#81 - The Power of AI and Passive Income Strategies for Pilots with Jim Higgins

[00:00:00] Hey everybody, Ryan Gibson from Passive Income Pilots. We're excited to announce our very first in-person meetup. So come see me and Tait at Atlanta, Georgia on Veterans Day, November 11th from 5 to 8 p.m. And we're going to be meeting at the Line Creek Brewing in Peachtree City, Georgia. Come unwind, relax, meet fellow aviators that invest and fly and also meet myself and Tait. We look forward to seeing you there. If you'd like to register, check out the link in the show notes to register for the event.

[00:00:29] The space is limited. So please go in early and register. Thanks. And let's get back to the show.

[00:00:36] Hello everyone. Welcome back to another week of Passive Income Pilots. Tait Duryea here with Ryan Gibson. What's up, dude?

[00:00:43] What's up?

[00:00:44] How you doing?

[00:00:45] I'm great. I love having great guests come on and I love guests that are multifaceted. And I think Jim Higgins, the guy we're about to bring on, is the most multifaceted person we've had on the show.

[00:00:57] And there's something for everybody, which is really cool. So I always get really jazzed when we bring somebody on who's going to be applicable to pretty much every single corner of our listenership.

[00:01:06] Definitely. Yeah, we covered a wide range of topics. Stay through the whole episode. It was really good. At the end, we talk about creating apps and how easy it is now with AI and some of the tech that will...

[00:01:17] You don't have to code anymore. And you can just create a business that makes recurring revenue. It's amazing.

[00:01:23] Yeah, a lot of ground covered here. There's some specific websites that we go onto during the show that, hey, this is where you go build the app.

[00:01:31] You have to spend hundreds of thousands of dollars in the past and hire all these coders and all these things. But if you have a great idea, we kind of go into how we do that.

[00:01:38] But we also get into some leadership conversations and some mind-blowing thoughts on that. And so I really think about that.

[00:01:45] But here's a little bit about Jim. Right now, he's a professor at University of North Dakota up in Grand Forks.

[00:01:52] And he is a co-founder and COO of a company called Thread that uses a lot of data and drones and analytics to do utility line inspections.

[00:02:03] But he used to be an MEC chairman at what was American Eagle, now Envoy Airlines. And then he was on the negotiating committee for that. So he was head of negotiating or negotiating chair for Envoy.

[00:02:15] So during the 9-11 era where things were really bad. And so there's a lot of lessons in leadership there. And then he was an airline pilot and transitioned into this kind of tech role and co-founded a company.

[00:02:27] He has employees across, I believe he said, over 20 states and just an amazing guest. I mean, a pilot that has kind of transformed into a lot of different areas and gives back to his students.

[00:02:39] I think what was really cool, we talked about how he imparts financial wisdom on new aspiring airline pilots.

[00:02:47] So if you're a father or mother listening to this and you want to impart some financial wisdom on your kids or yourself, for that matter, he goes into some of the things, some of the techniques that he teaches the kids and some of the things that he does for them to get them ready for the financial world.

[00:03:02] And it was really refreshing to hear that they're doing that at university.

[00:03:07] So very cool. Well, without further ado, let's get straight to the show.

[00:03:15] Welcome to Passive Income Pilots, where pilots upgrade their money.

[00:03:19] This is the definitive source for personal finance and investment tactics for aviators.

[00:03:25] We interview world-renowned experts and share these lessons with the flying community.

[00:03:30] So if you're ready for practical knowledge and insights, let's roll.

[00:03:34] Jim, thank you so much for coming on and joining us.

[00:03:37] Happy to be here. Thank you for having me.

[00:03:39] Yeah. Can you give us a little bit about your background from your perspective?

[00:03:43] Absolutely. I come from a family of pilots.

[00:03:45] My dad is a retired airline pilot.

[00:03:47] My wife is a current active pilot at a legacy carrier.

[00:03:50] I used to fly in the airlines years ago, just post 9-11, and I became the MEC chair at American Eagle Airlines, now known as Envoy, represented 2,900 pilots.

[00:04:00] Since then, I transitioned to academia.

[00:04:02] So I serve as a professor of aviation at the University of North Dakota, a large aviation program in the Midwest.

[00:04:08] I'm sure many people that are listening are familiar with.

[00:04:11] And in addition, in the last five years, I've transitioned into the industry a lot more and co-founded a tech startup that's growing and thriving.

[00:04:19] And happy to talk about any and all of those.

[00:04:21] We're excited to jump into all of those.

[00:04:24] You know, I think it's super interesting, your background, you know, you kind of glazed over a lot of stuff there, right?

[00:04:30] I think what's interesting, too, is you did some negotiating positions, you know, right around the 9-11 time.

[00:04:35] And I think that's super interesting.

[00:04:37] But, you know, I just can't wait to talk about the things that you're doing for your students, teaching them about financial education.

[00:04:44] And I can't wait to get into that.

[00:04:46] And then also, selfishly, I can't wait to get into how accessible starting tech is now and how accessible it is to create apps and things like that.

[00:04:57] So what a background.

[00:04:59] I'm just kind of dumbfounded on how much experience you've had.

[00:05:03] And, you know, I kind of relate to that a little bit.

[00:05:05] I mean, not as cool as a tech startup.

[00:05:08] But, you know, just taking a moment to think about, like, when you get into aviation, all these doors open up and there's so many things you can do.

[00:05:16] I mean, think about it.

[00:05:17] You served in a leadership role at the MEC.

[00:05:19] You served as a negotiating chair.

[00:05:22] You served as a university president teaching, you know, financial education strategies and doing a tech startup.

[00:05:30] And so I just love to see, I love to bring folks on and interview folks that have, like, kind of done a lot of different things and made a lot out of aviation.

[00:05:38] So congratulations on your career.

[00:05:39] That's all I want to say.

[00:05:40] I think it's really, really just going to be a fun conversation.

[00:05:42] Oh, I appreciate that, Ryan.

[00:05:43] Yeah, there's been a lot of bumps along the road as there is for all of us.

[00:05:46] But, you know, sometimes you learn the correct path by stubbing your toe a few times.

[00:05:51] Sometimes you get lucky and you just have to be prepared for both of those potential outcomes.

[00:05:55] Can we start with your time in the MEC?

[00:05:58] And, you know, you were negotiating chairman for American Eagle during the 9-11 time.

[00:06:04] We chatted offline about the difference between divine benefit, divine contribution.

[00:06:08] You want to break down those concepts for people that are maybe newer to the industry and don't, you know, remember the pension days, the differences, the pros and cons between the two and what we have today as it relates to a historical context?

[00:06:21] Absolutely.

[00:06:22] You know, the traditional pension, which is where the company takes on all of the risk.

[00:06:26] It's what we call a defined benefit.

[00:06:29] It's where a pilot would be promised at the end of their career.

[00:06:33] They work so much or some kind of formulaic activity based usually on how much they've made.

[00:06:38] You know, they'll get this percent of that for the rest of their lives.

[00:06:41] And sometimes there's even a spousal survival benefit where even 10 years after, you know, like UPS still has that, for instance.

[00:06:47] So there's some really good deals out there.

