus

SPEAKER_05 0:00

Are you an airline pilot wanting to better your finances? Today I'm interviewing Casey Smith, president of Wiser Wealth Management and a former airline pilot. Stay tuned for more. Welcome to a Wiser Retirement Podcast. Airline Pilots Start Here. Today we're talking about your finances, where to begin, what to prioritize, and how to plan for the long flight ahead. I'm Grace Kennedy, and today I'm joined by Casey Smith. Each week we bring you practical advice on retirement, investing, and planning for your financial future. Don't forget to subscribe to the podcast wherever you're listening. Let's get started.

SPEAKER_02 0:38

Hey Grace.

SPEAKER_05 0:39

Hey.

SPEAKER_02 0:40

I'm sitting on the other side of the table again.

SPEAKER_05 0:42

Yes, you are. I'm still the host.

SPEAKER_02 0:46

Still the host.

SPEAKER_05 0:47

Always the host.

SPEAKER_02 0:48

All right, Grace. Um, well, what's new? It's almost we're getting closer to Christmas. That's cool.

SPEAKER_05 0:56

We are. It's cold outside.

SPEAKER_02 0:58

Have you done have you done your Christmas shopping yet?

Host Banter And Personal Updates

SPEAKER_05 1:01

Oh my gosh, no. You know, I'm getting married in April. Right. So I think I'm like, sorry, everyone. You may not be getting a gift this year.

SPEAKER_02 1:08

Oh, we're gonna save all our resources. Right. Sorry. I'm just gonna have to skip the entire family. Oh, are we just is it because you don't have time because you do so much planning?

SPEAKER_05 1:16

Well, it's just time and money. Weddings are expensive. I hear this.

SPEAKER_02 1:20

Yeah, I see it in client budgets. Very expensive.

SPEAKER_05 1:23

Right. Yes.

SPEAKER_02 1:24

Yeah, we were we were talking, um, we were talking, I think we had dinner with uh some of the others here uh a few nights ago.

SPEAKER_05 1:31

Oh yeah.

SPEAKER_02 1:31

And we were talking about bachelorette parties. So I went home.

SPEAKER_05 1:35

That alone was expensive, yeah.

SPEAKER_02 1:37

I went home and I asked my wife, I said, I said, they were asking me at dinner where I went on my battery trip. And she was like, she's like, those things weren't really a thing when we got married 25 years ago. And I was like, oh, okay.

SPEAKER_05 1:51

Yeah, or it was probably more casual than it is now.

SPEAKER_02 1:53

It was like a day or something. Yeah. Uh yeah. I was like, okay, good. Because I thought, man, am I just for forgetting things? Like, you know, Dante take the Alzheimer's test. I was sitting there at dinner going, I I don't have anything to test numbers. I don't think I even would have won. And of course, everyone was looking at me like, you didn't go in a batch. I was like, I don't have any friends. I don't know, I don't know what to say.

SPEAKER_05 2:15

I know it's a big to-do now. Um, so yeah, that's also expensive, but it sounds like a whole four-day thing at this point.

SPEAKER_02 2:22

Yeah, that's rather than a day. Yeah, and I found out that the bachelor or the bachelorette doesn't have to pay, everyone else chips in for it.

SPEAKER_05 2:27

Yeah, which is crazy. I did not do that, so no one come for me. I'm pitching in my own, but I've been on some where they didn't pay.

SPEAKER_02 2:34

Interesting.

SPEAKER_05 2:35

Um, and it's fine.

SPEAKER_02 2:36

I want to celebrate them, but I'm just very particular about my travel at my uh in my age. So I I I wouldn't money be else have to pay for that.

unknown 2:43

Right.

SPEAKER_05 2:44

Well, yes. But in your 20s, we're not quite doing it.

SPEAKER_02 2:47

Yeah, in my 20s, maybe that wasn't as picky. I don't know.

SPEAKER_05 2:50

No, right. So yeah, so this has nothing to do with our podcast today, but yeah, um friendly banter. A little a little about us. That's what we're going through right now.

SPEAKER_02 3:00

So you're interviewing me.

SPEAKER_05 3:02

I am interviewing you.

Casey’s Aviation Background

SPEAKER_02 3:03

And what are we talking about today?

SPEAKER_05 3:04

Pilots.

SPEAKER_02 3:06

Yes, my favorite topic.

SPEAKER_05 3:08

I know it is, and you're the best person to talk to about it. So yeah, we're just talking about pilots, and we all know that they have a very unique um situation in general, especially when it is the approach to finances. So um, you have all the answers, right?

