Affordable Flying
In 1980, the decennial census counted 226,545,805 people in the United States. That same year, the FAA reported more than 827,000 of those folks held pilot certificates. That’s about one out of every 300 people. By the end of 2009, the U.S. population had climbed to nearly 30% to 307,000,000 while the pilot count had dropped by 25% to 594,000. Today less than one out out of every 500 Americans is a pilot. As the saying goes, there are statistics, damn statistics, and lies. But this is no lie: the world of general aviation is getting smaller, and every organization from AOPA to EAA has had their crack at explaining why. They’ve taken surveys, held town hall meetings, hired experts, analyzed statistics, published articles, and made proclamations for...
Read MoreHousing Bubble Blogs
One of my guilty pleasures lately has been reading a few of the many so-called “housing bubble blogs”. These are web sites dedicated to tracking the carnage — excuse me, I mean “adjustment” — in the real estate market. Until recently there were only a few of these sites on the Web. Now there are so many that a person can barely keep track of them all. Some are city-specific, like the Irvine Housing Blog. Others are regional or even national. I’m partial to the Irvine site because that’s where I live. The site has even featured a property right next to mine. One of my favorites is the concisely named Housing Bubble Blog. Unlike the Irvine-based site, which analyzes specific properties within the city, this one...
Read MoreA Carb-Free Future
As large as the aviation industry looks to those on the outside, once you’re on the other side of the fence, it doesn’t take long to realize that it’s a very small world. One of the big challenges facing that world has been from product liability issues. In fact, for about a decade, the general aviation industry stopped producing new airplanes. From the mid-80s to the mid-90s, product liability was such that every major OEM exited the business. The insurance costs rose, the manufacturers had no choice but to pass that on to the consumer, who was summarily priced out of the market. Sales fell, per-unit liability costs rose further, and the cycle spiraled downward until even those companies which still had an operating production line were only...
Read MoreReal Estate Market Finally Gets Real
I hate to say “I told you so”, but I did. Again and again. And again. And… well, you get the idea. 2006 may well go down as the year Pluto was suddenly just another big rock, Brad and Angelina had a baby and the real estate market slid from great to miserable in a few short months. In data released Tuesday, prices declined in more than 61 of the 275 cities tracked by the Office of Federal Housing Enterprise Oversight. And the deceleration has been fast: The agency reported that the decline in quarterly appreciation was steepest in more than three decades. Everywhere you turn, articles abound with titles like “When Homeowners Are Desperate to Sell”, “What To Do If Your House Isn’t Selling”, and “Sharp...
Read MoreAvgas Prices
Think it’s expensive to fill up your car? According to AirNav, aviation fuel is now running as high as $6.79 a gallon. Yes, you read that right. We’re pushing seven dollars per gallon. Anyone want to take a guess about how high it will go? Eight dollars? Ten? Assuming a fuel flow of 30 gallons per hour on takeoff, an SR22 would be burning nearly $300 an hour just in gas. Filling up an 80 gallon tank would cost $800. I’d love to open an FBO just so I could take pride in having the most expensive fuel on the planet. And you know what? People would still line up to buy it. I don’t see any of these FBOs suffering. Good times, my friends. Very good times.
Read MoreThe Unstoppable O.C.
NEW YORK (FORTUNE) – If you want to know where real estate prices are headed in California’s Orange County, the man to talk to is Gary Watts. The Mission Viejo broker has 35 years of experience and doubles as a spokesman for the O.C.’s Association of Realtors. But it’s his track record more than his resume that has won him serious credibility with his peers. In 1989 he earned the nickname “Scary Gary” by correctly predicting that the housing market in Southern California was headed for a tumble. Then, in 1996, he was one of the first to call the area’s rebound. Since 1997, Orange County home prices have seen a 195 percent rise. Will the good times last another year? Gary doesn’t hesitate. “Fifteen percent is...
Read MoreFuel for the Fire
Sometimes I wonder if I’m the only one that sees the “big picture” the way I do. Recently, a fellow pilot in Arizona took the time to write about the escalating fuel prices and what this rise in energy costs is doing to the economy Groceries are already going up in price here, it’s in small increments but if you think back to last year it’s clear many items are up 30% or more. Ron, this fuel cost is going to change our country completely. I go through about 20 gallons of gas a week in my car. Not long ago that cost about $25, now it’s $60. Multiply that by 52 weeks a year and it’s now costing roughly $2000 more a year for one car. That’s about what my C310 insurance costs.My 100LL cost has doubled in the last 2...
Read MoreCan America Compete?
The July 25th edition of Fortune magazine features a pretty good analysis of the emerging challenges America faces from the likes of India and China. And, frankly, from our own affluence. The article is particularly noteworthy because globalization is making it harder to seperate the wheat from the chaff when attempting to define causes and solutions. It’s not an “us vs. them” situation anymore. Not that it ever was. But American companies now assemble American-designed products using parts manufactured offshore. Or vice versa. A foreign company will assemble their products here in the United States using parts that were manufactured by American. The Honda Accord is a good example. Is it a foreign product, or a domestic one? And while...
Read MoreNo Inflation?
Talking heads in the financial sector seem quite fond of crowing about how well the economy is doing. One metric they never fail to point to is the Consumer Price Index, a primary indicator of inflation. It invariably shows that we’ve got the perfect amount: approximately 3% per year. Does that make sense to you? Now keep in mind I’m not a doomsday guy. I think the long terms prospects for our country are bright. But the focus seems to be on the short term right now, and that might lead to some serious pain in between. From where I sit, it seems the vast majority of an average American’s income goes toward housing. Home prices have been on an exponential rise for half a decade. The cost of higher learning has outpaced the mythical...
Read MoreLifetime Savings Accounts
I stumbled upon something interesting on the web the other day, the Lifetime Savings Account. The LSA is a Bush administration proposal for a new kind of retirement account that might best be described as a Roth IRA on steroids. The discovery of the LSA proposal was exciting to me, because as a sole-proprietor with “variable” income, my only regular avenue for tax-advantaged retirement saving has been the Roth IRA. The problem with Roths is that the contribution limits are extremely low, maxing out at $3,000 per year. Obviously, unlike the 401k, there is no employer matching my contributions, not to mention no discounted stock purchasing, no options, no perks of any kind to sweeten the pot. I established a Roth IRA because it has one big advantage...
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