[00:06:49] However, after 9-11, a lot of those went away.

[00:06:53] And there was a lot of interesting, sadly interesting things that happened where the Bankruptcy Act conflicted with ERISA, the Retirement Act, like what was going to win.

[00:07:02] And it turned out that the Bankruptcy Act kind of prevailed.

[00:07:05] And a lot of these pension programs that were supposed to be guaranteed and supposed to be there for pilots went away.

[00:07:10] And there was a group of pilots.

[00:07:12] And I know some of them are probably listening now.

[00:07:14] And if my heart goes out to them, they maybe were, this is back when the retirement age was still 60.

[00:07:18] They maybe were at 55, 57 years old, thinking that most of their income coming in was disposable.

[00:07:24] And then boom, overnight, the pension that was waiting for them was gone.

[00:07:29] In my opinion, that's the reason why ALPA lessened their stance and decided to go to age 65.

[00:07:34] Because at the time, there was a five-year gap between Social Security and this age 60.

[00:07:39] Now it's, you know, up to 67.

[00:07:41] But that being said, people were literally going to go from making $250,000 a year to zero for five years.

[00:07:49] And so the lesson that we bring to our students at the University of North Dakota is always remember that.

[00:07:56] Because no matter what is promised to you, the only thing that for sure, well, I mean, as for sure as you can get,

[00:08:02] that's going to be there for you are things that you save for yourself.

[00:08:06] And if a pension is there, if Social Security is there for you, that's great.

[00:08:10] That's extra income for you and for your beneficiaries.

[00:08:13] That's fantastic.

[00:08:14] But if you don't rely on that, if you rely only on your own investing, you're going to end up much better.

[00:08:20] So that's what happened.

[00:08:21] And then the defined contribution, to go back to your original question, sorry to make this so long-winded,

[00:08:25] that's more of like your 401k type thing where you take the risk.

[00:08:29] You decide, company's going to give me five, ten different ways to invest.

[00:08:33] You know, sometimes a little more, sometimes a little less.

[00:08:35] But you'll go in and you'll invest that.

[00:08:36] The benefit of a 401k, especially on a regional airline, is that it's portable.

[00:08:40] So the money you save there, including any contribution from the company, once you're vested,

[00:08:45] it will transfer with you to wherever or it can just roll into an IRA or whatever the case may be.

[00:08:50] And so that was pretty beneficial, especially to the younger pilots or the pilots that had aspired to go to a major legacy carrier.

[00:08:57] However, there now is a large group of people that want to retire at what we call a regional airline, which is fine.

[00:09:04] So they have to be able to make that 401k, that defined contribution work.

[00:09:08] Sorry if I got too far afield on that, but hopefully that kind of encapsulates your question.

[00:09:13] No, this is great.

[00:09:14] I'm a huge proponent of defined contribution because I want to be vested.

[00:09:19] I want that to be my money.

[00:09:21] You know, you fly with a lot of, you know, older captains who unfortunately have had the rug pulled out of them

[00:09:27] and they lament the disappearance of the pension.

[00:09:31] But, you know, a promise to get paid later if the company is still around doesn't sound as good to me.

[00:09:36] So I'm a huge proponent of the new system.

[00:09:40] Absolutely.

[00:09:40] And in a bankruptcy nowadays, it used to be that, you know, the company would have to fund,

[00:09:45] you know, per the Pension Guarantee Corporation.

[00:09:47] They'd have to meet certain milestones.

[00:09:49] Well, of course, when the company has no money to do that, they go to bankruptcy court.

[00:09:53] And then the bankruptcy judge typically says, yeah, you don't have to fund your pension anymore.

[00:09:56] Now, there is a Pension Guarantee Fund that the federal government puts in there,

[00:09:59] but you're looking at a dollar for every 10.

[00:10:02] So if you had, you know, a million dollars just to keep the math simple in your pension,

[00:10:08] you know, you maybe are going to get $100,000 of that funded through this Pension Guarantee.

[00:10:12] So to your point, the defined contribution is the way to go.

[00:10:16] You know, it's not as risky as a lot of people think as long as you, you know,

[00:10:19] and most 401ks control what you invest in.

[00:10:22] You know, you're not going to be able to put it all in gold.

[00:10:24] I'm not saying there's anything wrong with putting it all in gold,

[00:10:26] but you're not going to be able to put it all in gold.

[00:10:27] They believe in diversification.

[00:10:28] They believe in age appropriate, you know, age to retirement appropriate type of funds.

[00:10:34] And so you really can't get hurt, in my opinion, too bad by, you know, fully funding your 401k.

[00:10:39] The biggest mistake I see with pilots is they do not maximize

[00:10:44] the matching contribution from their employer.

[00:10:46] And I mean, I know you guys have probably talked about that many times.

[00:10:48] It's such a critical mistake that you can make early on because you need that extra 50 bucks,

[00:10:53] that extra 100 bucks, you know.

[00:10:54] But if people can learn just to do that and be disciplined, it makes such a big difference.

[00:10:59] It's free money.

[00:11:00] It's literally free money.

[00:11:01] Well, and I want to get into time value of money with you in a minute.

[00:11:05] But, you know, you said something here that I want to unpack, which is that 401ks are portable.

[00:11:09] And we've talked about this concept on the show before,

[00:11:11] is that if you're a regional pilot and you're moving to a major,

[00:11:15] that 401k from the old regional is portable to the new airline.

[00:11:20] However, you can also, at that moment, you should know that you can also take that and

[00:11:25] roll it into a self-directed IRA and invest in anything under the sun with that.

[00:11:30] So something to consider if you're in the in-doc at Delta or United, you just made it.

[00:11:34] And, you know, the retirement committee comes in and says, okay, you can roll your funds into

[00:11:40] Empower with United now.

[00:11:42] They're probably not going to tell you that you have a second option, which is take that

[00:11:45] elsewhere and you can invest in real estate, in any other alternatives that you want,

[00:11:50] which could be, could be not financial advice, but a good strategy for those who are interested

[00:11:56] in diversifying outside of the public markets.

[00:11:58] I'm a big believer in self-directed IRAs.

[00:12:01] I didn't know we were going to go that direction.

[00:12:02] I do have a self-directed IRA.

[00:12:05] You know, unfortunately I wasn't able to invest in my own business because I was classified

[00:12:08] as an interested party.

[00:12:09] You know, that's a whole nother, whole nother thing.

[00:12:11] And you do have to probably get some legal opinions to, to navigate that field a little

[00:12:14] bit.

[00:12:15] But, you know, if you have a good trustee that's used to that, that are quick acting, you

[00:12:18] know, there's some really great opportunities.

[00:12:20] I certainly agree with everything you're saying.

[00:12:22] And you can absolutely kill the S&P average, you know, over time, no, no problem about it.

[00:12:29] But, but I would, I would put one caveat on it.

[00:12:31] It may not be for everybody.

[00:12:32] Right.

[00:12:33] I mean, there's nothing wrong with just rolling it into an IRA and, and, and, you know, yeah,

[00:12:36] you lose the fees, you lose some of the other stuff, but if you don't know what you're doing,

[00:12:40] you know, maybe that's a little bit better, but yeah, that's great.