SPEAKER_02 3:23

Man, uh I loved it. And we have great team members here that also have the answers. It's not just me, but I'm representative of all the financial advisors and their knowledge of um of of the airline pilot world. And that's what makes our firm unique and is what makes our clients unique, right?

SPEAKER_05 3:39

And you have hands-on experience, I feel like, in both of the worlds, you know, finance and airline pilot.

SPEAKER_02 3:45

Yeah, um, we have lots of podcasts about that. But yeah, dual I did dual career. That's how I built this firm uh over 12 years was uh flying at night and working in in finance in the daytime. And right in 2014, I was able to stop flying and start uh start start focusing on wiser more. And here we are. We got almost what 17 people here now or something along those lines.

SPEAKER_05 4:05

Yeah, we do.

SPEAKER_02 4:06

Uh came back from a lunch or 12 people at least in office today. Um, but yeah, it's it's I've been very fortunate to have two passions and um it's it's been fun to live out to live out both. Um I I did get to fly uh a CRJ for 10 years, and that was fun. And and Beach 1900 before that, uh, that's what I learned, and that's where I got my feet wet on the in the commercial industry. And that that's a little more of a blue-collar airplane, get a little dirty, find a beach 1900. But but the CRJ was was uh probably the most hated um regional jet, right? That people go on. They think they think they're getting on a 737, they get in this little tiny jet. Okay, yeah, yeah. So people get a little nervous about that. But it was it was a it was a fine jet to fly for a career. Um, but for me and my aviation career, I I worked in some of the worst possible times. I had the financial crisis in 2001, and then I'm sorry, the uh September 11th in 2001, and then you had uh financial crisis in 08, and then all the bankruptcies and all the things that happened in between. And I was also building hours, so I didn't have an opportunity to get to the majors as fast as um what others would be able to do today. So it's very different times, but but uh I I enjoyed it and I also enjoy getting to sleep in on some days. I enjoy uh being in the same time zone um and I enjoy being at kids' events, so I'm living the positive side of not being an early pilot right now.

SPEAKER_05 5:27

Yeah, I get it. Yeah, so that's a little bit of your background. And we, you know, for those that are maybe listening and they're not a pilot, you know, maybe they don't even they're like, why did pilots have why are you saying they're unique? So I mean, like, why do we say that they have unique financial, you know, the way that they go about things or their opportunities? Like, why don't you tell us a little bit by why we say they're unique?

SPEAKER_02 5:49

Yeah, the industry is very scattered. So you you the pilots we typ typically are working with are Delta, American, United, Southwest, Alaska, um, more of your common large carriers, right? Um, but there's also this whole world of cargo. You have Atlas, um, you have uh Coleta, you have UPS, FedEx. Yeah, um, and and these are all uh structured slightly differently. So it's the same airplane in most cases, but but it could be totally different benefits and pay. Uh and it's really based on what that local union has been able to negotiate with management. Yeah, and that ebbs and flows. Like FedEx still has a pension where um American does well, like I just say nobody else does.

SPEAKER_05 6:34

They're the last one standing.

Why Pilot Finances Are Unique

SPEAKER_02 6:36

Yes, but but the other airlines have large matching. And the the most common thing I hear uh or we hear from clients is or prospects is I really wanted to find someone who understood me because I went to my local person that was recommended by a friend of mine and they turned me away and told me to go back to to go back and talk to HR because I definitely don't get 17 or 18 percent of what I make put into my 401k plan. And they said that was wrong. And then I found your website and I found out that oh wow, um, here's a person. Who actually knows how this actually works, right? So that it's the um in in in the type of work that you do. Are you narrow body, are you wide body uh pilot? Are you the in your first few years? Are you in your last few years? It it it all varies um based on the situation. Um and and and then there's a lot of people, quote, her experts who want to work for airline pilots now because in the last five to eight years, we've had really good contracts that have been negotiated, especially on the Delta America United front. And these pilots have a lot more revenue now than they ever used to. And in my opinion, they're finally getting paid for the for the job and the risk they take on a day-to-day basis. Um, but unfortunately, uh that comes with a lot of people in our industry thinking they know everything about pilots when they really just want to manage the assets and not do anything else different. And so it's it's um uh, you know, you have companies like Allworth, you have Creative that say that they work with pilots, but they're not doing the right kind of financial planning. Uh, and and and quite honestly, they're just after the charge of one to one and a half percent fee on your 401k plan, and that's unnecessary.

SPEAKER_03 8:13

Right.

SPEAKER_02 8:14

So wiser to the rescue.

SPEAKER_03 8:16

Exactly.

