The Pilot Money Guys

15 Lessons Aviation Can Teach You About Life: 1. You are responsible. 2. Attention is life. Inattention will be at least minimally harmful if not deadly. 3. There is always a curriculum. Preparation is advised. 4. A well-lived life, like flying, requires constant adjustments. 5. Think before you speak or key the mic. .... Listen for more. Q&A: Most common client questions lately: o Headlines – Beware! ▪ See housing market headline from Redfin o Headlines are meant to make you fearful. They have about three seconds to grab your attention in the world of fast-paced news. You will often see over-the-top headlines that are not even related to the article itself. o For example, "Redfin predicts sharpest turn in housing market since 2008 crash" ▪ If you actually read the article here is an example of the content: • "...for the first time since 2021, the average home is selling for less than its list price..." • "While home prices are still higher than a year ago, with the average home now selling for just under $370,000, inflation and high interest rates are slowing down the market." Please sign up for our monthly Leading Edge-Read-Before-Fly Newsletter and Rate and Share our Podcast. 1. Please sign up for our monthly pilot newsletter: Leading Edge "Read Before Fly" • Go to Leading Edge Planning.com and sign up for our monthly pilot newsletter. Pop up or click on contact us... • Scroll to the bottom of the podcast page, click on "The Pilot Money Guys" then "Subscribe" in the upper right corner. 2. Please rate and review our podcast... • Step one – Hit "library" then "shows" then hit the thumbnail pic then, scroll down to the bottom of our podcast feed on iTunes • Step two – Hit the 5th star on the rating. • Step three: look slightly below that area and hit "Write a review" ... • Step four: type something (awesome and funny) in and hit "send." • I've learned that it knows when I've personally rated and reviewed the podcast more than a dozen times... What's the best path for young aspiring pilots? Cargo, Passenger, Fractional, Military? Common questions and points-to-ponder when deciding which path is right for you. • Do you enjoy long-haul flights that may last six to twelve hours? • How long are you comfortable being away from home? o Oftentimes, cargo pilots are gone for longer periods of time but they may also get large chunks of time off. For example, ten days on and ten days off. o Fractional carriers like NetJets typically work seven on and seven off. o Southwest Airlines' typical schedule would be three days on and four days off. • What are the differences in pay? o You'll probably make more at the cargo carries since most of the flying is wide- body, international. o You'll probably make less than average at fractionals but you may enjoy the type of flying more. For example, it is much more dynamic and less rote from day-to- day. Many people that have a passion for general aviation love the type of flying at a fractional carrier. • What type of commute should you expect? o For example, if you fly for FedEx or UPS, your bases will be very limited. So you'll probably be a commuter. o NetJets will fly you on a commercial carrier from your home to wherever your trip begins. o Either way, the panel of pilots agrees, living where you are based can greatly increase your quality of life and increase your income. Tune in for more details and differences in the types of commercial aviation.

Financial Q&A: Most common client questions lately: 1. How to get some sort of return/interest for short-term goals? 1-5 years? a. I-Bonds: Currently paying an annualized 9.62% for the next six months. https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#:~:text=The%20composite%20rate%20for%20I,October%202022%20is%209.62%20percent. b. Treasury Bills: Payingabout 2.8%-3.4% depending on the term. https://ycharts.com/indicators/3_month_t_bill https://ycharts.com/indicators/1_year_treasury_rate c. Treasury Bonds: https://ycharts.com/indicators/2_year_treasury_rate#:~:text=Basic%20Info&text=2%20Year%20Treasury%20Rate%20is%20at%203.42%25%2C%20compared%20to%203.37,long%20term%20average%20of%203.14%25. 2. Should I stop saving and investing since the market is tanking? a. No! This is the best time to save and invest. Buy low! Stay invested, even when it's difficult because the stock market tends to recover quietly. There is no magic signal or announcement that the stock markets are doing better. Special guest Darren Ellisor: Darren Ellisor is a Captain at SouthwestAirlines with over 11,000 flying hours. He started flying for Southwest in 2008 after serving more than 10 years in the active-duty Air Force. Darren graduated from the US Air Force Academy in 1997. In the Air Force he flew multiple versions of the Boeing707, accumulating the majority of his time in the E-3 AWACS as an Instructor and Evaluator Pilot. In the E-3, he flew numerous Combat Support flights during Operation NOBLE EAGLE and during middle east deployments for Operation NORTHERN WATCH, Operation SOUTHERN WATCH, and counter-drug operations. During tours at Tinker AFB, OK and Geilenkirchen NATO Airbase, Germany, Darren worked as Squadron Chief of Standardization and Evaluation, as well as Squadron Chief of Flight Safety. He was named Pilot of the Year at Geilenkirchen in 2004. On April 17, 2018, Darren was flying with Captain Tammie Jo Shults from LaGuardia to Dallas-Love on Southwest Airlines Flight 1380. Climbing through 32,500 feet, the number one engine exploded, causing shrapnel to damage much of the left wing and a passenger window to blow out. The aircraft banked more than 41 degrees to the left and experienced extreme aircraft vibration, hydraulic malfunctions, and an explosive decompression of the cabin. Darren, who was flying the aircraft at the time, recovered from the ensuing unusual attitude and started a descent. He worked alongside Captain Shults and their flight attendants Rachel Fernheimer, Kathryn Sandoval, and Seanique Mallory to safely make an emergency landing of the crippled jet at Philadelphia International airport—saving 148 lives. One passenger was unfortunately killed in the accident. In his free time, Darren has volunteered as a Cub Scout Pack Leader and as a Little League baseball coach. Darren and his wife, Jennifer, live in League City with their four children.