[00:12:43] Yeah.

[00:12:44] And I, and I was going to say too, some custodians are set up for real estate.

[00:12:49] So I think this notion of self-directing, I know we're going long on self-directed, but

[00:12:53] I did, I do think it's important to always bubble this up to the top, which is everybody

[00:12:57] has a self-directed IRA already, right?

[00:12:59] Because you can, you could effectively select whatever you want to invest in.

[00:13:03] You can do whatever you want.

[00:13:04] Right.

[00:13:04] However, what you can't do is certain investments that the custodian prohibits you from doing.

[00:13:09] So Fidelity is not going to let you invest in a Spartan or a turbine capital syndication,

[00:13:16] right?

[00:13:16] Like you're, you're not going to just be able to go do that because they're not going to

[00:13:19] be able to feed that or structure that.

[00:13:20] But there are custodians out there like IRA club, Inspira, BTC, et cetera, that, that

[00:13:27] allow you to invest in real estate.

[00:13:30] But when you put money over there, they might not have a platform that allows you to invest

[00:13:34] in stock bonds and mutual funds.

[00:13:37] So it's, you're always self-directing with your custodian.

[00:13:40] You're always picking where you're investing, but some custodians are going to let you do

[00:13:43] certain activities and some aren't.

[00:13:45] So if you're sitting here thinking, okay, what does all this mean?

[00:13:48] Not giving tax legal investment advice, but I would say the best thing, if you're sitting

[00:13:52] at a regional and you're about to go to a major and you're at your major and they're

[00:13:54] like, what do you want to do?

[00:13:55] Do you want to roll in?

[00:13:56] Do you want to, I would say don't roll in, like go to whatever brokerage.

[00:14:02] At least wait, get educated because once you roll it in, you can't roll it back out.

[00:14:07] True.

[00:14:08] Yeah.

[00:14:08] So keep your optionality.

[00:14:10] That's like eliminating all your alternate airports.

[00:14:12] Like why, why do that?

[00:14:14] Well, keep your, keep your options open and then get educated.

[00:14:17] And here's the thing guys, like the, the money that sits in your old 401k will just continue

[00:14:22] to make whatever it was making.

[00:14:23] It's not like you're pulling it out.

[00:14:25] There's no tax penalty or anything like that.

[00:14:27] It's just sitting there.

[00:14:28] And when you're ready to make a decision, then move it and your new 401k, you can max

[00:14:32] it out and contribute to it and it can do its thing as well.

[00:14:34] And combining them will make no difference mathematically.

[00:14:36] So just don't do anything.

[00:14:38] Let's wait.

[00:14:39] And then when you're good and ready, then you can start.

[00:14:41] I would personally recommend, and my, what I've done is put it into a custodian.

[00:14:46] Like I went to Morgan Stanley image originally, I'm not saying go to Morgan Stanley, but like

[00:14:50] get it out of the, get it out of the ecosystem of the airline.

[00:14:52] So you can truly control where it goes and you can have all the options available to you.

[00:14:56] Not just what the airline plan options give you.

[00:14:59] So we're way off in the weeds.

[00:15:01] Jim, can I just ask you, you know, years of a negotiating committee chairman, you know,

[00:15:06] back in the nine 11 era, obviously pensions are not coming back.

[00:15:09] That's not something that we should probably even fight for at this point as a, as a pilot

[00:15:14] group.

[00:15:14] But what do you think were the biggest losses that, and I don't want to get into the politics

[00:15:20] of, of, of unions and airlines, but what were some financial things that were, or stuff

[00:15:25] that can come back, or we should be thinking about and putting on the docket that aren't

[00:15:29] back at, and widespread at the airlines today?

[00:15:32] Great question.

[00:15:32] You know, generally speaking, the philosophy from a union, now this is just coming from

[00:15:36] a union perspective, just from a line pilot perspective, not a company perspective.

[00:15:40] But when times are tough, when you're in concessionary times, just more globally, economically,

[00:15:45] you generally go for provisions in the contract that are more longer term, like job security,

[00:15:51] more 401k contributions at some point in the future, you know, furlough protection, things,

[00:15:55] things like that.

[00:15:56] When times are non-concessionary, when you're in a boom time, or when there's a lot of hiring

[00:16:00] going on, generally speaking, negotiators, but I'm an alpha trained negotiator, right?

[00:16:04] So this is what they teach you in alpha school.

[00:16:06] That's generally, you listen to what your pilots want, you go through surveys, you go through

[00:16:13] the money, the immediate cash out, because you know that there's going to be cycles where

[00:16:18] there's concessionary times again in the future, you might have to give some of that back.

[00:16:21] So you want to collect that as much as possible, just a kind of a wild ride cycle.

[00:16:25] So, but the things that I think we can bolster are, we can do more things with retirement.

[00:16:30] If you look at like FedEx, if you look at United, if you look at Delta and their latest contracts,

[00:16:35] they are doing some interesting things with their health savings accounts.

[00:16:38] And also looking at some hybrid, you know, I'm not saying they're getting around,

[00:16:43] IRS, you know, maximum contributions.

[00:16:46] But I'm telling you, pilots are able to now invest more than they were before because of

[00:16:51] some of these new hybrid programs being created.

[00:16:53] So I think more can be done there at other carriers.

[00:16:56] I don't know.

[00:16:58] And my biggest complaint about line pilots just in general is they don't always pay attention

[00:17:04] to this long-term planning.

[00:17:05] They're very good at getting that short-term paycheck, maybe picking up an open trip that

[00:17:11] gets some time and a half or two times, maybe doing a turn on Christmas that they pay them

[00:17:15] $5,000.

[00:17:16] But they're not very good at saying, what's going to happen when I retire?

[00:17:19] And you know, how am I going to transition out?

[00:17:22] And so if they would just pay a little more attention to that, and if they would have

[00:17:25] their union negotiators, put a little more emphasis to your question, Ryan, on getting

[00:17:30] some of these things bolstered up for later on, I think that things will be better.

[00:17:34] So get new programs, maximize.

[00:17:35] You know, if you don't have a health savings account that can go on top of your 401k or

[00:17:41] whatever you have, you know, push your union to push for something like that.

[00:17:44] You know, these are the things I think you could do.

[00:17:46] That's great.

[00:17:47] Yeah, it makes sense.

[00:17:48] What is the gold standard at HSAs at the airlines in your opinion right now?

[00:17:51] I don't know how familiar you are with each contract and all that, but what would be that

[00:17:56] example of what to fight for?

[00:17:58] Yeah.

[00:17:59] You know, one of the biggest problems, so not all HSAs are the same.

[00:18:03] I've learned that, you know, there are rules and some airlines are learning the better.

[00:18:07] You know, ALPA does pattern bargaining, right?

[00:18:09] So I'm not sure about this, but I'm pretty sure FedEx might've been the first to do that.

[00:18:14] And then, you know, they're an ALPA carrier.

[00:18:15] So then I think Delta came along, then United Pilot Group came along and kind of patterned

[00:18:19] off of that.

[00:18:21] The biggest rub right now with the health savings accounts, as far as I understand, and

[00:18:24] I mean, there's definitely a lot of people out there that know a lot more about this than

[00:18:27] I do, but is what happens after retirement and what happens if you don't use things

[00:18:32] before retirement?