SPEAKER_02 8:16

And we're trying to save people from from those big fees.

SPEAKER_03 8:19

And things like that. Yeah.

SPEAKER_02 8:20

And do the do our fiduciary duty within the airline industry and and and help these people not get taken advantage of.

SPEAKER_05 8:26

Yeah, for sure. And I think that happens a lot to pilots just starting out too, just because they're they're like, oh my gosh, I all this I didn't have like this overwhelming amount of income that I'm not maybe used to. And so that's kind of like whenever they start getting um hassled by those people.

SPEAKER_02 8:40

That second third-year pay for sure. Absolutely. Yes. Um, yeah, air airline pilots are a little unique in that you start off, it's not as bad as it used to be. I I mean, I got paid$18 an hour the my first job I had. I spent more, uh it cost me more to get to work. I was in Bar Harbor, Maine. It took me more to get cost me more to get to work and to live there to get ready to fly than I did flying.

SPEAKER_03 9:01

Yeah.

SPEAKER_02 9:01

But it's what you did to build your flight time to get out of there to go to someplace that was more legit.

SPEAKER_03 9:06

Makes sense.

SPEAKER_02 9:07

So um uh, but pays much better now at the beginning, but also the student loan bills are bigger.

SPEAKER_03 9:13

Yeah.

SPEAKER_02 9:14

Uh, and then cost of living obviously is more. Uh the airplanes are fuller now, it's a little harder to commute, but there's there, you know, there's commuter clauses, there's other things that have come in uh since since I left the industry. But I I I guess the bottom line is it is it's not a smooth, it's not always a smooth transition. You have spirit pilots right now that are working their way backwards. Um, maybe Frontier is gonna be next on that list. Uh so there there's a lot of things within the industry that you have to understand and what to plan for. Um, it's not like you just get a job at Coca-Cola and you're gonna get these steady pay raises your entire life, and maybe you'll get to management and it's really clean. It's not clean at all. And you have to be ready for the um for the surprises.

SPEAKER_05 9:53

Exactly. Yeah. So talking about like I guess entering, you know, whether you're a new pilot or maybe you're just transitioning a career. Um, you did something else and now you're a pilot. So what would you say, like when it comes to money? Um, what's one thing that most pilots don't think about earlier in their career like that?

Contracts, Pay, And Predatory Fees

SPEAKER_02 10:12

The the young pilots right now have never experienced setback career-wise. Uh, like I just mentioned, you have a few at Spirit that are getting furloughed. Uh, but that's really the first mass furloughs that we've seen in our industry in probably 10 years. So that's an airline specific issue. They have a business model that's broken. Uh whether or not the airline survives uh is kind of is a big question. Frontier has the same business model, so we could see some risk there down the road. Um, and there's other low-cost models that might survive that are a little different, like Allegiant has um threatened um uh furloughs in the past. I don't believe that ever actually happened. Or if it did, it was kind of short-lived. But they're they're more point-to-point. They they fly from one place to the other place, you're kind of home at night. It's kind of how Colgan did it, honestly, back in the day when I was there in the early 2000s, uh, where you still have Frontier, which is your low cost, and Spirit, which is still kind of doing the hub and spoke thing for the most part, uh, which which you know people actually are buying, they want to buy a seat on Delta and know that there's not gonna be a fist fight in the back of the airplane. Yeah, so they're willing to pay a premium right now. Yeah, first class Delta's selling more first class seats than they ever have in the past. In the past, it typically has been for to to reward loyal customers with the free upgrade, but there's a less percentage of free upgrades and more people just buying the seat that they want to. Yeah, and and a lot of it has to do with like, okay, I'm gonna have to travel, but I'm not dealing with the madness that that's happened post-COVID. I'm just gonna buy my seat.

SPEAKER_03 11:42

Yeah.

SPEAKER_02 11:42

Uh so that guaranteed. Yeah. And and so that's um that's that's reshaping the business model a bit. But as a pilot, you're not really in charge of that. So the number one thing I would tell a young pilot is eliminate all your debt. So don't don't overbuy your first home, uh, which is kind of in the debt scenario. Uh, but you want to eliminate your debt so that you can handle um any mass layoffs should that should that happen. Because if you're if you're at the bottom of the sonority list, um there's a couple things that could happen. One, um, there's no more hiring behind you. So you're kind of stuck in that reserve slot or you're stuck flying the flights that nobody wants. You are getting paid, you are going to move up to the sonority list, but you're not gonna feel the quality of life change as much. And you might not want to pick up extra trips because you already have the most unproductive, you know, three, four, five, six-day trips already. So your income might be somewhat limited at that point. Um, where you have a more senior person higher at the pay scale, has trips everybody wants, easily can drop them, or has room to pick up more trips. Their their income can they can increase their income income pretty quickly, where a junior pilot's gonna have a harder time doing that. Doing that. So the first thing I would tell any young pilot is clean up the balance sheet, start working on eliminating the debt. Uh, most likely you've come through a regional at this point, you've made it to a major. So let's let's don't get a major in uh expense lifestyle just yet. Let's let's focus on cleaning things up and being ready for um uh more income in the future.

