#62 - Pilot Math: Wealth Strategies for Aviators with Jason Depew

[00:00:00] Welcome back to Passive Income Pilots everyone. Tait Duryea here with my good friend Ryan Gibson.

[00:00:04] They say don't take investment advice from a pilot is what they say. Well, you know what we're

[00:00:08] going to do? We're going to bring a pilot on the show and talk about investing stuff. How about

[00:00:11] that? I'm doing great. We're breaking the mold. I just want to just get that out in the open.

[00:00:15] Right. That's like kind of the old adage, don't take investment advice from a pilot. But

[00:00:19] I think this episode is all about why it's really not true. I mean, you shouldn't listen

[00:00:25] to every little thing somebody says, but I think it's just this episode is a great reminder of the

[00:00:29] context we're providing you with and the education community that we're providing you with to think

[00:00:35] about things you can do with your retirement plan, your savings, syndications, investing,

[00:00:39] angel investing, all these things. And that's the whole point of the show. And what I love

[00:00:43] about Jason who's about to come on is he's giving perspective as an airline captain. And so

[00:00:48] I just really love the perspective he provides and the life he's really created for himself

[00:00:53] financially. It's amazing. Yeah. And typically we say don't take financial advice from a pilot

[00:00:58] because pilots think they're experts in everything, right? When truly they may be experts in a few

[00:01:03] small areas. And there are plenty of pilots out there that have lives outside of the airlines

[00:01:09] and are very smart about things sometimes financially related. So brings us to our guest

[00:01:16] today. Jason Depew is a 737 captain of US major airline. He also does part-time flight

[00:01:22] instructing in the ICON A5 and he's written for the pilot network, pilot pipeline and flying

[00:01:29] magazine. He was an active duty military member flying TGA-4s, TG-10, B, C and D models,

[00:01:38] B1 bombers, U-28s, T-6s. He's flown over 300 combat missions over Afghanistan,

[00:01:44] San Jose, and elsewhere. And now he does... Exactly. Yeah. It's the later years if you've

[00:01:50] ever seen that Saturday Night Live skit now. But now he does... He's still in the Air Force reserves

[00:01:55] and he's written a book called Pilot Math Treasure Bath, which he self-proclaims

[00:01:59] as a silly name for a financial book. But what I really love about that book and his website

[00:02:05] is that he breaks down in spreadsheet format the math behind the investment decisions that

[00:02:12] you make and the possibilities that are out there if you take the time to learn, make

[00:02:18] good decisions with the absolute cash volcano that you're sitting on as an airline pilot.

[00:02:24] Brian, anything else? Any other thoughts before we jump into the episode? I love the fact that

[00:02:27] at the end we talk about how our opinions are subject to change and I want to address that

[00:02:32] right now. I always say run into anything that you do with an open mind. We had an

[00:02:37] episode we recorded earlier where a little down on the cash balance plans and we do

[00:02:40] talk about that in the show today. And I have a better perspective on them now. I look

[00:02:46] at them a little differently than I did a few months ago and I think that's important to have

[00:02:50] an open mind and be opinionated about things but seek to understand what it's all about.

[00:02:55] And I think we're going to unpack that later in the show and there's some good things about

[00:02:59] it. There's some strategies around it as well. So have an open mind is all I'm encouraging

[00:03:03] listeners to have. Yep, definitely. And seek more research. What we do, what we talked

[00:03:07] about here is we open Pandora's box for you, right? But if you really want to find out

[00:03:13] more, go talk to your retirement committee at your union to get all the facts. Have a

[00:03:18] conversation with a financial advisor that you're working with and really do the math and create

[00:03:22] a strategy. Don't just sort of make form an opinion based on one of our opinions and then

[00:03:27] run away with it. So some really good information in the show. Let's get started.

[00:03:33] Welcome to Passive Income Pilots where pilots upgrade their money. This is the

[00:03:39] definitive source for personal finance and investment tactics for aviators. We interview

[00:03:44] world-renowned experts and share these lessons with the flying community. So if you're ready

[00:03:50] for practical knowledge and insights, let's roll. Jason, thank you so much for coming on

[00:03:54] the show. We appreciate you lending us your time. Thanks. Great to be here. Yeah. So you

[00:03:59] are a fellow airline pilot. As we said in the intro, you have quite the pedigree both

[00:04:05] flying and in the financial world. But do you want to give us a little bit of background

[00:04:09] from your perspective? How did you get into flying and how did you get into finance?

[00:04:13] Yeah, I started flying with the Air Force basically, did 11 years active duty,

[00:04:17] got out in 2016 and started flying for my airline. So I'm a 737 captain now about halfway

[00:04:22] up my seniority list and life is amazing there. So it's pretty nice. Along the way, my wife

[00:04:27] and I made some money and wanted to invest it. And so we started doing a lot of self-taught

[00:04:31] investing, learning about investing. I ended up starting to write about getting hired at

[00:04:36] airlines for the pilot network and a couple other places. And as I started writing about

[00:04:40] airline pilot topics, pilot finance started to come up more and more often.

[00:04:45] And so I ended up writing a lot about pilot finances and researching a lot about pilot

[00:04:49] finances. Ended up writing for the pilot network in a couple other places, wrote a

[00:04:52] little bit for Flying Magazine for a while. The column didn't really take off, but it was

[00:04:56] fun to work with them. I ended up actually writing a book and publishing my own book about

[00:05:01] personal finance for pilots trying to, when I started with my airline, I flew with a lot of

[00:05:06] old guys who had made a lot of less than optimal decisions in life and were in a tough spot.

[00:05:10] And I didn't want people to have to repeat those mistakes. And now that I'm a captain

[00:05:15] in the most junior base in my company, I fly with a lot of new pilots. And they're

[00:05:18] these people that are spending every penny they make in and accounting for future raises

[00:05:22] for spending and hoping to instill some desire to invest with those guys too, those guys and gals.

[00:05:29] So that's my focus is just helping pilots make good choices.

[00:05:33] There is no more noble cause than that of financial education because it's not something

[00:05:39] we get in school, right? And that's Robert Kiyosaki did it for all those years. And

[00:05:43] I feel like the airline pilot crowd is just something that you hit the nail on the head

[00:05:47] there. So how did you end up writing for Flying Magazine? And what have you written for them?

[00:05:53] That was a, it's a fun story. So I also as a side hustle teach in the icon, a five,

[00:05:59] I teach for the company and I'm a factory authorized instructor. They have a program like

[00:06:02] Cirrus does. And so I ended up going all over the country flying with owners in their location.

[00:06:08] And one time I got called to go fly with this guy named Craig and I go fly with him.