The Basics of Roth Conversions 1. In General, young, lower income (e.g., new First Officer) expect a higher tax bracket in retirement...Roth can be a no-brainer. a. But there are other very important considerations that may go against this rule of thumb. 2. Important to know – Everyone, regardless of income, can contribute to an after-tax or nondeductible IRA. 3. What are my options if I only have pre-tax IRAs? a. Convert the pre-tax IRA to a Roth IRA, and you will be taxed at your marginal income tax rate. Or... b. Roll the pre-tax IRA into your 401k, then execute back door Roth the following calendar year. 4. What are my options if I have after-tax IRA contributions? Also known as "basis" in your IRA. a. Convert to Roth and pay fewer taxes than you would if all the IRA were pre-tax. b. But you must know your basis. Sometimes, that can be a challenge to figure out. 5. Roth Conversions are more advantageous when markets are down. a. You will pay less taxes on the conversion. Vanguard's Article - "A BETR approach to Roth conversions" Click here for the full article. (see below for hyperlink address) 6. Three situations in which the BETR (break-even tax rate) is lower than the current marginal tax rate: In other words, making a Roth conversion when your future tax rate will be lower than your current tax rate. a. When a conversion tax is paid from a different account. i. In this case, the longer the investment horizon, the lower the BETR. ii. How you pay the tax on the Roth conversion really matters. Paying the taxes from your cash flow or a tax-inefficient investment account is ideal. b. When the traditional IRA includes non-taxable basis. c. When the conversion of the traditional IRA opens the "back door" to future Roth contributions. 7. Future tax rates are only one consideration for Roth conversions. What are other valuable considerations? a. Flexibility in retirement; example, large purchases-house purchase, build. b. Estate planning – pass on Roth to your children – 10-year required minimum distribution RMD (Required Minimum Distributions) requirements. c. Tax diversification in retirement. "Most investors will benefit from tax diversification by holding taxable, tax-deferred, and Roth accounts" ... (also HSA (Health Savings Account)) Bonus! 8. What is the Mega-Back Door Roth? a. Some employer 401ks allow for after-tax 401k contributions. If so, you can contribute above the normal 401k contribution limits and then convert those contributions to Roth 401k. 9. What is the next best option if I cannot save in Roth 401k or do Roth conversions? a. Health Savings Account (HSA) - The only account that is completely tax-free. b. Taxable Brokerage Account. I.e. a non-IRA investment account. WARNING: Tracking Roth IRA conversions on your tax return is not easy. Many tax professionals struggle in this area. If you do not document after-tax IRA contributions and Roth conversions correctly on Form 8606 in your tax return, you will highly likely get a letter from the IRS saying you owe some taxes. Even though this situation can be rectified with proper documentation, it is never fun to get a letter from the IRS! https://institutional.vanguard.com/insights-and-research/report/a-betr-approach-to-roth-conversions.html#:~:text=The%20traditional%20wisdom%20has%20been,investor%20indiff erent%20to%20a%20conversion