[00:18:33] There are better rules of some carriers, like on what that can be used for.

[00:18:38] Obviously you can use it for health up until retirement, and then it should convert into

[00:18:42] a tax deferred account for you after retirement, which is, you know, kind of a way, but there's

[00:18:47] that, you know, like what are the rules with that?

[00:18:50] And I think if you look at some of the early HSAs at the airlines, there's a little more

[00:18:54] restrictive.

[00:18:54] And now you're starting to see the pilots kind of unfurl that.

[00:18:57] And then there's also another hidden thing I think pilots should look at going, and this

[00:19:01] kind of answering your previous question, you know, 529, if you have kids, which is

[00:19:04] a college savings plan, tax deferred college savings plan, you know, you can really put

[00:19:09] money into that for your children.

[00:19:11] And if they don't go to college, it's just another mechanism for a savings account for

[00:19:16] them.

[00:19:16] And that's something, believe it or not, that employers can also do something with.

[00:19:20] You know, it's another way to put more money in a tax deferred savings tax.

[00:19:24] Anyway, I'm getting way, way afield of your question, but these are things to think about.

[00:19:28] This is great.

[00:19:29] And I remember, I recall from our episode with Toby Mathis, top five ways that pilots can

[00:19:35] save on taxes, that HSAs are extremely unique in that it's tax-free when it goes in, it's

[00:19:41] tax-free growth, and it's tax-free when it comes out.

[00:19:43] Yeah.

[00:19:44] Because, I mean, that's the best of all worlds.

[00:19:46] Right.

[00:19:46] Yeah.

[00:19:46] Excellent.

[00:19:47] The problem is there are some rules with it.

[00:19:49] And like I said, you know, I'm not as familiar with FedEx's plan.

[00:19:52] I just know it's one of the first, and there are some rules about what transfers, you know,

[00:19:56] what after retirement and whatnot.

[00:19:58] And I need to review that a little bit more, but at some point in the future, you guys should

[00:20:01] look into that to compare those differences.

[00:20:04] Okay.

[00:20:04] Let's get back to what you educate your students on to do differently.

[00:20:09] I'd like to unpack that because a lot of captains and pilots listening to this that

[00:20:14] have children and maybe they can impart some financial wisdom on their families and likewise,

[00:20:20] or make some better decisions on their own.

[00:20:22] I'd like to kind of understand, okay, so you say you can't rely on a pension, you got

[00:20:26] to make your own way, but what are the top tips to provide them?

[00:20:30] One of the things we do with our students who typically are in that 18 to 21 year age bracket,

[00:20:34] however, we get some older than average for sure.

[00:20:37] So this applies to everybody.

[00:20:38] But one of the things we do is we demonstrate time value of money.

[00:20:42] So we do have a class, for instance, called airline pilot preparation.

[00:20:46] And so literally one of the things that you do is we sit there and say, okay, let's just

[00:20:51] invest $20 a month.

[00:20:53] You know, what is that when you're 65?

[00:20:55] And we use calculators for that, right?

[00:20:56] And everyone probably understands by now.

[00:20:58] I would hope that, you know, time value is such an incredible function and feature.

[00:21:03] That being said, what I do is I talk about the lessons we learned after 9-11, where the

[00:21:08] pensions went away.

[00:21:09] I talk about the fact that social security, it should be there.

[00:21:12] My guess is politicians will always figure out a way to make something there.

[00:21:15] But just, I wouldn't rely on that either.

[00:21:17] That's, I'm not trying to make a political opinion, but I just don't know if it's going

[00:21:21] to be there.

[00:21:21] And so what I do is we have the kids open a brokerage account, for instance.

[00:21:26] And the assignment literally is, I don't need to see your personal information.

[00:21:29] I just need you to come up with your laptop or your cell phone and show me that you've

[00:21:34] got a class.

[00:21:35] You can redact anything you want.

[00:21:37] But just show me that you open an account at wherever.

[00:21:40] Fidelity, TD Waterhouse, your local broker, Schwab is another one I see a lot of.

[00:21:44] You know, wherever you open it at, just show me that you open it.

[00:21:47] You'll get full credit for the assignment.

[00:21:49] You don't have to put any money in it.

[00:21:50] But just the fact that you've gone through opening it.

[00:21:52] And then we go through those calculations.

[00:21:55] And I do think, I have had students come back to me years later, because I've been teaching

[00:22:00] out for 20 years, just over 21 years.

[00:22:03] And they'll come back and say, you know, thank you for doing that.

[00:22:06] You know, you all know, everyone knows that if you just take an extra, even $100 a month,

[00:22:12] which can be a lot when you're a regional pilot.

[00:22:14] I mean, maybe not as much nowadays, but certainly back in the day.

[00:22:17] But you can get used to that, not spending that.

[00:22:20] And it's just what, five or six Starbucks, whatever the case may be.

[00:22:24] And it's such a tremendous benefit for you later on.

[00:22:27] And when you can demonstrate that through an assignment, I think it really solidifies

[00:22:32] and edifies the student.

[00:22:33] And I think I make believers out of them.

[00:22:35] It's hard.

[00:22:36] I'm not talking about the next generation.

[00:22:38] We always like to complain about the incoming generation.

[00:22:40] It's hard to make that connection on this.

[00:22:43] But I think we're able to do that because we demonstrate the math.

[00:22:46] Well, good on you for actually being, you know, a university like UND and yourself.

[00:22:51] You know, the teachers are everything.

[00:22:53] The professors are everything.

[00:22:55] For teaching kids real world practical lessons and knowledge, you know, that's so refreshing to hear.

[00:23:01] I appreciate you saying it.

[00:23:02] It's probably an illegal assignment.

[00:23:03] I'm sure if somebody were to complain or somebody, you know, they're making me open a brokerage account.

[00:23:09] It probably sounds like some kind of a weird, weird scam I got going on.

[00:23:13] But, but it literally is.

[00:23:14] You just have to open it.

[00:23:15] I don't care what you do with it.

[00:23:17] My guess is at some point someone will complain.

[00:23:20] Who knows?

[00:23:21] You know what?

[00:23:21] Bring it on.

[00:23:22] Bring it on.

[00:23:23] You know, you'll go down doing the right thing.

[00:23:24] So that's all we can do is the right thing, you know?

[00:23:26] Absolutely.

[00:23:27] For you.

[00:23:28] Yeah.

[00:23:28] Well, that's great.

[00:23:29] I want to unpack net present value and time value of money a little bit more before we jump

[00:23:34] onto the next subject.

[00:23:35] And that is when we look at debt arbitrage.

[00:23:38] So Jim, I'm sure you can speak to this.

[00:23:40] It'd be nice to get your thoughts.

[00:23:42] You know, I'm always a big proponent of not paying down low interest debt because of that same concept.

[00:23:48] And I think this is something that a lot of pilots get sucked into is, I'm trying to pay

[00:23:54] off my house.

[00:23:54] I'm trying to pay off my car.

[00:23:55] I'm trying to pay off all this debt because I want to do the Dave Ramsey thing and be debt

[00:23:59] free.