[00:06:13] And we start talking about finance and writing and all this. And he happens to mention that he just

[00:06:18] bought Flying Magazine as a flying along in his icon. And I was pretty impressed and we excited

[00:06:24] about that. And a little bit later, we talked about all the writing I've been doing. He said,

[00:06:28] Hey, you want to try writing for us for a while? Absolutely. It was a great honor to

[00:06:32] to work with him and his team. It was really cool, cool experience. He is a fun pilot,

[00:06:36] really sharp businessman. I've actually learned a lot just watching him build

[00:06:41] flying and that brand pretty recently. Jason, what would be your advice? Your number one

[00:06:46] reoccurring thing that you would tell that new hire that's sitting in the right seat with you

[00:06:50] on the seven three who's right out of IOE and flying their first trip fully.

[00:06:56] Yeah, I tell people, I tell everybody the same thing. Be intentional with your spending.

[00:07:00] I don't think people need to live on rice and beans and save every penny,

[00:07:04] but be intentional about what you spend money on. Right. And then as your income increases,

[00:07:08] save the rest and maximize your tax advantage accounts and invest the rest.

[00:07:12] And the more you can invest, the sooner you can reach that turning point of financial

[00:07:15] independence. Right. And once you hit that point, life changes drastically.

[00:07:20] You're no longer beholden to your employer and your contract and the drama of everyday life.

[00:07:26] It's just it's really freeing. So I try to inspire people to pursue that.

[00:07:30] I have a trick that I've never shared on the show.

[00:07:34] That I've been sort of holding my back pocket for the right moment. And it's a saving trick

[00:07:39] that I used when I was a newly upgraded captain and I was trying to pour all my money into real

[00:07:45] estate. And what I did was I took my hourly pay rate. And first of all, I took my gross

[00:07:52] and net on my paycheck. Right. So I figured out, OK, what am I paying? What am I actually

[00:07:56] getting paid after taxes? What is that ratio? So you take the small number and you divide

[00:08:01] it by the big number. That's going to come up with a decimal point. You multiply that by your

[00:08:05] pay rate. And what I would do is I'd turn every purchase into an hour. Like how many hours do

[00:08:12] I have to work? So if I wanted a new pair of sunglasses that were 216 bucks, I would

[00:08:18] count that. I'm like, OK, do I want to go fly airplanes for this number of hours or this

[00:08:23] number of minutes to afford that? And when you back that out, it's OK. That's going to

[00:08:27] be a half hour. Well, on a 90 hour month, like that's actually a significant chunk of

[00:08:32] your entire paycheck over that month. Right. So now obviously I've gotten a lot more sophisticated

[00:08:37] with tax strategy and I've got irons in the fire everywhere. But it's because

[00:08:41] I was very diligent for many years and I use that strategy of, OK, convert your pay rate to

[00:08:49] instead of thinking of it in dollars, think of it in hours and minutes. So that could be

[00:08:54] something that's useful to that new first officer that wants the shiny new car or something

[00:08:59] like that. Convert it. How many hours is that? One of my favorite personal finance books is

[00:09:04] Your Money or Your Life by Vicky Robin and Joe Dominguez. And they do that idea too. They

[00:09:10] go through an exercise and you quantify the hours of your life in dollars and think in

[00:09:15] terms of hours of life. Was there a pilot or a captain that kind of inspired you to be financially

[00:09:20] more efficient and acute? Nobody in particular. There were some less than optimal examples and it

[00:09:29] was really frustrating to see them because they'd worked their whole lives and they had this

[00:09:32] great job and everything I aspire to be professionally, yet they don't like their job anymore.

[00:09:36] And it's not fun because they're scraping for every penny. And I felt bad.

[00:09:40] I can relate to that. I don't think there was any person who I sat next to who had

[00:09:46] really great financial knowledge. It was just a bloodbath of people who didn't get it right.

[00:09:51] And I said, I don't want to be like them. Yeah. And we're not saying you can't have the

[00:09:55] toys. It's of course you can have the boats and the cars. It's just that if you're smart

[00:09:59] now about it, then you can have all that stuff without working for it later.

[00:10:03] You can have even more boats and even more cars and airplanes later on.

[00:10:06] And you don't ever have to worry about making ends meet at that point.

[00:10:09] So how do you build this financial independence and you're still flying and

[00:10:14] how are you benefiting personally from it? Are you flying less? Are you taking more

[00:10:18] vacations? What's your personal life like? Yeah, I am a fly less for less money kind of person.

[00:10:24] And I love it because anytime my family wants or needs me to be home,

[00:10:29] I just drop trips and stay home. And the month of as much as I do one trip.

[00:10:35] This month I'm flying a couple trips and then a premium trip,

[00:10:38] a green slip popped up early in the month. So I took one day,

[00:10:40] one day. So that's good. It's just for fun.

[00:10:44] And is it because you feel like you've satisfied the nest egg at age 60 or 65 or something,

[00:10:51] or do you have cash flow or dividends paying every month that gives you sort of that barbell

[00:10:56] strategy of I have enough in retirement, I have enough in cash flow, or is it a combination

[00:11:00] thereof? It's a combination. I love the work you're doing here, you guys talking about

[00:11:05] passive income, right? Building these streams of income. And my wife and I have been working

[00:11:09] on that for a long time. We've got a couple rental properties and we've invested in some of

[00:11:13] turbines syndications. I'm looking forward to investing in Spartans as well.

[00:11:17] But we also have built up a big nest egg over the years. And that's what

[00:11:21] in general society does, right? So we were in the military and we have the thrift savings

[00:11:24] plan, which is like a 401k. Now I'm an airline pilot, so I have a 401k and my wife has

[00:11:28] her own. And so we do have this big nest egg built up also. And we've done a good job

[00:11:32] of saving and investing. And there was good rules of thumb out there on the size of your

[00:11:37] nest egg. Take that 4% and you can live on that 4% essentially indefinitely. And we've reached the

[00:11:43] point where we're good. We could cover our basic spending needs forever. And so if we never work

[00:11:48] another day at all, absolutely fine. And I love that it's so freeing. And so now when I go

[00:11:52] to work, it's just for fun and just for extra money. Can you dig into that 4% and

[00:11:57] more on that concept of sort of like infinite, it's infinity, right? Because you hit this

[00:12:03] tipping point where you have enough that you can just live off the interest, right? Never work again.

[00:12:08] Do you want to expound on that? Yeah. Some really smart economists at Trinity University

[00:12:14] years ago did a study and their goal was to say for investment planning, if a person retires at

[00:12:19] age 60 and dies at age 90, how much of their nest egg can they spend each year and not run

[00:12:24] out of money in that 30 years? So what they did was they looked at every 30 year period in

[00:12:28] the history of the stock market and they said what withdrawal rate was safe so that the money

[00:12:35] would last for the full 30 years. And what they came out with is most of those periods,

[00:12:40] you could spend 7%, 8%, 9% of your initial nest egg value each year and it would last 30 years.