In this podcast, we discuss steps to maintain a high-performance, high-energy lifestyle as we get older. More specifically, creating a life where you feel great, more fulfilled, and more joyful as well as creating a legacy with not just your wealth but your health and outlook on life for generations to come. Our audience is high-performing professionals and pilots, BUT we all go through times where we are not performing at our peak; mentally, spiritually, physically. Especially as we age... Now is a unique and stressful time for airline pilots, corporate, cargo, and commercial pilots. Most major airlines are under contract negotiations –stressful! Flights have been full, chronically late with angry passengers. Flying has not been a fun place to be in the last 2 years –post-Covid. Ron Broyles is our guest today because he is walking the walk. He is 69 and full of life, energy, joy, and fulfillment. How do we as pilots maintain the mental and emotional toughness to maintain our quality of lives, enjoy our families and feel a sense of joy and peace during these difficult airline times? Why bother with health, nutrition, positive mental attitude? We are in a race...we are meant for growth. It is as if we are in a highly competitive game or fighting for our peace of mind, focus, finances, health, and joy and we don't even know it. Every entity in our lives is fighting against us having those things, and we are not fighting back. We know this as being intentional or proactive. Marketing agencies, social media, news media are fighting for your time, money, attention –your mind and they are playing with PhD level minds and huge supplies of money. We are not equipping ourselves to win! We need to be intentional about training to win the fight. We need to take proactive, aggressive steps to live a life of purpose on purpose. Why not? Choose your "hard"...Life is hard when you eat right and exercise and choose to be joyful. Life is much harder when you simply drift along allowing life to happen to you. You will leave a legacy in every aspect of your life whether you know it or not. Your health is your wealth! Seven practical steps for maintaining physical, spiritual, and mental health: Realize you are one or two choices away each day for either building a great life or living a life of mediocrity or worse chronic unhappiness and bad health. Healthy relationships and accountability partnerships. Ask someone to help you stay on track. Similar to AA and Weight watchers. More importantly, someone you can share your feelings with –seriously! Men are especially bad at this and it's bad for your health. Get a workout instructor. See a counselor. Don't minimize your emotional health – Do not try to John Wayne through it! Be intentional about the feelings you want – Happy, joyful, peace, love, anger... Studies have even shown that unhealthy anger in its repressed state has been linked to cancer. Sigmund Freud – "unexpressed emotions will never die. They are buried alive and will come forth later in uglier ways." This is one of the most underestimated keys to our quality of life. Nutrition - Read the labels on your food and understand what you are eating. You can't outwork your bad eating habits as you get older! An attitude of gratitude leads to a healthy life! Write down three things a day Give! Give away some of your money, some of your time or both. Your perspective will change. The importance of physical activity and exercise! Links to some of Ron's Adventures: https://coronadotimes.com/news/2013/07/17/1986-flashback-thrill-junkie-ron-broyles-jumps-from-coronado-bridge-from-limo-roof-video/ https://www.youtube.com/watch?v=iaXM7WmIuQg https://www.latimes.com/archives/la-xpm-2003-oct-15-me-bike15-story.html https://www.nytimes.com/1983/03/15/us/stuntman-scales-tower.html https://www.knoxnews.com/news/local/mad-jack-fielden-turned-furniture-sales-into-stunt-work-ep-360004879-356614601.html https://newspaperarchive.com/altoona-mirror-mar-15-1983-p-24/ Books or Podcasts that we mentioned or recommend on this topic: Atomic Habits by James Clear The Power of One More, The Ultimate Guide to Happiness and Success Ed Mylett The Infinite Game by Simon Sinek Salt Sugar Fat: How the Food Giants Hooked Us Michael Moss Sickening: How Big Pharma Broke American Health Care and How We Can Repair It. John Abramson, MD, MSc Can't Hurt Me David Goggins Favorite podcasts Ed Mylett –The Ed Mylett Show Jon Gordon –Positive University Podcast

Leading Edge's own, co-founder and CFO, Kevin "The Professor" Gormley, CPA, PFS, CFP® is our special guest today. We think of a 5-year runway to take off for retirement. It can take that long to mentally prepare for the end of your career. It also may be enough time until retirement to make significant course corrections if necessary. At a minimum, this is the time to make sure you run that last Before Takeoff (retirement) checklist, and you are ready for a great retirement! A quick peek into the discussion with the Pilot Money Guys and "The Professor." Understand the difference between risk tolerance and risk capacity. You may not have the capacity for investment risk at age 60 due to your income requirements in retirement. You should have an idea, the more clarity the better, on how much you want or need to spend in retirement. You need to know if your portfolio and other sources of income can support your desired level of lifestyle spending in retirement. What is the best way to ensure you do not run out of money in retirement? One way is to use a Monte Carlo analysis. But you must understand what the results actually mean. As you head into retirement, it may be beneficial to have the required spending needs in retirement covered by guaranteed sources. This includes military pensions, social security, and possibly annuities. The good news is the annuity marketplace now offers commission-free annuities!