SPEAKER_05 13:14

Yeah, totally agree. And and you touched on, you know, the younger pilots haven't experienced like, you know, the mass layoffs and all that kind of stuff. I mean, that's I remember in one podcast you said, like, oh my gosh, we were talking to a 24-year-old and you're like, wow, that is the career lottery, like, good for you. Like you're on such a good trajectory. But like you said, like, I mean, that they just haven't experienced that quite yet. And so I guess a way to prepare, I'm not saying like you need to just be like living in fear all the time, but but to prepare for that, like obviously an emergency emergency fund is very important. I mean, for anyone, whether you're a pilot or not. But like you were just saying, pilots have very variable income based on like how many trips you're picking up or what your base hours are. So, how would you tell someone to build their emergency fund with that, you know, consideration?

SPEAKER_02 14:04

It's just living below your means. So you you you move to Delta the first year, your or American United that first year, you're probably just kind of surviving on the lower income. The second year uh pay picks up significantly. So in that second year, stay on that first year lifestyle and and build up, pay off debt and build reserves.

SPEAKER_01 14:20

Yeah. Before we continue, do you want to make the most of your airlines 401k plan? We've created three 401k allocation guides for most major airlines to help you do just that. Download yours for free at pilotretirement.com. Now back to the episode.

SPEAKER_05 14:51

Yeah, I mean, that's how I feel like we would tell other people as well. Just don't get too ahead of yourself.

SPEAKER_04 14:56

Right.

Early-Career Pitfalls And Debt

SPEAKER_05 14:56

Like you'll you'll get there. So that makes sense. Yeah. So when we're talking about, you know, we take pilots through financial steps, you know, we we have the three series process of that we take everyone, um, especially pilots. So what would you say to a pilot? What are the first three financial steps? You know, just in general, not necessarily like in our process, but what would you say like the first three things that they should do are?

SPEAKER_02 15:19

Yeah, I guess it goes back to um it goes back to the debt thing. Debt can be such a lifestyle killer. Uh we see we see clients that struggle with with lifestyle uh issues, the cost of lifestyle, they never quite get ahead. Um thank goodness they're getting such a large percentage in their Delta 401k, that's what's saving them. But I I would argue eliminate your debts, uh, make sure you're maxing out your 401k. The company's gonna put in a good chunk, but you should be putting in yours uh pre-tax or Roth depending on your situation. Uh and then I I think the third thing is get your allocation right. So I would go and download, uh, we we do that for free on the website. You can download um your allocation for your airline uh 401k allocation. We track those. This is what other people are charging one, one and a half percent for. I would give it away for free. Yeah. Because the values in the in the financial planning plan, right. Robot can manage assets these days. So we give away our that information. Uh, you can go to wiserinvestor.com, click on uh pilot or I think it's airline section.

SPEAKER_05 16:24

It's airlines, then you can click uh your specific airline.

SPEAKER_02 16:27

Airlines about the middle of the page, and then and then after that, you'll end up on our landing page where you can select your airline and do the download. So I would encourage everyone to do that, uh, whether you use our services or not. That's what it's there for. Yeah, it's there. I started that when I was I started that when I was at Atlantic Southeast Airlines ASA back in the day, the airline no longer exists now. But um, I would do these formal K retirement workshops through Alpa. And at the end, people are like, okay, I understand what you were saying, but can you sort of understand what you're saying? Uh, but can you just give me the answers?

unknown 16:58

Right.

SPEAKER_02 16:59

And so I had these pre-printed sheets that had like low, medium, or high risk. I'd say, well, here, just follow, just follow this. Which one do you want? You know, after after a two-hour workshop, uh, here I am just giving the answers for free. But but uh made a lot of friends uh doing that. So that was fun. Many of those are now wiser clients.

SPEAKER_04 17:16

Yeah.