[00:12:47] And in every scenario, even including you retire the day before the Great Depression

[00:12:52] and your stock portfolio is worth half the next day, you can still go 30 years if you only spent

[00:12:59] 4% of that initial nest egg value per year. And a lot of really smart people, there's a guy

[00:13:05] named Michael Kitzes who writes about this a lot have updated that study and run those numbers

[00:13:10] over and over again after this 2008 financial crisis and the COVID and everything,

[00:13:14] and it holds up. If you think about it, 4% is 125th if you express it as a fraction.

[00:13:20] So even if you didn't invest it in anything, if you're only spending 1 25th of your money,

[00:13:25] it should last 25 years. And the long-term return to the stock market is 10.5%. If it's

[00:13:30] gaining 10.5% per year, you're only spending 4% per year, it definitely makes sense that

[00:13:34] it would go at least an extra five years if not more. And then what they found in the study

[00:13:38] was it does tend to go a lot longer than 30 years. That's great. Now I just will point

[00:13:43] out because we're on the subject that these are two fundamentally different ways of managing

[00:13:51] money, long-term versus short-term accumulation versus cash flow.

[00:13:57] So what we're talking about here is the accumulation of a stock portfolio and then

[00:14:02] the gradual drawdown of those assets over time. And hopefully the account value continues

[00:14:07] to grow at a pace that as you're selling assets to convert them to cash, so you're

[00:14:13] actually selling equities to convert them to cash in order to live on over time,

[00:14:17] that theoretically that account balance draws down as you get older.

[00:14:21] There's a different type of investing that we are sort of bringing to the pilot group. I think

[00:14:29] it's relatively newer to a lot of people that haven't studied finance is the idea of cash

[00:14:34] flows. If you had $6 million sitting in an account, you took 6 million in cash and you

[00:14:41] invested it at let's say 5%. That'd be, what is that, $300,000 a year? And that's just cash

[00:14:49] flow. So you're not having to sell anything and so therefore that 6 million would never

[00:14:54] come down in value. So anyway, I just want to draw those two lines and make sure that for

[00:14:58] the listener group, we're educating on those two different... And there's nothing wrong with

[00:15:03] either one. There's nothing better about either one. It's just two different strategies and

[00:15:07] you can use those two different strategies to fulfill different buckets.

[00:15:11] There's a book that I like a lot. It's called Anti-Fragile and the concept of anti-fragility

[00:15:17] is one that you can gain from disorder, meaning that in your portfolio, if something

[00:15:23] bad happens to the economy, to the whatever, you get stronger versus getting weaker. And I

[00:15:31] think what a lot of people grapple with is their retirement will depend on the timing of

[00:15:36] the stock market. So many pilots are heavy in the stock market or long in the stock market

[00:15:42] and their retirement will be based on, hey, how are things going when I get to 60, 61, 62, 63?

[00:15:51] Because if the market's good, if it's up, I can cash out and I have enough. And if it's bad,

[00:15:55] then I got to work a couple extra years. But the book Anti-Fragile, it's a really good one.

[00:15:59] It's by Nassim Tlaib and he talks about how where catastrophic events actually can make

[00:16:06] your portfolio stronger or your business stronger, things like that. I have a personal

[00:16:09] experience with that when COVID happened. I was put on leave for the airlines and the airlines

[00:16:16] were obviously losing millions of dollars a day and it was terrifying, right? And self-storage

[00:16:22] went up and to the right. Everybody was moving in and things were going good.

[00:16:27] And so I'd like to think that my business was giving me that anti-fragility, even though

[00:16:31] I was an airline pilot, my business was taking off at a time that airlines were in the tanks,

[00:16:36] right? Or in the toilet and it all ended up working out okay because of the government bailout.

[00:16:40] But at the same time, how do you think about that or how are you set up for maybe a big

[00:16:46] down market? Can you speak to your portfolio and how it's structured for anti-fragility?

[00:16:50] Yeah, absolutely. In investing, we talk about risk a lot and a lot of people

[00:16:55] misinterpret risk and then think of volatility, right? The fact that the stock market,

[00:16:59] one day is high and one day is low and the next day is high again. And they think,

[00:17:02] oh I might have to sell a share of stock when it's down and that's risky. No, for me risk

[00:17:06] is more like this anti-fragility concept, right? You really need to think strategically about

[00:17:11] when you need to spend money. So my wife and I don't just have stocks. We bought a

[00:17:16] rental house. It's a long-term rental and really worst case we could pay that off tomorrow

[00:17:21] and go live in it and live cheaply because it's in a great place by a great school and

[00:17:24] we'd be happy there, right? And then we bought a short-term rental and it's making

[00:17:27] great money and it's a totally different kind of rental market. And we've also been

[00:17:31] doing a lot of alternative investing. We've invested in real estate syndications,

[00:17:35] some like kind of small business almost angel investing type stuff. Just starting to dabble

[00:17:40] in that a little bit. It's fun and interesting. And so it's all different kinds of market risk

[00:17:45] and a stock market drop might make rental properties more valuable because people can't

[00:17:49] buy a house and know they need to go get rentals. So I'm trying to just diversify the

[00:17:53] types of things. I think that's so critical because I think as pilots, we get stuffed into

[00:17:57] the stock market. I mean, we have no choice. It's defined contribution and we complain,

[00:18:03] but it's a great match. It's a great double digit match that the company is making,

[00:18:06] which is amazing. But now it's all there, right? So it's like all of your risk is tied

[00:18:12] up in stocks. And that's why I love this show because in our previous episode, we talked

[00:18:17] about angel investing with Nick Hazar. And I love that you brought that up. And Tate has

[00:18:22] talked a lot about his short term rental and that strategy and the tax mitigation that comes

[00:18:28] along with it. And that's why we're doing this is we're trying to help pilots become

[00:18:32] anti-fragile or think about ways to sort of diversify outside of just the normal investing

[00:18:37] realm. And so I just think that's so great. Yeah. One of the nice things about having this

[00:18:42] podcast for pilots, right? It's not just the average Joe engineer, whatever it's pilots,

[00:18:46] airline pilots make a crazy amount of money right now. It's wonderful. We're really blessed,

[00:18:50] right? And you can dump the IRS limit 69,000 dollars a year into your 401k plan and still

[00:18:58] spend lavishly by world standards, right? And still have money left over to invest.