[00:24:00] Which again, it depends on who you are and what your personality type is.

[00:24:03] Because if you were going to spend the money and instead you're paying down your house,

[00:24:07] then good.

[00:24:08] Do that.

[00:24:09] But if the alternative is to put it into a brokerage account and earn interest on it,

[00:24:14] can you talk a little bit about time value of money and the depreciation of cash over time

[00:24:21] and why you might not want to pay off your house?

[00:24:24] Yeah.

[00:24:25] So house is one.

[00:24:26] Student loans is another.

[00:24:27] I came through.

[00:24:29] So you're preaching to the choir.

[00:24:30] I still carry my student loan debt.

[00:24:32] My wife laughs at me.

[00:24:33] She's like, why are you doing that?

[00:24:34] And I'm like, because it's 2%.

[00:24:35] Why wouldn't I do it?

[00:24:38] Not everyone was able to get those low student loan rates.

[00:24:40] I just happened to graduate and consolidate at a time where it was really low.

[00:24:44] So I was able to get that.

[00:24:46] So I have absolutely kept it.

[00:24:47] You have to beat inflation.

[00:24:48] It's just a simple math.

[00:24:49] You have to beat inflation, right?

[00:24:50] And you have to beat the interest rate.

[00:24:52] And for me, lately, of course, inflation has been up.

[00:24:55] But over time, that was like 4% to 5% I had to beat.

[00:24:59] And so same thing with a house.

[00:25:00] I've always kept a...

[00:25:02] Fact is, I just took out a HELOC.

[00:25:04] I'm certainly not trying...

[00:25:05] Not just.

[00:25:06] It was back when the interest rates were low.

[00:25:07] But the point is that I'm not saying you should just go out.

[00:25:13] I'm not doing the anti-Dave Ramsey because I know that works for a lot of people and that's

[00:25:17] great.

[00:25:18] But you're absolutely right.

[00:25:19] There is good debt.

[00:25:21] Debt arbitrage is very real.

[00:25:23] And if you know what you're doing, it's another way to maximize long-term savings.

[00:25:29] And I do think some people think they know what they're doing and maybe kind of pooch

[00:25:35] that a little bit.

[00:25:36] So you really have to be honest with yourself.

[00:25:38] Are you going to put the time and effort into this to maximize that?

[00:25:42] I have friends that do that.

[00:25:43] I'm a very big believer in good debt versus bad debt.

[00:25:46] It's credit card debt, 8%, 9%, whatever.

[00:25:49] Pay it off.

[00:25:50] Don't carry it.

[00:25:50] That's ridiculous.

[00:25:51] But if it's your house, that's also growing in value, hopefully.

[00:25:56] But in addition, you're at a very low interest rate, which a lot of people still are.

[00:26:00] Absolutely.

[00:26:01] Fact is, I would even go so far as to say if I had a loan from 10 years ago on a house and

[00:26:07] I was getting ready to move, I probably would rent it out.

[00:26:10] I know there's a lot of things with that, but it's such a great piece at a low interest

[00:26:15] rate that over time, I think the math's really going to work out on that.

[00:26:19] So big believer in what you just said, Tate.

[00:26:21] Thanks, Jim.

[00:26:21] Yeah.

[00:26:22] Always something fun to explore.

[00:26:23] It's like if inflation is running at 5% and you have a loan at 3%, your inflation adjusted

[00:26:29] interest rate is negative two.

[00:26:31] And your pay rates go up over time.

[00:26:35] We're going to be making over a million dollars a year as airline pilots in 20 years, right?

[00:26:40] And it doesn't mean that we're going to be being paid anymore in real value.

[00:26:45] Yeah.

[00:26:45] It's just the dollar decreases in value.

[00:26:48] And so your debt inflates away over time.

[00:26:53] You just taught me something there, Tate.

[00:26:54] I was doing the math wrong.

[00:26:56] So that's even better.

[00:26:57] You're right because of the inflation and the way it kind of dilutes the interest rate

[00:27:03] on that.

[00:27:03] That's great.

[00:27:04] I mean, you're going to have to do an episode on that and let me know.

[00:27:06] I'm going to listen to that.

[00:27:07] Okay.

[00:27:08] You got a deal.

[00:27:09] We just did, right?

[00:27:10] We just did.

[00:27:11] Yeah.

[00:27:11] Well, I'd really like to talk about this tech startup that you have because you've now

[00:27:15] transitioned from being an airline pilot to doing some amazing work for Alpa.

[00:27:21] And now you're the chief operating officer for a tech startup.

[00:27:24] Tell us about that.

[00:27:25] Yeah.

[00:27:25] The company's called Thread.

[00:27:26] It's based in Grand Forks, North Dakota.

[00:27:28] We have employees in about 26 states and a couple of different countries.

[00:27:32] It's a tech startup that services the utility industry with robotic inspections using drones,

[00:27:37] but also does a lot of data handling.

[00:27:40] And we've done really well.

[00:27:41] We've landed some good customers.

[00:27:43] But the reason why I think it might be something for your listeners to be interested in, certainly

[00:27:47] going out and founding a company with lots of employees is anything other than passive.

[00:27:51] But the one thing that might be of interest is, is I have personally witnessed, and I know all of us have felt the effect of AI and some of the capabilities and how it's just proliferating and growing very fast.

[00:28:04] And one of the lessons I have seen is if someone out there listening has a good idea for an app, right?

[00:28:11] And generally, I think almost everyone has a good idea, one or two really good ideas, business ideas.

[00:28:17] And yeah, right?

[00:28:18] And maybe you're flying the line with somebody and somebody's complaining about a flight time, duty time calculator.

[00:28:24] I know Alpa puts out a good one.

[00:28:25] But you have some ideas on how you can improve that.

[00:28:28] Maybe you want to put in some kind of an angle where it maximizes pay with your contractual work rules.

[00:28:33] So you're like, you know, I could really design something there.

[00:28:36] You know, you really can.

[00:28:37] You know, up until about two years ago, three years ago, you wanted to develop an app that you threw into the iPhone store or the Android store.

[00:28:44] You were probably looking at $100,000 of personal investment in six months to get to what we call an MVP, which is a minimally viable product.

[00:28:52] And even then, you'd have to support it and people be complaining about it.

[00:28:56] And, you know, it would cost a lot of money and it would be anything other than passive.

[00:29:01] However, now with some of the tools and just your listeners just have to do a YouTube search for, you know, passive SaaS, S-A-A-S, that's software as a service.

[00:29:11] They will see multiple people out there that have, it's kind of a merger of this gig economy with the tech startup.

[00:29:19] And they kind of come together now.

[00:29:20] And there's a new term out there called micro SaaS.

[00:29:23] So it's where somebody comes up with an app.

[00:29:25] The AI basically designs and deploys it.

[00:29:27] And right now there are people listening to this that have been programmers for years and they're going to be very, very mad.

[00:29:32] And it is kind of scary that this is changing.

[00:29:36] We see the same thing with pilots and automation as well.

[00:29:38] But the barrier to entry in this is the lowest I've seen.

[00:29:43] And it's only going to get lower.