SPEAKER_02 17:16

But but um, but yeah, we carried that forward. We just did it through electronically. So you take a risk questionnaire uh and that gives you an idea of which portfolio you should be using. So it's it's automated. Uh, but but you know, if if you're under the age of 50, you can be fairly aggressive. You can do the 91.9 allocation. Um, but but it's all right there. And Andrew here at our uh in our office, we call him the king of data. He's the guy that uh tracks all this. And if we update it, if you downloaded one and we update the the allocation, you'll get an email. But but there's really no real reason to update those allocations right now. We haven't really done much in the last two years. Um, there are we we do tend to underweight um like foreign stock. Yeah. So if Andrew decides that, okay, I think it's time to add more back um back to foreign stock, then ever everyone who's ever downloaded that list. There's there's thousands of them. We'll get yeah, we'll get an email. Yeah, that's a great tool.

SPEAKER_05 18:08

A great tool. And we've even like, we've I know we've done some consultations and they were like, yeah, we already have your allocation. We're like, well, good, you've already done some of the work right there. Um but that is such a great tool for for the pilots to be able just to automatically go and get that for their 401k. So we've talked about the 401k a lot. And we've talked about all these crazy matches and all that kind of stuff. So for someone that may not know, can you explain a little bit like what their what their structure is and what the match is, their 401k, all that kind of stuff.

Emergency Funds And Variable Income

SPEAKER_02 18:35

Yeah, if you're if you're at a mid-level career or even beginning your career as an airline pilot, you want to look for um the right benefits if you have choices. So I would say interview anytime you get a chance, because uh interview is always a good time to practice your interviewing skills. So many people say, I don't know if I want to go to Delta or American United or not. I'm not sure what you know, corporate guys. Uh and I say, Well, do you have an offer? And they're like, Oh no. I said, Well, you haven't interviewed yet. You haven't done through the steps. Like, yeah, go through the interview. If you get if you get the job offer, then let's talk about whether or not you should take it and you have a couple weeks to make that decision, right? Um, so so I I would I would say if you look at the major airlines, they're putting in 17 to 18 percent of what you make into the 401k on an annual basis. If you drop down to like an Atlas or even a Coletta, that percentage drops significantly. So you are not going to have um as a built-up 401k plan if you're at these other companies.

SPEAKER_05 19:38

Yeah, that's true.

SPEAKER_02 19:39

Um, if you're FedEx or UPS, um, you should be okay there. But if as you as you slide down um to ATI or some of these airlines, the most privilege that haven't heard of, but all the pilots know what I'm talking about. Uh the benefits are not there. Maybe those unions can can uh negotiate for those, but I don't know that I'd want to be um I don't know if I'd want to go to the airline hoping that it gets better. Right. Um American Airlines is going to be hiring the most pilots over the next 12 months. I'd rather go to American and fly there knowing that uh I have these these great retirement benefits, especially if you're late to the game. So I'm 47. So if you're in my age bracket and you're an airline pilot, the chances are you're behind on your 401k because of all the crap that happened during that lost decade. Uh, I would be looking at an airline that that is gonna be enable me to catch up faster.

SPEAKER_03 20:31

Yeah.

SPEAKER_02 20:31

And we have pilots that went to American in their 50s, uh mid-50s, it's gonna have less than 10 years at the airline and they're gonna be able to retire just fine.

SPEAKER_03 20:41

Yeah.

SPEAKER_02 20:41

Because of that. Where if they had gone to GoJets or if they'd gone to Endeavor or someplace like that, you don't have those benefits.

SPEAKER_03 20:49

Yeah.

SPEAKER_02 20:49

Um, so if you're if you're at the regional level listening to this podcast, you you probably should do the math and say, hey, maybe I need to be moving because those regionals, while you might have a great quality of life, you're not you're not gonna touch what um, unless you've been a really good saver of these years, you're not gonna be able to touch what these what the majors have in and benefits. Even if you're if you just never upgrade to captain, you just stay as a first officer. You should be able to be m maxing out that$70,000 a year into a 401k plan.

SPEAKER_05 21:16

Yeah, that makes sense. That's a good strategy to think of that's even something that I haven't even thought about, you know, just you know, being in that world like that. Um okay, so speaking on that, I guess what is like uh one of the biggest, you know, we work with a lot of pilots, we hear a lot of stories, especially you, because they come just directly for you half the time, you know, you get text messages and calls, all that kind of stuff, whether they're uh a client or not. So what's one of the biggest success stories that you've um that you've been told um about a pilot that started out early and kind of where they are now?

SPEAKER_02 21:47

Um honestly, I think success stories are always better told uh about the underdog.

SPEAKER_03 21:56

Yeah.