[00:19:04] So why not maximize those tax advantage accounts or your 401k or HSO and all those kinds of

[00:19:09] things and then still invest more on the side. And I love that because you can do the

[00:19:13] stock side, you can do that. And then you can go out and educate yourself and find these

[00:19:17] opportunities for things like real estate syndications that are totally different risk,

[00:19:20] totally different tax rewards, totally different returns and do it all. I think if a person is

[00:19:26] only investing in the 401k, they're not doing enough. Absolutely. 100%. And there's also,

[00:19:31] you're mentioning different risk profiles. What I'm hearing you say is there also

[00:19:36] different time horizons. Yeah. That 401k is a later bucket. And then there should also be

[00:19:42] a medium term bucket, money that is working for you for 10, 15 years down the road. And then

[00:19:47] there should be a now bucket where you might be investing in debt funds or real estate that

[00:19:52] cash flows nicely in the short term that pads your monthly income. So you've got the near

[00:19:56] term, the medium term and the long term that all is snowballing together. Quick, quick question.

[00:20:01] So the FO that's sitting next to you and is, okay, they're saving good. They're not

[00:20:07] spending it on a cub or 180 or something yet. Anyway. Yeah, good choice. Fun airplanes.

[00:20:14] Good choices. Lots of fun. Right. And they man it. They're green slipping, whatever they

[00:20:20] know. They get $69,000 in their 401k. They've got some money in their savings. They bought

[00:20:24] their house. They put a good down payment down there. They're doing good. What that

[00:20:28] first 50,000 or a hundred thousand dollars they have to invest outside of what they're doing.

[00:20:33] How would you, what would be your friendly conversation around that without giving any

[00:20:37] investment advice? First, I want them to have options, right? And I don't want to push them

[00:20:41] with any one thing. And I want to get educated right now. High yield savings accounts are paying

[00:20:45] four to 5%. If nothing else, start by sticking your money on that, right? And just let it sit

[00:20:49] there and it's very liquid. You can get it out in a couple of days and it's no problem.

[00:20:53] Right. I also have a high yield savings account strategy that we use. And so we just

[00:20:59] have a brokerage account at Vanguard and we invest it. We put some money in there,

[00:21:02] invest half of it in the total stock market index fund and half in the total bond market

[00:21:06] index fund. So kind of balance each other out a little bit when market drops happen.

[00:21:10] And that is also very liquid. You can get your money out of there within a couple of days,

[00:21:14] if not a week. Right. And that return is much better than the 4 or 5%. You get in a high

[00:21:18] yield savings account. And then from there go start getting educated. We have invested

[00:21:24] with syndications, you guys and with another friend of mine, it's a company called Vault

[00:21:28] Capital, another just very similar real estate syndication. And it took me and my wife 5 or 10

[00:21:35] years to feel comfortable with those kinds of investments. And it took reading books

[00:21:39] and listening to podcasts and reading blog articles and getting introduced to deals

[00:21:44] and then saying no to that deal in some cases because it was good and in some cases it was

[00:21:49] bad. I just got to thinking about it for a while until we really felt comfortable

[00:21:52] getting into some of this stuff. And I think that's a great way to do it is take some

[00:21:56] time and really educate yourself so you understand what's going on and take your time to find the

[00:22:01] good deals. I think pilots tend to rush into this kind of stuff and you don't need to.

[00:22:06] Take your time, sock the money away and invest when you're ready.

[00:22:08] Absolutely. That's what I always tell people when they say I've got my first 50K,

[00:22:14] what should I do with it? And I'm like, don't give it to me. Don't give it to Ryan,

[00:22:20] meter it out first of all and educate yourself. Take the time to learn and try and diversify

[00:22:27] across multiple different deals. That's what the wonderful thing about limited partner

[00:22:31] investing is. And if you have any inkling of wanting to go out there and buy your own rental

[00:22:37] property, like do that. Roll up your sleeves, get your hands dirty. If you don't, if you

[00:22:41] really don't want to do that, then fine. I've seen that movie. I don't want to do it again.

[00:22:44] But I always encourage people to get out there and get their hands dirty and take some knocks.

[00:22:47] Yeah, that's true. Now I know what I want and what I don't want. What's great is you can sell it.

[00:22:54] If you don't like it, you can sell it. And typically this market's weird or whatever.

[00:22:58] I started buying rentals in 2016. I guess 2009 was my first one. But 2016, I started getting

[00:23:05] serious about it and we did it for a little while and decided we didn't like it. We sold

[00:23:09] it for a profit. So we made good money on it. Yeah, it was great. You mentioned,

[00:23:14] okay, you got the money in the 401k. You've maxed it out. You're doing this Vanguard thing.

[00:23:18] You're getting a higher rate savings. We're going and getting educated now. We're learning.

[00:23:24] We're listening to podcasts. I mean, we've brought on over 60 guests now by the recording

[00:23:28] of this episode or the airing of this episode. They all have podcasts or blogs. You've got a

[00:23:32] book. Okay. We've read books. How much money is going to go in that liquid Vanguard?

[00:23:37] Thinking about asset allocation. How much is going here? Before we start saying,

[00:23:42] okay, I'm educated. I'm ready. What does that look like you think in a portfolio for a new guy

[00:23:46] or gal? Yeah. So for us, it's not a specific number we want in there. It's just all the

[00:23:52] rest. We have what we spend and then we try to be intelligent and frugal about that.

[00:23:57] We maximize our tax advantage savings accounts. And after that, whatever money we have left

[00:24:01] ever goes into that. And it just sits there until we're ready to invest in something.

[00:24:07] And it's been really great. You talked about during COVID, you started doing a lot more

[00:24:12] self storage, right? And that was because you were educated on it and you have probably had

[00:24:16] some capital saved up, right? And so when the opportunities showed up, you were the perfect spot

[00:24:21] to jump on a whole bunch of self storage opportunities. That's happened for us too.

[00:24:25] We had this chunk of money sitting in our Vanguard account ready to go.

[00:24:28] And we spent about a year shopping for houses because the Florida market was crazy, right?

[00:24:32] And when we finally found the right investment property, we're great. Now we can grab a hundred

[00:24:37] grand, dump it on the down payment for this house and then spend a lot more money renovating

[00:24:42] it. And we have the capital available. So we're not sweating it. We're not getting some

[00:24:46] loan shark giving us this hard money loan to do the rehab and work with a gun.

[00:24:50] We could take our time and be comfortable with it.

[00:24:52] Totally. That's great. And it was a great experience, right? So just have that money

[00:24:56] that are ready to go and as soon as you see an opportunity. Another one that's been really

[00:25:00] fun is there's a sunglasses brand that I really like it's aviation sunglasses.

[00:25:04] I've been following them for years. I bought a pair as soon as I found out about them.

[00:25:08] And this one time I just saw the owner mentioned, Hey, I'm taking investment.