[00:29:45] It's to the point now there's tools out there like Cursor and Replit and, you know, of course, ChatGPT and, you know, all kinds of things that when you combine them and you just watch a couple of YouTube tutorials, you can absolutely deploy an app.

[00:29:58] It's still up to you to market it a little bit, but you can also use ChatGPT to do that, you know, design a marketing thing for my SaaS.

[00:30:06] And it'll come up with probably, I mean, you could pay a lot of people money to market it or you could, you know, just kind of do it bare bones.

[00:30:12] And it's what we call micro SaaS.

[00:30:14] It's a burgeoning industry.

[00:30:16] And I think you're going to see a lot of millionaires minted in the next five to 10 years.

[00:30:20] A lot of them are going to be in that younger demographic because they're all over this.

[00:30:24] Because if you think about it, like it just, that is so incredible because people have ideas and they see inefficiencies and then the roadblock is they don't know how to code.

[00:30:34] That's right.

[00:30:35] Or they don't have the money to do it.

[00:30:37] So you're sitting on a big idea and all of a sudden you go, oh, well, this would just do it for me.

[00:30:42] And I feel like the trick about AI right now is not, I think the younger generation listening to this, oh, AI will just do it for me.

[00:30:51] Exactly.

[00:30:53] You've got to, you've got to have the prompt.

[00:30:56] You have to have the, you have to have the contextualization to do the thing that you want it to do.

[00:31:02] Yep.

[00:31:02] And I'm going through this personally right now.

[00:31:04] I don't mean to go on a tangent, but in my company, I'm actually hiring a lot of folks right now.

[00:31:10] And a lot of new operational leaders and things like that.

[00:31:13] And we build systems and processes.

[00:31:15] And in the past, I'd have to write a manual and go through all these things.

[00:31:19] But now like I'm using a thing called Loom, which everybody is very widely accessible to people.

[00:31:24] Yep.

[00:31:25] And you literally click a button at the end and it'll, it'll write the SOP based on the video that you filmed in a second.

[00:31:32] And it is dead nuts accurate.

[00:31:35] Yeah.

[00:31:35] Like no more typing out a manual.

[00:31:37] Like it's, it's crazy.

[00:31:38] And normally that'd bog me down.

[00:31:40] It's like, I have the process in my head.

[00:31:41] Now it gets me, and I sound like this is a Loom ad or something, but, but really though, I mean, if you're not embracing this AI, I mean, it's so cool how now your ideas can come to life.

[00:31:53] And you don't have those, a coder, I got to read a book.

[00:31:56] Cause I remember I wouldn't, when apps first came out, I have this book on my shelf.

[00:31:59] It's like coding for dummies, like making apps for dummies.

[00:32:02] And I started reading it and I'm like, I don't know the first thing about this.

[00:32:05] Even the dummy book couldn't make a dummy enough for me.

[00:32:08] So I was like, all right, I'll just not do this.

[00:32:10] Right.

[00:32:10] But I had all kinds of ideas.

[00:32:12] Absolutely.

[00:32:13] Yeah.

[00:32:14] And so anyway, I think that's so inspiring.

[00:32:17] Yeah.

[00:32:17] Right.

[00:32:17] I make a list of app ideas all the time.

[00:32:20] I just keep them my iPhone.

[00:32:21] I'm like, oh, this would, you know, it's always a pain point.

[00:32:24] Right.

[00:32:24] And I mean, most of these will never work, but many of them might.

[00:32:28] And like you said, everyone has that one good idea, I think, especially in their profession.

[00:32:32] And let me just, one other thing you said, you talked about, it doesn't do everything for you.

[00:32:37] And I don't want your listeners to think that, oh, I can just go do a chat GPT prompt and I can launch a SaaS business.

[00:32:41] Certainly that's, we're not there yet.

[00:32:43] That might be someday, but it's, we're not there today.

[00:32:45] But what I will say is when we go to hire, for instance, at Thread, if your AI skills are not up to par, we will absolutely take a pass on you.

[00:32:55] Which by the way, is the antithesis of what higher ed's doing and the schools are doing.

[00:32:59] They're telling kids, don't use chat GPT, that's cheating.

[00:33:02] I get it.

[00:33:03] It's similar to when we first started using calculators and Excel sheets.

[00:33:06] Oh, you're cheating.

[00:33:07] You're not manually.

[00:33:07] However, if you show up at our company for a tech job and you can't use an AI agent to code some basic stuff, we will not hire you.

[00:33:15] I mean, there's an MIT study that shows you're 40% more productive.

[00:33:19] If an expert is using AI, they're 40% more productive generally.

[00:33:23] So it's just, to your point, it's just something that is going to get bigger.

[00:33:29] But the barriers to entry for this are the lowest they've ever been and they're just going to get lower.

[00:33:32] I tell your listeners, if they've ever thought of something, now's the time.

[00:33:37] The most you're going to do is invest a little bit of time watching some YouTube tutorials.

[00:33:40] But before you know it, I don't know if it's true or not, but there's a lot of anecdotal evidence that there's a lot of young people that have done this.

[00:33:49] Some of these folks have launched 10, 15, 20 apps.

[00:33:52] And even if you don't make a billion dollars on each of them, if you're bringing in 10, 20, 30,000 a month on recurring revenue, right?

[00:34:00] Absolutely.

[00:34:01] And we talked about this offline as well.

[00:34:04] The real so what here is we take the tax angle on this show all the time.

[00:34:07] If you have a side hustle, if you have a business that now you can start running some expenses through,

[00:34:13] if your business is making 10 grand a month and you can run your car and your cell phone bill and all those sort of things through it,

[00:34:20] then you're not paying taxes on, you're not paying for your cell phone and your car with after-tax dollars.

[00:34:25] You're paying for your cell phone and your car with pre-tax dollars.

[00:34:28] Pre-tax.

[00:34:29] And so it's a huge, huge benefit in that respect.

[00:34:32] I mean, your business eventually is going to have to make money.

[00:34:34] You can't just continually lose money just to write it off.

[00:34:38] But hey, what a great, great thing.

[00:34:41] I mean, we're passive income pilots, right?

[00:34:43] But having an active side hustle can be very tax efficient.

[00:34:48] Absolutely.

[00:34:49] I mean, just for the software alone, not to get into the weeds, but your software development,

[00:34:53] you need to contact a CPA for this and probably an appropriate lawyer.

[00:34:56] But for instance, that software development can be depreciated.

[00:34:59] The amount of money you spend on developing a software,

[00:35:02] the IRS has all kinds of tax credits for that too, to help defer the risk of spending.

[00:35:06] So if you build a platform that has an ARR of, I don't know, $100,000 a year,

[00:35:11] something less than $10,000 a month, that's probably, again, talk to a CPA,

[00:35:17] don't go off of what Jim Hagan is saying.

[00:35:19] That's probably a $300,000 to $400,000.

[00:35:20] You should probably take a three to four X multiple on the ARR.

[00:35:23] And that's probably what you can depreciate.

[00:35:25] Now, like you said, eventually you have to show a profit.

[00:35:28] You have to show that you're making money, that you're there for a business.

[00:35:30] But for a few years, that's a big depreciation you can take off of,

[00:35:35] just off of your software development.