401k Allocation Guides Promo

SPEAKER_02 21:57

So the kid at 24 years old who got a job at Delta, he won the career lotteries, but I told him, I think you were on that call with me. He's like, dude, you just won the career lottery. He's like, Yeah, I know. That's what everyone keeps telling me. I'm like, dude, you don't even know how good you have it. I I'll I'll tell uh a success story um that started at ASA when I was back uh back then. And it and it's uh it's an existing client. Um, we'll call him John. His name's not John because we can't give out client names on a podcast. But I did some retirement planning for him, and he was three years away from retirement, mandatory retirement, 65. And every time, or I I told him it was one of those you've been a part of a few of these conversations with me where you have to deliver not so good advice. Or not it's good advice, but not so no not so good news.

SPEAKER_04 22:48

Yes.

SPEAKER_02 22:48

And I I remember saying, Okay, John, look, you have to credit 95 hours every month for the next three years. Like you can't fly less, you're gonna have to fly more. And at the regional level, that was at the time is a little harder. You know, different union rules, it's a little harder to get those credits. So uh credits is kind of like the number of hours, I guess. But sometimes you can fly a flight that gives you more credits and you get in flight time. So you might be doing a flight um uh for four hours, but the minimum day credit is eight. So you're gonna get paid eight hours to do that four-hour flight. So this is how pilots kind of make make extra money. You build high credit lines with low flying. That's the idea, right?

SPEAKER_03 23:30

Okay.

SPEAKER_02 23:31

So uh I would I I'd done the math with him uh using our software, and every time I felt bad because, like, man, this guy's he's gonna kind of barely get into retirement, but but he has to hit that 95 to do it. Can't coast. Harry had some health issues, um, which kept him out of flying for a little bit. But Concourse D at Hartsfield. So I did night stuff. So I'd fly in, I'd roll in at the airport at eight o'clock at night for like a nine o'clock departure somewhere. I'd fly it there, go to a hotel for maybe four hours, get up the next morning, fly airplane back, and then I was done. And then I would come back to work. So every time I saw John, he'd be like four gates over, and he'd raid his hand and he'd be like, Hey, I got my 95.

SPEAKER_03 24:14

There you go.

SPEAKER_02 24:15

I got my 95. I'd be on the train, you know, moving from like concourse D to C the gate change or something. And here's John. He'd like he's got he's a tall guy anyway. So you kind of pick him out of the crowd. Yeah, but he would see me go, I got my 95. That's so funny. So he had his 95, and um uh we got him there.

SPEAKER_03 24:33

Yeah.

SPEAKER_02 24:33

I uh we we we got him, we got him there. He got to retirement, he retired, he walked away. Uh and the good news for him is he kind of retired into a shortage.

SPEAKER_03 24:42

Yeah.

First Three Money Moves For Pilots

SPEAKER_02 24:42

And so all the instructors are now gone to fly. And so he actually picked up a nice uh instructing job.

SPEAKER_05 24:48

There you go.

SPEAKER_02 24:49

Uh, and he's he still does it. He's he's in his he's in his uh late seven or early 70s, and uh he gets to pick his own schedule. So maybe he instructs for a week out of the month or something, and he's still making 75 grand a year, barely working. And he's around airplanes and pilots, which we all love, right?

SPEAKER_05 25:06

Yes, we all love that.

SPEAKER_02 25:08

So yeah, I think that's that's one of my favorite success stories from from that standpoint. And then after that, you kind of have just the normal. Um I have another uh ASA guy that uh that came in, and uh we're trying to project out, you know, this uh three beautiful girls, they they live nearby, and I said, Hey, you know, this is what life looks like, this is what you gotta do, you gotta get rid of this debt. They had a lot of uh not a ton of debt, but enough to cause enough enough trouble. And they're like, Okay, okay. And then you kind of sense that the burden that was put on them on that meeting, and then they didn't really come back a whole lot after that. But then you got the job at at Delta, and he can't they came in, I redid their plan, and I said, Okay, um, this is now what the future looks like. This is in in the next 18 months, I want you to get rid of all this debt. And you know, the the wife sitting there with tears streaming down her eyes, and I'm thinking, okay, what did I do? As a man, I'm like, oh crap, made her cry.

SPEAKER_03 26:14

Not a kid.

SPEAKER_02 26:14

Oh, this is not good. You guys, but I think she's just it was it was like tears of joy, yeah. Of like, oh my gosh, like we don't have to live like this forever. This is before we had a big increase in regional pay. So you had a guy working his butt off and he's making like 80 grand a year, yeah, and he's never home, right? That's crazy. He had a small engine shop on the side, yeah. Uh, but I remember her just it just got tears in her eyes, like, like, we're gonna be okay. And then today they're doing they're doing great.