In this episode, the Pilot Money Guys are talking about Value investing. We describe what value investing is, and talk about lessons learned as investors in value companies. Value Investing and Lessons Learned Even though past returns are not indicative of future performance, Value investing has shown to do well during periods of higher inflation. The recent poor performance of Value investing is almost unprecedented. Therefore, making it difficult to stick with a disciplined, diversified portfolio. Do not give in to FOMO when selecting your investment strategy. The recent run-up in Growth Stocks was partly fueled by FOMO. Most of the time when investing based on your emotions instead of a disciplined strategy, investors end up buying high and selling low. There is no evidence that investors can use investment timing techniques to switch from growth to value to take advantage of higher returns. You have to stay diversified even when it feels painful to own underperforming asset classes. It is very dangerous as an investor to assume that you know things that are unknowable. For example, we do not know for certain which asset classes will outperform in the future. Investors must remain humble, be prepared to be wrong and understand that there will always be information in the news, social media, YouTube, etc. that may seem to confirm our false beliefs. When markets are volatile you may have opportunities to rebalance into the pain. For example, when international or value asset class is performing poorly, you can sell your winning asset classes and purchase assets classes that have not performed as well. This is counter-intuitive, and takes discipline but results in buying low and selling high.

In this episode of the Pilot Money Guys we sit down with Peachez, aka Micah Porter. Micah is a former Top Gun Navy fighter pilot turned Air Force fighter pilot and current UPS pilot who sheds light on what its really like in Top Gun and how he rates Tom Cruise's performance in the new movie. We hope you enjoy a break from the financial topics - this is a fun one! We'll be back next time talking Value Investing on the next episode. Thanks for listening! The Pilot Money Guys

We're calling this episode of the pilot money guys "Forever in Blue Jeans" because as the famous song goes: "Money talks But it don't sing and dance and it don't walk And long as I can have you here with me I'd much rather be forever in blue jeans" In this episode we discuss the Florida man who lands a plane with no experience, we have a Q&A segment, and we have a heart felt discussion about creating lasting and fulfilling success with finances. Thank you for listening!

In this episode of the pilot money guys, we are talking about the yield curve inversion that has been the topic of many new articles recently. If you're unfamiliar, an inverted yield curve is supposed to be the magic predictor of a looming recession. Recently the yield curve inverted, so is a recession on the horizon? Charlie and Rob dive into the yield curve topic and cover in this discussion: What is a yield curve? What if it points to a recession every time? If it was 100% reliable, would that change how we invest? Are there any actions steps that we can take now that the curve has inverted? With recession talk ramping up, inflation continuing to rise, and investments dropping rapidly, now is a good time to review your saving, investing, and retirement plans. If you are nervous about the current situation, please give us a call. We'd love to talk about your situation and how a plan will help give you peace of mind. Thank you for listening to our podcast, The Pilot Money Guys

We're all going to die... Someday. Yes, this is not a fun topic to cover, but unfortunately we've dealt with a few deaths over the last 12 months and we want to talk about the lessons we've learned. We get philosophical in this one, but we think it's extremely important! Top 5 things to do to make sure you take care of loved ones when you've gone: Beneficiaries Life Insurance How do you access each account? Where are physical documents located? Accounting – Financial Assets and Liabilities Develop a Plan for Minor Children. Bonus: Write a letter...

The majority of 401(k) plans are invested in Target Date funds. These funds give diverse exposure in stocks and bonds, and as we get closer to the target retirement date, the fund automatically adjusts as to be more conservative. This has helped many people to avoid the stress of picking funds in their retirement plan, as well as helping to protect the funds as retirement gets closer. Many times, these funds has low expenses, and they often get close to market returns. So, are these funds right for you? In this episode, we are diving into target date funds and giving reasons why they may or may not be right for you. Thank you for listening! The Pilot Money Guys

In this episode of the Pilot Money Guys, we discuss the Frontier - Spirit Airlines merger, where investment returns come from, and why Cowbell should permanently replace Rubber Mallet. (Ok maybe not this...). In this podcast, we are joined by Carson McLean, CFP®. Carson is a regional director with Dimensional Fund Advisors, and a true expert in the industry. We're so excited to share our conversation and want to give a big thank you to Carson for joining us. We cover everything from callsigns to the history of index funds, so sit down, buckle up, and enjoy the flight! If you have any questions, concerns, or feedback, please give us a call at 865-240-2292 or send us and email to [email protected]. If you feel uncertain about your financial future, we'd love to connect. Schedule a time to talk at https://www.leadingedgeplanning.com/bookmeetings/ Thank you so much for listening! The Pilot Money Guys