[00:35:37] And you can get some tax credits for that too.

[00:35:39] I mean, I'm not talking like a $3,000 tax credit.

[00:35:42] I mean, these can be substantial.

[00:35:44] And for the record, the ALPA Part 117 calculator is awful.

[00:35:48] So you heard it here first, somebody go make a better calculator.

[00:35:52] Great, great.

[00:35:53] Yeah.

[00:35:53] Jim, what website?

[00:35:55] So give me like the, you know, if you're listening to this and you're fascinated,

[00:35:59] let's go step by step.

[00:36:00] Where do I go to build an app?

[00:36:02] The two websites I would use, or three, I'm sorry, would be ChatGPT.

[00:36:07] Of course, everyone knows that.

[00:36:09] And then also Cursor.

[00:36:12] Cursor.

[00:36:12] I think it's Cursor.com.

[00:36:14] I think Cursor.ai might take you to somewhere else.

[00:36:16] But Cursor.com, you can actually go on there and you just send it prompts.

[00:36:21] Tell it what you want to do.

[00:36:22] And what you can do with ChatGPT is you can start with your general idea.

[00:36:25] I want to build a 117 flight app that incorporates contractual work roles.

[00:36:31] Here's a business idea.

[00:36:32] I'll just give you one of my business ideas just to show you.

[00:36:35] Maybe one of your listeners, because I'm not going to have time to develop this.

[00:36:38] So I'm just going to give it to you.

[00:36:39] You know, let me show you how this would work though.

[00:36:41] If you've ever filed a medical claim with your insurance for yourself or your kids,

[00:36:45] in my opinion, insurance companies, they will often deny benefits.

[00:36:49] I have a conspiracy theory that if they do that even 10% of the time when they know they're

[00:36:56] wrong, probably 50% of the people will never complain about that or never follow up.

[00:37:00] So that's quite an income source.

[00:37:01] But look what AI could do here.

[00:37:03] You could create an app where you could upload your insurance documentation and then upload

[00:37:08] your denial of benefits thing.

[00:37:11] And you can build an app that will generate a letter, tell you how to complain, make the

[00:37:15] complaint for you.

[00:37:16] So you could do this all on Cursor.com.

[00:37:18] Just tell it exactly what you want to do.

[00:37:20] Put this app in the app store, charge $1 a month for it, $3 a month for it, or do it

[00:37:26] on a per basis use.

[00:37:28] And I'm telling you, that's a viable business.

[00:37:30] I mean, think of any pain point you've ever had in your life.

[00:37:33] And there's going to be somebody that could develop an app that can take that away.

[00:37:37] 117 medical.

[00:37:38] So yeah.

[00:37:39] And then the other website, sorry, is Replit, R-E-P-L-I-T.

[00:37:43] There's kind of an argument back and forth, which one is better at coding.

[00:37:46] I think that as new AI models come out, they kind of ebb and flow.

[00:37:50] You know, so sometimes right now I use Cursor.

[00:37:53] I mean, I haven't deployed an app with this.

[00:37:55] I don't want to tell you're listening to that.

[00:37:56] But I have played around with it pretty extensively.

[00:37:58] And so I know it can be done.

[00:38:00] It's going to take a little bit of time, probably a little bit more than if you were just to go

[00:38:04] and invest in real estate.

[00:38:05] Although there's some due diligence you have to do there too, right?

[00:38:07] I mean...

[00:38:07] Oh, it takes time to invest in real estate.

[00:38:09] Trust me.

[00:38:10] Yeah.

[00:38:10] Yeah.

[00:38:10] So the passive part comes later on, right?

[00:38:12] Yeah.

[00:38:13] Yeah, absolutely.

[00:38:14] So my guess is it might even be that amount to the same amount of time.

[00:38:17] Put it in, try it out.

[00:38:18] The worst thing that can happen is you wasted a little bit of time, but you've also educated

[00:38:21] yourself.

[00:38:22] Yeah, totally.

[00:38:24] That's amazing.

[00:38:25] Very cool.

[00:38:26] All right.

[00:38:26] You heard it here first.

[00:38:27] We're expecting anybody who develops an app because they listened to this episode,

[00:38:32] we want to see it on the Facebook group and we'll all download it and start paying you.

[00:38:37] Perfect.

[00:38:37] Well, I don't know about that.

[00:38:39] I thought I was going the other direction where...

[00:38:42] We take a royalty?

[00:38:44] Yeah, we're going to take a cut.

[00:38:45] What do they say in...

[00:38:47] What's that show?

[00:38:48] Shark Tank?

[00:38:48] No, not Shark Tank.

[00:38:50] Silicon Valley.

[00:38:51] Oh, yeah.

[00:38:52] Great show.

[00:38:53] Incubator.

[00:38:53] This is the incubator, right?

[00:38:54] Yeah.

[00:38:55] You cut your incubator fees.

[00:38:57] That's right.

[00:38:57] You're in my house, so you owe me the...

[00:38:59] Yeah, exactly.

[00:39:00] That was a great show.

[00:39:02] That's pretty close to reality, by the way, for tech startups.

[00:39:05] I hope that probably...

[00:39:06] I bet that was such a fantastic show.

[00:39:08] I think it ended.

[00:39:10] They did that it ended, but it was one of the only shows out there.

[00:39:12] I'm like, man, that is my day-to-day life in a tech startup.

[00:39:16] Yeah, that and Portlandia.

[00:39:17] I think they nailed what Portland's like.

[00:39:19] Right.

[00:39:20] So you co-founded a tech startup with 60 employees now.

[00:39:23] What is a leadership quality or something that you've learned in leadership that you can apply

[00:39:28] in the flight deck?

[00:39:29] You have to be good with people.

[00:39:30] No matter what job it is.

[00:39:32] Not everyone is born, and it doesn't mean you're extroverted and you have to go and carry

[00:39:36] on long conversations with people, but you have to have some people intelligence.

[00:39:40] And a lot of people think that they just don't have that.

[00:39:42] But to me, the biggest leadership skill and what I look for when we go to hire managers

[00:39:46] and people like that is, are they good with people?

[00:39:49] Do they want to...

[00:39:50] And being good with people really comes down to just a couple of things.

[00:39:52] Can you listen and understand?

[00:39:53] It doesn't mean you agree, right?

[00:39:55] Let's say somebody comes to you with an issue and they're doing it all wrong, and you know

[00:39:59] they're doing it all wrong.

[00:39:59] You can still listen to that person, internalize what they're saying, try to understand what

[00:40:03] they're saying, and then work with them.

[00:40:05] And the best people in the industry, I've always thought, well, let me put it this way.

[00:40:09] This is what I tell our people all the time, that a toxic employee is worth 10 just average

[00:40:16] employees.

[00:40:16] And 10, you know, I mean, that's how much they can take things out.

[00:40:19] And a toxic leader is, it can absolutely destroy 100 employees.

[00:40:23] And so you got to find those people that are just really good with people and don't mind

[00:40:27] listening and have that patience and listening and understanding.

[00:40:31] Again, doesn't mean you can't be tough.

[00:40:33] You know, I was a union leader, right?

[00:40:34] I was an MC chair.