SPEAKER_03 26:44

Yeah.

SPEAKER_02 26:44

Um, so I I think that's uh they just stuck with it, you know.

SPEAKER_03 26:48

That's what you have to do.

SPEAKER_02 26:49

Uh we had a we had a family out of uh Salt Lake City that I that uh we did a review meeting with. They're probably about due, actually, but they they did a we we did a financial plan for them. Remember, we did our review meeting and all of a sudden all this debt was gone. And I was like, Did you just you're like, wow, did you guys just like uh just like not tell me about this dad? Like we're just pretend it's not there. But no, it was legit. It was all gone. And their projection is is huge.

SPEAKER_03 27:12

Right.

SPEAKER_02 27:12

So that that's amazing. Yeah, and it's and I can see those stories. And I don't do that much planning anymore. These are just stories that that you're hearing. That that I'm well, I did I did those three, but but um our team is doing all this with with pilots now. Um so I lose that yeah, I lose a little bit of that connection from the planning standpoint. But those are those are success stories from people who were probably gonna be okay on their own, but because they went through a planning process, they're gonna be much, much better off because they know where every extra dollar now needs to be going to be that much uh more free financially in the future.

SPEAKER_05 27:49

Yeah. Totally understand. Yeah, and I mean, thank goodness, like you just said, they did they did find us. They came here and they may have been good by themselves, but um, it is nice that they were able to find us and we were able to know their plan. But you know, on top of that, a lot of uh we hear a lot of pilots, they come in and they're like, Oh, I was with someone previously. Um, they were managing my assets, manage my 40 401k. Um, and you know, some maybe they don't know. They're like, oh, managing a 401k is normal. Sure, I'll give it to you. Yeah. So like, how are they supposed to what are some like precautions that you can give them, or how do you know that you can trust the financial advice that like you're getting from someone, especially as a pilot?

How Major Airline 401ks Differ

SPEAKER_02 28:30

Yeah, I think that's where our firm is the best. I don't think there's anybody out there that can give any better advice to financial advisors other than Wiser Wealth Management. Um, there there probably is, but here's the problem I have with them is that they're charging a fee for 401ks to be managed. And I I just have a I have a big problem with that. Um Unions worked really hard to get 401k plans built the way they are. There's RI committees at every airline that has the uses the airline pilots association, and these are things that the committees have asked for and eventually have gotten um out of the airlines over over the years, and it's not necessarily contractually uh organ um negotiated, but but it's like, hey, Mr. Airline, can you guys do this? And if you do it for the pilot, typically you're doing it for management too, because they sometimes also share the same plans. But if you're a 34-year-old pilot, and I only say 34 because that's when I did the math, um, if you're a 24 pilot, it's even worse. But if you're a 34-year-old pilot and you work till 65, if you pay a 1% management fee, you're gonna spend over$3 million in fees.

SPEAKER_03 29:43

Yeah.

SPEAKER_02 29:43

And I don't know what for exactly.

SPEAKER_03 29:46

Yeah.

SPEAKER_02 29:47

Because what they do is they pull your money out of the 401k and they put it into the brokerage link assigned to the 401k. They often invest, I've seen all the portfolios these other companies use. They often invest in the exact same. Type of funds like the S P 500, small caps, foreign, but they're doing it in funds that cost you five times what the plan has. Right. The only reason why they don't do it inside the 401k plan, and they kind of say, oh no, we have more options outside the plan. You can't get more options than the SP 500. You can get a lot of different SP 500 index funds. They all use the SP 500, but it costs you 0.01 of a percent per year in all the major airline 401k plans. But yet it's going to cost you 0.15 or even 0.05 outside the 401k plan. Um, so that just doesn't make any sense. Uh and then they say that okay, we can allocate this differently. And I've I've never seen a portfolio that can outperform the basic investment advice inside the 401k plan adjusted for risk. Right. I've never seen it. And there's not a reason why during your wealth building stage that you need to have these companies managing your airline 401k plan. Like I said, I give away that information for free. It's on there on the website. Um and and and if if you go through the planning process, we're gonna log in with you and make sure all everything gets changed.

SPEAKER_03 31:12

Yeah.

SPEAKER_02 31:13

Uh the other, the other unfortunately, the other part of this is the in-depth financial planning, which we have lots of podcasts where you can download about our philosophies on on uh the the financial planning point. But um that's the part they're not getting. So they're managing assets and there's this false sense of security that everything's okay. Right. And everything may be okay, but you don't know that it is okay.