[00:25:13] Anybody want to invest? Let me know. So I called him up and talked to him and

[00:25:17] ended up investing a five figure amount with him. And it's cool. It was a little risky,

[00:25:22] but their sales have gone from like under a million dollars to several million dollars a

[00:25:26] year since I invested in it. I've got a ton of shares in this company now. And it's because I

[00:25:31] had this money sitting around and we were comfortable with our investments.

[00:25:33] That's angel investing, right? That's investing in kind of established business.

[00:25:37] What was your, if you don't mind me asking, what was your investment amount? 25 grand. Now

[00:25:41] you're an angel, right? You can tell everybody you're an angel, right? And so we recorded an

[00:25:46] episode on that. We would deepen that if you want to check out episode 55, I believe we

[00:25:50] touched on that. Yep, absolutely. So what Jason is describing here sounds a lot like when we

[00:25:54] had Russell Gray from the real estate guys on, he talks about building a portfolio like a dart

[00:25:59] board. You have your bullseye of cash reserves and then you start building out, right? Your 401k,

[00:26:05] your stock plan, and you start building out, out, out until you're investing

[00:26:09] in your alternatives and your things that cashflow and that sort of thing. So anyway,

[00:26:13] Jason, I know you're a resident expert on market-based cash balance plans, which are

[00:26:20] a very confusing title. They are things that are coming up in airline contracts that a lot

[00:26:25] of people just gloss over, but they're a really big deal. And I want to take a good chunk of

[00:26:31] time here to dive into this topic. I think it's really important that everybody understands

[00:26:36] what they are, how they work, how to opt in or opt out based on your own financial situation.

[00:26:43] So can we jump into that? What is a market-based cash balance plan? We'll just start there.

[00:26:49] Yeah. The basic idea is for a 401k, the IRS sets the limit on how much you can put in there each

[00:26:55] year or for 2024, $69,000 and then you can go $7,500 above that if you're over age 50.

[00:27:03] Once that's maxed out and that's tax advantage money, it's pre-tax money, which is great.

[00:27:07] Lowers your taxable income for airline pilots. That's really important because we make too

[00:27:10] much money. So once you reach that limit, that $69,000 limit, the company's contribution,

[00:27:18] that 17% direct contribution, there's as much things it could have to do. It can go into United,

[00:27:23] it would go into a retirement health account like an HSA. Delta, it would go to cash in your

[00:27:29] pocket, but it was taxable, which is a big tax unit and there's some other treatments at

[00:27:33] other airlines. So the idea is instead of forcing into that, they make this market-based

[00:27:38] cash balance plan and now that company's direct contribution can continue going into

[00:27:42] a tax advantage account as pre-tax money and it's a retirement account and you can

[00:27:47] withdraw it later starting at age 59 and a half. Can I give an example of my own personal situation

[00:27:52] for anybody going, huh? How does this work? So the IRS sets a limit on how much money

[00:28:00] you can make as a W-2 employee and still have your employer contribute to a 401k plan.

[00:28:07] That ends up equating at a 16% contribution rate pretty close to that 69,000 because

[00:28:14] that's both employer and employee. So over the past few years, I have run into this in October.

[00:28:22] So I hit the limit, I hit the mid 300,000s and all of a sudden the IRS says,

[00:28:27] you've made too much money for your employer to continue contributing to your 401k.

[00:28:31] So you have this excess that has to go, it can't go into your 401k, right? But the airline

[00:28:37] is going to take that 15% and they have to put it somewhere because they contractually owe

[00:28:41] it to you. So I want it to spill over into my paycheck because I know how to mitigate my

[00:28:48] adjusted gross income through real estate and other methods. But for people that don't have

[00:28:53] that education and the execution, they might go, whoa, now I'm receiving this extra cash

[00:29:00] and it's being taxed at 37%, 39%. And if I live in a high tax state, it might be taxed

[00:29:06] almost 50%. Right? So this is a way for someone to say, hey, I don't want that money. I want it

[00:29:14] to go into a tax deferred account just like the original 69, whatever thousand went in

[00:29:22] where it was deferred. Can you educate me on that and let me know if I missed anything there?

[00:29:27] Leo Dion Yeah, that's all right on. And you hit on the advantages of that. Part of

[00:29:34] the problem then is the IRS says because it's this fancy plan, it's extra, it's above and beyond

[00:29:42] the 401k limits. If they're going to offer that plan, we have to offer it to everybody at the

[00:29:47] airline, not just offered it to everybody at the airline, but every pilot at the airline

[00:29:50] has to participate in the plan. That's a bummer, right? Because like you said, you don't need

[00:29:55] a market-based cash balance plan because you could do far better in real estate than

[00:29:58] the market-based cash balance plan could ever do. And that's just the way it is. But for

[00:30:03] most pilots at most airlines, you won't have a choice. You'll be locked into it. The Department

[00:30:07] of Labor rules, the Railway Labor Act that governs all our contracts, it says the airlines

[00:30:11] have to maintain status quo, which means if you had a contract that did not include a

[00:30:16] market-based cash balance plan and you worked under that contract, they can't force you into

[00:30:19] it. So that's the loophole that allows current pilots who sign a new contract with

[00:30:24] this new plan, they get a one-time chance to choose not to participate in that plan.

[00:30:28] So this is, we talked about this on an episode way back, but we'll drop it in the show notes.

[00:30:33] We talked about this on a previous episode. This is so important because if you just gloss

[00:30:38] over this and you don't have a plan, you might look back in 10 years and go,

[00:30:42] gosh, I really wish I would have opted out of that. Or I did opt out of it and I wish

[00:30:47] I would have not. So can you tell us what airlines have signed contracts that have this?

[00:30:54] What airlines is it too late? Did this already pass you by?

[00:30:58] Leo Dion Yeah, the new contracts at Delta, American,

[00:31:00] United and Southwest all have it. The Farrell TA at FedEx had it. And I would expect that

[00:31:07] their next TA will also have it. And I'm sure the UPS TA will have something following

[00:31:12] the rest of the industry. There was good news though, if you're in the plan,

[00:31:17] you can use that income cap, the IRS income cap that you mentioned, the mid $300,000

[00:31:21] as a loophole to control how much money goes into your market-based cash balance plan every year.

[00:31:27] So if you want to, you can contribute a bunch of your own money into your 401k every year.

[00:31:33] At my airline, we use Fidelity and I could contribute up to 75% of my paycheck every month

[00:31:38] into my 401k plan. Your individual limit for the year is $23,000. And then we can use the

[00:31:44] backdoor Roth 401k option to continue contributing money in there and do a horse race between the

[00:31:50] company to try to get to that $69,000 year as quick as possible. If you do that, especially

[00:31:54] as a captain at my airline, you could hear $69,000 at the end of February after profit sharing.