[00:40:35] I mean, every day you'd show up and there'd be some tough decisions you'd have to make.

[00:40:39] But that being said, you can still, at the end of the day, try to work on your relationships

[00:40:44] with your coworkers, your FO, your captain.

[00:40:47] I mean, it's what we call pilots have known for years, CRM, right?

[00:40:51] I mean, it's, you know, we laugh about it sometimes, but it is a critical life skill,

[00:40:56] whether you're flying an airplane during an emergency or whether you're talking to your

[00:41:00] bank teller, trying to figure out why the ACH didn't go through.

[00:41:05] Right.

[00:41:06] Absolutely.

[00:41:07] Yeah, we do that.

[00:41:08] We do that quite a lot.

[00:41:09] Is there something, was there something that you've done in your career that you can kind

[00:41:14] of show the cookies back to?

[00:41:15] I learned a lot about leadership when I took this course or was in this role or read this

[00:41:20] book.

[00:41:20] So I became the MEC chair in October of 2001, just shortly after 9-11.

[00:41:25] And I was tested on day one.

[00:41:27] And what happened was, and I'm not saying the company was being mean or vicious or whatever,

[00:41:33] but they saw an opportunity, right?

[00:41:35] They saw an opportunity, a new guy in here.

[00:41:37] And so I got a choice put to me, hey, we can prevent 50 furloughs if you just agree to

[00:41:43] X.

[00:41:44] And X, by the way, was something that we said we'd never agree to, right?

[00:41:48] As a union, we cut it.

[00:41:49] And it was like day one.

[00:41:51] And I'm like, holy crap, what did I get myself into?

[00:41:54] Do I let these 50 guys and gals go to the street or do I, you know, what an impossible

[00:41:59] thing.

[00:41:59] And that was a crucible, right?

[00:42:01] And so what I did is I talked to some previous people that I trusted that have been in that

[00:42:05] position.

[00:42:06] And what I learned from that, and I'm not saying just devalue anyone else's advice, but

[00:42:12] the people in life that will give you the best advice for being a leader are the people

[00:42:16] that have gone through it before.

[00:42:17] Not necessarily the people that have learned about it from a textbook, read about it.

[00:42:21] I mean, certainly they have their advice, but until they feel that fear of your decision

[00:42:26] is going to send 50 people to the street or you're forever going to sell your soul to

[00:42:30] the company.

[00:42:31] Until you feel that, that's what I think bears leadership.

[00:42:34] And that's when leadership is born.

[00:42:35] So that was my crucible.

[00:42:37] That was my moment.

[00:42:38] And then after that, I read a lot.

[00:42:40] I don't know if you're familiar with Colin Powell.

[00:42:42] He's passed away now, but he was, yeah.

[00:42:44] So he wrote a book called My American Journey.

[00:42:46] It's a big, long read, but that thing is so full of leadership lessons.

[00:42:51] And one of the things that he said always stuck with me, no matter how bad it is today, when

[00:42:55] you wake up tomorrow, it's probably not going to be that bad.

[00:42:57] And he had a lot of little lessons like that.

[00:43:00] He also talked about one.

[00:43:01] I don't mean to keep going, but I think this might be pretty interesting.

[00:43:04] He also talked about being a floor sweeper in college.

[00:43:07] And here he was, the secretary of state, chairman and joint chiefs of staff, but he still would

[00:43:12] put on his resume that he used to sweep floors in college.

[00:43:15] And he was asked about that once on an interview.

[00:43:17] You know, why did you, why do you put that on there?

[00:43:18] He goes, hey, listen, man, when I was a floor sweeper, I was proud of that job.

[00:43:22] And I was determined to be the best floor sweeper in the world.

[00:43:25] Now, I don't know, guys, I don't know how many floor sweepers there are in the world,

[00:43:28] but I'm sure it's in the millions.

[00:43:29] And imagine that kind of mentality to where you're going to be the best one of those in the

[00:43:34] entire world of all the people that do that.

[00:43:36] And to actually believe that, even if you come up short, you're going to be pretty amazing.

[00:43:41] And, you know, if you study this guy's career, you know, he came through a different path

[00:43:45] than most that get to the chairman of the joint chiefs of staff, probably could have been

[00:43:48] president if he wanted.

[00:43:49] And in all of that being said, when those are the, those are the things that have affected

[00:43:53] my leadership was the crucible I was in day one of being the MEC chair.

[00:43:57] And then also the lessons I learned from reading about Colin Powell and some of the stuff

[00:44:01] I've always, before he passed away, I really wanted to meet him and, you know, just tell

[00:44:05] him, you know, how much of an impact he had.

[00:44:07] But anyway, hopefully that answers your question, Ryan.

[00:44:09] I'm sure there's been a lot of other instances.

[00:44:12] Those are the big ones.

[00:44:13] I love that.

[00:44:14] I mean, be the best you can be at no matter what you're doing.

[00:44:17] And I think that is just such a good life mentality.

[00:44:20] Yes.

[00:44:20] If you're a co-pilot, if you're a captain, if you're, you know, a flight instructor, if

[00:44:25] you're, be the best thing, you know, best person you can be at every single role

[00:44:29] that you do, God, that's such a good, that's valuable advice and hard to carry out.

[00:44:33] Right.

[00:44:33] I mean, when we get into mundane jobs or whatever, you know, it's, it's hard to be the best you

[00:44:38] can be every day because you feel like maybe it doesn't contribute or it's not significant.

[00:44:43] Right.

[00:44:43] And that's when we start to lose that professional edge.

[00:44:45] So that's right.

[00:44:46] And sometimes it's hard to work with people that are thinking they're the best in the

[00:44:49] world at something too.

[00:44:50] So you have to, you have to kind of, you have to kind of meter that, but, uh, but yeah, I

[00:44:54] think even if you can harness a portion of that, I think it's really helpful.

[00:44:57] That's great.

[00:44:58] Absolutely.

[00:44:58] Well, we'll link to that book in the show notes.

[00:45:01] Yeah.

[00:45:01] Jim, thank you so much for your time today.

[00:45:03] Really appreciate the wisdom.

[00:45:04] Thanks for sharing your story.

[00:45:05] And we got a lot of little bits of information that can be applied in our everyday lives.

[00:45:10] Well, I'm happy to be here and I appreciate what you guys are doing.

[00:45:13] As I told you before the podcast, your mission is very critical, not just the pilots, but it's,

[00:45:18] it's critical to anyone that could listen.

[00:45:20] I mean, you know, we don't know what's going to happen in the future.

[00:45:23] So we all have to control our own destiny as much as possible.

[00:45:25] That's right.

[00:45:26] Well, if you're a listener, please, we haven't really said this all that much on the show.

[00:45:30] Please share it.

[00:45:31] I know, uh, you know, everybody I talked to says they heard about it from a captain they

[00:45:34] were flying with or an F.O.

[00:45:36] they were flying with, but it helps us bring guests like Jim on, share this with as many

[00:45:40] people as you possibly can.

[00:45:41] Uh, we appreciate your, your listenership and, uh, and thanks for, thanks for tuning in to

[00:45:46] the next F.

[00:45:46] Phil.

[00:45:47] Phil.

[00:45:47] Phil.