SPEAKER_05 31:36

Um planning.

SPEAKER_02 31:38

Right. They haven't looked at your property casually, they haven't looked at your your insurance, they they haven't looked at your estate planning and gone line by line to make sure it's what you intended.

SPEAKER_05 31:46

Right. And they don't even know your goals, what they're allocating for.

SPEAKER_02 31:49

Right. Do they know what is important to you and what you would have accomplished by the time you're eighty years, eighty years old? Probably not. Uh, I mean, it's cool to be able to talk about airplanes. I do that too. Unfortunately, you know this, but but at the same time, you have to get back to the blueprint. And most people don't have the blueprint. Yeah, and that's what we're delivering here at Wiser. I think that's what makes this unique, is is the blueprint for for the aviator and his family uh uh to be able to to kind of live their life by as as they as they go forward. And hopefully we can recession proof their their finances and and furlough proof their finances by by making sure that uh all the all the boxes are checked, right?

SPEAKER_05 32:27

Yeah. I totally agree. Um okay, so well to wrap up our our pilot conversation to the pilot listening, what would be one thing that you told them to do this month um that would improve their finances or to head towards an improvement of their finances?

SPEAKER_02 32:44

Um I well, I think the number one thing is asset allocation is so important. Stop stop picking your own stocks in the brokerage link, stop turn off uh portfolio management, go download that that free allocation for your airline, go go invest that. I think that's the first thing that doesn't benefit our firm. You know, uh if there was a one A to that, I would say go complete financial planning and then update that every few years. That that would be important. Uh but I think the number one thing is let's get the allocation right. Um, because most pilots that are listening to a podcast about wealth management for pilots probably don't have a whole lot of debt, I'm assuming. So that's not the first priority.

SPEAKER_03 33:24

Yeah.

SPEAKER_02 33:24

Uh, but you might fly with ones who who do.

SPEAKER_03 33:27

Yeah.

SPEAKER_02 33:27

Um, which by the way, I have a we're about to roll out our first book.

SPEAKER_03 33:31

Yeah.

SPEAKER_02 33:32

Uh I have an idea for the second book already. And it's bad decisions made at bad financial decisions made at 30,000 feet.

Underdog Success Stories

SPEAKER_03 33:39

Yeah.

SPEAKER_02 33:40

Because that's that's what like loads up my phone every single week is oh yeah. Hey, I just flew with a guy, or I just flew with a girl, and this is what they're doing with their money. Should I be doing this? And the answer is almost always no, or the answer is that's great. Uh, but no, that does not apply to you.

SPEAKER_05 33:57

Yeah, I know. I remember you you would make jokes like during like a consultation or something, and you're like, Yeah, I always hear I flew with a guy, I flew with a girl. And then I really started hearing it in like consultations. I was like, wow, this is so true. Yeah. Um, but yeah, so yeah, exactly. If you're if you're flying with someone, they may need a free allocation or be told to get rid of your debt.

SPEAKER_02 34:18

I know I know there's a few guys that do ground school, and I can always tell when he's doing ground school because there's an influx. Usually we get 20 downloads so a week of of it, but I know when I see like like 85 downloads, I'm like, oh, everyone goes this is a requirement. Everyone's like, yo, I should do this to make sure I pass my ground school this time.

SPEAKER_03 34:33

That's a really funny.

SPEAKER_02 34:34

And usually I get an email later, hey, I told I talked about you in my ground school today. And I'm like, Yeah, I figured there's tons of downloads.

SPEAKER_05 34:43

Well, I agree. That is a great piece of advice. So um definitely go and do that. But thanks for listening to today's episode. If you're interested in learning more about wiser wealth management or want to schedule a consultation to meet with one of our fiduciary financial advisors, you can do so by going to wiserinvestor.com or by clicking the link in the episode notes. See you next week.

SPEAKER_02 35:02

See you next week.

SPEAKER_00 35:05

Thanks for listening to a wiser retirement podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to wiserinvestor.com and reach out. This podcast is strictly for informational purposes only and is not to be considered as investment advice or solicitation to buy or sell any financial products, securities, digital assets, or any other investment vehicles, or a basis to make any financial decisions. Wiser Wealth Management Incorporated is a registered investor advisor with the SEC. The host and or guest may personally own securities, digital assets, or other investment vehicles mentioned on this podcast. Neither the host nor guests of the show are compensated for their participation, and no referral fees are paid to or received by any host or guest for clients, listeners, or similar interests. Investments involve risk, and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional, andor legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.