[00:32:00] And so for the rest of the year, all that money, the company's direct contribution is

[00:32:05] going to go into the market-based cash balance plan. And I've run the numbers,

[00:32:08] a senior A350 captain at my company could end up with $60,000, $70,000, $80,000 a year

[00:32:13] going into this new plan, which might be advantageous for them if they want to reduce

[00:32:17] their tax below income and they don't have anywhere better to put it. That's great, right?

[00:32:21] But if you're locked into the plan, you have to participate, but you don't want a whole lot of

[00:32:26] money going in there. You could instead set your 401k contributions to low or 0%.

[00:32:32] And then you make the company spend all year putting their 17% into your 401k and take as

[00:32:39] long as possible to hit that IRS income limit. It's $345,000 for 2024. And then

[00:32:45] the last couple of months of the year, you just top up, just make sure you get up to $69,000.

[00:32:51] And then it's just a minimal amount spilling into your market-based cash balance plan.

[00:32:54] So for the new hire pilots who came into these companies after their new contracts,

[00:32:59] don't worry. You still have a lot of control, a shocking amount of control over how much

[00:33:03] goes into your market-based cash balance plan. Just to rephrase. So essentially,

[00:33:08] you could fill it up as fast as possible. 75% of what you make, fill it up by hopefully February,

[00:33:15] if you're making a bunch or picking up greenies or whatever. Good profit sharing.

[00:33:20] And then you could just fill up the huge cash balance plan. Or if you don't want

[00:33:24] the money to go to the cash balance plan, you contribute nothing to your 401k and let the

[00:33:29] company hit the limit basically. And then, wow, I didn't think about that. That's a very

[00:33:35] simple strategy to not, to hold your own cash as much as you possibly can. So if you are like,

[00:33:41] you mentioned like Tate or me and we've got other tax advantage places to put our money,

[00:33:47] then we can do the latter strategy that you mentioned, which don't contribute to it.

[00:33:51] And eventually you're going to top it out and max it off anyway. And then now you don't have

[00:33:54] that money spilling over into other things. That's great. I love it.

[00:33:57] I will say that if you're at Hawaiian, if anybody that is out there listening to this at

[00:34:01] Hawaiian, it works differently. So if you max out first, if you hit the limit,

[00:34:07] then any additional contributions are going to spill over into an HSA.

[00:34:11] And if you let the company max it out, then it spills over into your paycheck. It's a bizarre

[00:34:16] system and we do not have a market-based cash balance plan yet. So for the next contract,

[00:34:21] we're going to be with the, if this merger with Alaska goes through,

[00:34:24] then all bets are off. We may see one of those, but keep in mind,

[00:34:28] if you're on the old contract and you're rolling into the new, there is an opt-out option,

[00:34:33] which I'm certainly going to be executing because just because I don't care that the

[00:34:39] income is going to be taxed at 37%. I want my cash now because I've got really great

[00:34:45] investment. I have access to really great investment vehicles that I want to put it in.

[00:34:48] You're going to get accelerated depreciation on properties anyway, and you'll do far better.

[00:34:53] So if I make an additional, I don't know, 50, 60, $70,000 in the back half of the year,

[00:34:59] I guess it would be around 50 or 60,000 in the back half of the year due to the spillover.

[00:35:04] That's going to tack onto my adjusted gross income. That's going to say instead of making

[00:35:08] 500,000, now I'm going to make 550. And some guys go and gals go,

[00:35:13] I'm going to take a huge tax hit on that last 50K. I'm going, I can offset that.

[00:35:18] So that's why we're here is to educate and so that you can make an intelligent decision.

[00:35:22] Are there any loopholes? I mean, like for an IRA, for example, first time home buyer,

[00:35:27] you can withdraw education purpose. You can withdraw without tax penalty. I think I have

[00:35:32] that right. Maybe that changed or whatever, but I remember doing that for my first home purchase.

[00:35:36] You speak to it and make maybe not loopholes, but sort of relief. I mean,

[00:35:40] some markets that we live in making $300,000 a year is like average, right? I mean,

[00:35:45] expensive cities. So if I'm a new guy just starting out and I finally max up my 401k or whatever,

[00:35:50] and all this extra cash is going into this account that I can't touch, that could damage

[00:35:56] my ability to pay for elder care or buy a house or live. Right? And maybe you have high debt

[00:36:03] or your wife went to medical school, whatever. So you could have a million different things

[00:36:06] going on. Is there any relief? Yes. So there's a few things there. One is that

[00:36:11] in the marketplace cash balance plan, the iOS rules say at age 59 and a half,

[00:36:16] you can start doing rollovers and you can roll over all your money into an IRA, which is awesome

[00:36:22] because you can have a lot of money in there. All of a sudden you show up with a ton of

[00:36:25] money in your IRA. You could put it into a self-directed IRA and invest it all with

[00:36:29] Turbine and Spartan. Right? Right. And you can have a million dollars to deploy immediately.

[00:36:33] And that's only with cash balance every year after that until you retire.

[00:36:37] Okay. So if I'm a Delta United American Southwest, and I'm 59 and a half,

[00:36:42] and for the last year I've been dumping into this cash balance plan, you're saying at 59

[00:36:45] and a half, I can say, Hey, I'm taking this cash balance. I'm rolling in it with Quest

[00:36:49] and I'm investing in your next syndication with it. Wow. Okay. That's cool.

[00:36:53] One thing about these plans is that all custom, there is no cookie cutter. Every each one

[00:36:57] has to be approved by the department of the treasury. So the United contract said,

[00:37:03] Hey, we're going to go to the treasury and present our plan to them. And as part of it,

[00:37:08] they're asking for their policy have the option of on an annual basis elect for their extra money

[00:37:13] to either go into this market based cash balance plan or into that RHA, that retirement

[00:37:18] health account like an HSA. And they're going to choose from year to year. Now there's no way

[00:37:22] of knowing if that'll get approved or not, but it could give you some nice options there.

[00:37:27] And it gives me hope because I would like to hope that we might get in our next contract,

[00:37:32] be able to add something you want to give a little bit of optionality there. That's just me

[00:37:36] hoping we're looking out at the future, but I really do hope those United pods do that for us.

[00:37:40] That'd be great. Show some leadership there. That'd be awesome.

[00:37:42] If you're at one of these airlines and you want to find out more about it,

[00:37:46] you've decided one way or another, and you're listening to this and you're thinking about it

[00:37:49] and you're like, Hey, I might want to opt out or I want to make sure that I'm in.

[00:37:53] I would recommend, I think just reach out to your retirement committee,

[00:37:58] your union, right? Yes, absolutely. They have tons of info. They love talking about it and

[00:38:02] they're all pretty proud of it because it is a win for their pilots. It is a good opportunity

[00:38:06] for their pilots that they earned. And so they want to talk about it. And let's also say here,

[00:38:11] it's also extremely important for any of this stuff to talk to a professional financial advisor.

[00:38:17] And you've had some great ones. You've had Tim Pope and Jesse Reed on the show. I know

[00:38:20] both of them. I would go to either of those guys in a heartbeat and I could recommend others.

[00:38:24] I'm sure you can too. Go talk to somebody else and take the information you're hearing

[00:38:29] this episode and the other episodes here and have the talk about market-based cash balance.

[00:38:33] Find what should I do? Here's my goals. What are my options?

[00:38:36] Yeah. And it really comes down to, do I want more money now taxable at the end of each

[00:38:41] year that's spilling over into my paycheck because I have ways to mitigate my adjustable

[00:38:46] gross and adjusted gross income. And I have investment vehicles that I want to participate

[00:38:51] in now that are not in the market or I don't want to take that tax hit. Don't give me

[00:38:56] that money. Put it in this cash balance market plan. So hopefully that gives people a good

[00:39:02] holistic view of what this is so that they can understand it and go talk to your union rep.

[00:39:10] We're just having like cockpit conversations with awesome expertise like Jason. This is

[00:39:15] just to get your brain running and thinking. And so there's never a one size fits all

[00:39:21] strategy for anybody. So we have no idea if you're listening to the show and you're like,

[00:39:26] I heard him say that I should go do this. And it's, we have no idea what you're doing

[00:39:29] on your days off or what you're into or your financial situation or how many kids you have

[00:39:34] or anything else. Everything is different for everybody. It's just, we want to get these

[00:39:38] ideas and concepts out there so that you can start having good conversations,

[00:39:41] better conversations about it, more informed conversation.

[00:39:44] Yeah. Setting you up for great conversations with your financial advisor.

[00:39:47] Yes. Exactly. Yeah. Because now hopefully by the end of listening to all 60 episodes of

[00:39:52] this show, you can speak more intelligently and have more productive conversations with those.

[00:39:58] Jason, what's new on the horizon that we need to get in our next contracts as it pertains to

[00:40:05] investing or what are we not thinking about that rests on your mind that gets you fired up

[00:40:11] about, Hey, I don't know why we don't have this in our contracts. Other industries do this

[00:40:15] or things like that. Sure. I worry about our pay rates being so high that the rest of the

[00:40:22] industry, the rest of America looks at airline pilots and that's unreasonable. Right? So I

[00:40:27] don't want my next contractor chase super high pay rates. I'll take whatever I can get, but

[00:40:32] that's not my number one priority. Right? My company's most recent contract

[00:40:37] had a lot of great soft pay provisions. No news outlet that just quotes sound bites

[00:40:43] and summarizes with chat as GPT is ever going to catch on to how much these are worth.

[00:40:48] But it's a ton of money. It's really great. So I like the soft pay provisions. I think they're

[00:40:52] really important. Another one that my union just added and I had no idea how grow to deal it was

[00:40:58] until recently, they did a global variable universal life insurance policy that replaced

[00:41:04] an old term life insurance policy for us. And it's cool. I'm not a huge fan of whole life

[00:41:09] insurance. I think it's too much, too complicated, too many wickets to make a lot of money for

[00:41:16] other people. And there are some advantages for you, but me, but this new policy is really

[00:41:20] cool because all of my company's insurance premiums that they pay into this plan on my behalf,

[00:41:27] the plan has an investing side to it, a brokerage account, and I can invest money in

[00:41:30] this brokerage account and the company's premium payments can cancel out my investment gains

[00:41:38] within this brokerage account over the course of my career. They're going to end up paying

[00:41:41] about a quarter of a million dollars in insurance premiums. And so I could get a quarter million

[00:41:47] dollars in investment gains and never pay a dime of tax on it. So really cool opportunities like

[00:41:54] that are things that we can get into our contract. When I flew out of Wisconsin,

[00:42:00] and quite frankly, there was soft language in there that just blew the doors off some of the

[00:42:07] major airline contract stuff, right? Like trips touching and extra vacation and just line bidding

[00:42:14] provisions and ways to pick up time. And I mean, it was incredible. I don't know what it is today,

[00:42:17] but, and then when I went to the majors, it's all the pay rates are way better. And then I'm

[00:42:21] like, wait, how does this bidding work? I mean, really, this is a major or a bigger carrier.

[00:42:29] And so I can't, I agree with you. I think the soft stuff is what increases your quality

[00:42:33] of life and it hits your paycheck ultimately. So. Absolutely. Yeah. And I will also echo that by

[00:42:42] saying for a lot of the new pilots that are listening to this, that are in their first major

[00:42:46] in their first contract cycle, talk to some pilots that were around in the nineties or in

[00:42:52] the eighties. And boy, I mean, those contracts were juicy. I mean, I used to,

[00:42:56] I grew up with my uncle who was flat American at the time who had bid two six day trips

[00:43:02] right back to back with one another. And he dropped his recurrent training for the year

[00:43:06] right on top of it. And guess what? Bounces both six day trips. So he gets paid for a 12 hour

[00:43:13] trip on the triple seven and he goes to training for three days instead. Amazing.

[00:43:16] That's the kind of stuff that, like you said, CNN is never going to pick up on that,

[00:43:21] you know, but when pay rates are coming climbing into the mid fours,

[00:43:24] it starts getting people's attention. Yeah. And the one other contract provision for me,

[00:43:29] the most important part of any pilot contract is the scope clause. Yes. My airline CEO is a

[00:43:37] brilliant businessman. He makes us a ton of money. And part of the way he's done that is with these

[00:43:42] code share joint venture agreements with other airlines. And it's great because it makes a

[00:43:47] bunch of money and it's wonderful, but those are jobs that American pilots could be doing

[00:43:54] on seven 87s and three eighties and things that we don't even have. Right. And so you

[00:43:58] need to watch out for your scope clause and make sure you negotiate an iron cloud scope clause

[00:44:04] that takes care of you and protects your jobs. And our most recent contract was great. It really

[00:44:08] locked that down in a really masterful way, but I've seen other contracts at other airlines

[00:44:13] not even addressing it. And some airlines really trying to give up a lot of scope,

[00:44:16] and it's really dangerous. You can go talk to pilots who worked for the former brand F and

[00:44:22] Pan Am and all those places, or go talk to a pilot used to fly for DHL. It used to be a

[00:44:27] proud company that US pilots are proud to work for. And now it's just some random ACMI owned

[00:44:32] by some Europe agglomerate and it's a completely different place because they gave up the film.

[00:44:35] So really important to protect that. Such good advice. Jason, can you tell us a

[00:44:40] little bit about the book that you wrote and then any other resources that specific

[00:44:47] resources that you'd recommend, whether podcasts, books, et cetera? Yeah. So I wrote a book called

[00:44:53] Pilot Math Treasure Bath. It's a goofy name to make sure we don't take ourselves too seriously.

[00:44:59] I love that. But what it does is I went and talked about,

[00:45:02] you have to start with why. So there's a book by Simon Sinek called Start With Why.

[00:45:06] If you haven't read it, you must. It is fantastic. And what's your goal in life? What

[00:45:10] are you working toward? Because I know so many pilots who fly 100 hours a month, they're

[00:45:13] making all this money. And why? I don't know. I'm just working. That's horrible, right? So

[00:45:17] figure out a why, figure out your goals. Then I went to the Bureau of Labor Statistics

[00:45:22] and I got the data for how much Americans spend every year. They publish this data every year.

[00:45:28] And I adjusted for reality and came up with a number. The one I originally wrote, it was about

[00:45:31] $57,000 a year. I'm updating for a second edition now and it's coming out closer to $69,000 a

[00:45:37] year. But if you spend $69,000 a year, you spend as much as the average American. And that's

[00:45:41] not eating beans and rice. That's buying new cars and going to Starbucks and eating fast

[00:45:45] food, whatever the average American does. So then we look at airline pilot pay and how much

[00:45:51] we actually make. And it's astounding, right? And I run actual numbers and I've got some real

[00:45:54] great spreadsheets that give hard and fast numbers. And I publish them for free. They're

[00:45:58] on my website so you can download them and adjust them to your situation. And so then

[00:46:02] we look at if you spend that $69,000 a year and you maximize all your tax returns accounts

[00:46:08] and then you invest the rest, we can project out and show how much money you're going to

[00:46:10] have and what the passive income from that can look like and how quickly it can reach that

[00:46:15] point of financial independence. And staggering. Once you see it, you can't unseal it and it's

[00:46:20] wonderful. And the book's available on Amazon. So good. Yeah. I'll also put a link in the

[00:46:24] show notes. Amazon? Yep. Yep. And at pilotmathtreasurebath.com, we could find the calculator.

[00:46:31] Yep. And working on a second edition, it'll be a much better edition. The first one I

[00:46:35] went with perfect and then we're done. So it got done. It's not perfect. That's great.

[00:46:41] The second one will be a little bit better. That's great. Any other resource that you

[00:46:45] specifically point to? And then of course, we want to give listeners the chance to know

[00:46:49] how they can connect with you. Yeah. So on my website for the book, I did a pilotmathtreasurebath.com

[00:46:55] slash Bible and it's the Bible. So the other books, the other resources, right? That form

[00:46:59] the conglomerate of where I came from. Some of the books I have on there start with

[00:47:02] Wired with Simon Sinek, Wish Dad Poor Dad. There's a book called The Millionaire Next Door

[00:47:06] that's just fascinating. Just if you can get that mindset into your head, you will be a

[00:47:12] rich person. Your money or your life we mentioned, there's one called The Simple Path

[00:47:16] to Wealth that really goes into detail in that 4% rule and just making things simple and easy.

[00:47:21] The 7 Habits of Highly Effective People, The 4 Hour Workbook by Tim Ferriss,

[00:47:25] all of those kind of conglomerate into some of the ideas I'm pushing here.

[00:47:29] There's some really great podcasts and blogs out there. I came across all these ideas because

[00:47:33] of a blog called Mr. Money Mustache, another don't take yourself too seriously personal finance

[00:47:38] kind of blog. And if you can get past the bluster that's intentional and joking, it's

[00:47:44] really great money mindset. There's a podcaster called The Mad Fientist who ran through some of

[00:47:49] the principles of financial independence over about 40 podcast episodes, just really great stuff.

[00:47:55] Another one, especially if you're interested in real estate and you're listening to this podcast,

[00:47:58] you might have some interest in real estate. Bigger Pockets is a fantastic resource.

[00:48:02] Absolutely. They have so many books and articles and podcasts.

[00:48:06] Jason, what's one thing about finance you've learned in the last six months that you never

[00:48:10] knew before that you can share with our listeners? In the last six months,

[00:48:14] so you're always learning. Hint, hint, foot stop, foot stop. Yeah.

[00:48:18] Imagine that. What was your biggest takeaway? Man, I never, or maybe it was like something that

[00:48:23] you thought was the way it was, but really you have a different perspective on it now.

[00:48:28] Relatively recently when the banker-based cash balance plan came out, I was strongly against

[00:48:32] it because one of the other caveats we haven't mentioned is the individual pilot does not get

[00:48:37] to control what it's invested in. The company and the union have to hire a third

[00:48:41] party money manager that chooses. And traditionally they've invested in like T-bills at two and a

[00:48:46] half percent, which is terrible. And I was pissed and I did not want that. Just learning

[00:48:51] about the market-based cash balance plan, learning about what it could be invested in

[00:48:54] and how the IRS rules work. And that loophole we talked about, you have the two strategies,

[00:48:58] you can front load it or not load it. Really made me a little bit more comfortable about

[00:49:03] it. And then I also ran the numbers. I've done myself a spreadsheet and I've got it on

[00:49:06] my website. You can download your own copy. I ran the numbers and even if it's the money

[00:49:12] manager investing in 3% T-bills and you can't control it, you can't get your money

[00:49:17] till it's 15 and a half, it's still advantageous depending on your timeframe. And so it really

[00:49:23] is valuable to run the numbers and set aside your own personal feelings and emotions

[00:49:28] and inclusions for a minute. Yeah, do the numbers and the rest make sense, right?

[00:49:31] If the math makes sense, then do it. Right. So Jason, thank you so much for coming out.

[00:49:36] What's the best way we get in touch with you?

[00:49:37] PilotMathTreasureBallot.com is good. I'm on Facebook or LinkedIn.

[00:49:40] Your LinkedIn content is excellent. So if anybody's not following Jason on LinkedIn,

[00:49:45] do that because he's always blogging and writing great articles and things like that.

[00:49:48] Definitely.

[00:49:49] Thanks so much for coming on and sharing your knowledge with our listeners. This was

[00:49:53] awesome to have another pilot on here talking shop.

[00:49:55] Thanks. It's a pleasure. I'm a big fan of what you guys are doing. I love the education.

[00:49:58] I love the variety of information you're getting out there. And if people will just

[00:50:04] educate themselves on this and put in a little bit of effort.

[00:50:06] Thanks for following the show and go to our Facebook page, Passive Income Pilots,

[00:50:11] or you can go ask us a question. Go to ask at passiveincomepilots.com

[00:50:15] if you have a question and we will answer it on the show.

[00:50:18] Thanks everybody. Catch you on the next one.