Dreaming of a multimillion dollar nest egg? Kevin Gormely, CFP®, CPA shares 7 practical actions pilots can take to significantly increase their chances of achieving financial freedom. Learn valuable tips like maximizing retirement contributions, understanding healthcare costs, and creating a strategic savings plan. The video is inspired by the wisdom of Charlie Munger, who emphasizes consistent smart financial decisions over chasing high returns. Forget the "when I get rich" fantasies and start building your wealth today!
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this video will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning and are subject to change at any time due to the changes in market or economic conditions.
Kevin Gormley, CFP® Andy Christopher, CFA® , lead financial planners from Leading Edge Financial Planning, discuss the details of the long-term disability plan offered by United Airlines.
The key takeaways from the video are:
The long-term disability benefit pays out 50% of your pay until you reach age 65, which is the mandatory retirement age for pilots.
The benefit is tax-free.
The company pays for 75% of the premium, with the remaining 25% being paid by the pilot after tax. There is a cap on the monthly benefit amount.
The plan offers some additional benefits such as continued health insurance coverage at the active pilot rate and non-elective contributions to your 401k plan.
There are different waiting periods depending on whether the disability is occupational or non-occupational.
Pilots who are considering additional coverage on top of the United Airlines long-term disability plan can look into options offered by ALPA.
Kevin and Andy recommend that pilots carefully consider their options and do some budgeting to see if the 50% benefit will be enough to cover their expenses in the event of a disability. They also recommend having an emergency cash fund on hand to supplement the disability income.
Note: Leading Edge Financial Planning is not affiliated with United Airlines. This video is informational only. Please consult an expert before making a decision.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this video will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning and are subject to change at any time due to the changes in market or economic conditions.
As a brand-new pilot, one of the first things you learn is how to mitigate the risk of the potentially deadly physiological phenomenon known as spatial disorientation or spatial-D. In pilot speak, spatial-D is when your body is telling you one thing and your flight instruments (and airplane) are telling you something completely different. Sadly, spatial-D has claimed the lives of many pilots.
One of our newest Leading Edge team members and previous Marine F/A-18 fighter pilot, Mark Covell discusses just one example of spatial-D. Mark shares how carrier pilots tend to feel like they are pitching up as they are launched off the carrier at night due to the massive acceleration from the catapult. During daytime VFR conditions, this is probably a non-issue. However, in weather or at night, this type of spatial-D is potentially deadly.
What does spatial-D have to do with investing and retirement planning? Personally, I feel like all of 2020 could be compared to being catapulted off a carrier at night, not knowing what is up or what is down.
During the heat of the battle from February until the markets settled a bit in early April, investor emotions were all over the place. Years of stock market gains evaporated in days, even hours. Furthermore, many people thought, and the news media quickly suggested, we were headed for the second Great Depression. Don’t get me wrong, anything was (and is) possible. Sometimes, the unknown can be terrifying.
One slightly humorous example of investor spatial-D was early in the pandemic when the share price of ticker symbol ZOOM increased dramatically due to investors buying up shares as quickly as possible. Zoom Technologies, a so-called penny stock had risen more than 240% in the span of a month before the SEC suspended trading. Unfortunately, the traders failed to realize the ticker symbol ZOOM did not represent the Cloud Video Conferencing company Zoom they thought they were purchasing – Ticker symbol ZM.
In the airplane, pilots must fight spatial-D by cross-checking and TRUSTING their instruments. As an investor, if you did not trust your instruments during 2020, it may have been very costly.
So, it’s a dark and stormy night, what are the instruments you rely on and trust? What are your primary and backup instruments? Here are four instruments that I think can save your investments as well as your financial sanity during uncertain times…
1. Cash reserves
Emergency Funds. Having extra cash can prevent withdrawals from retirement accounts or excessive credit card debt in emergencies. Studies also show having cash in the bank makes people happy. In an article posted on PYMNTS.com, Can Cash Really Make You Happier, Joe Gladstone, research associate at the University of Cambridge in the U.K. and co-author of two recent studies about money and happiness said,
“We find a very interesting effect: that the amount of money you have in your bank account right now is a better predictor of happiness than your aggregate wealth,” Gladstone explained. “Having more money in their bank account makes people feel more financially secure, which leads to an increase in happiness.”
2. Have a working knowledge of financial history.
You don’t have to be an expert or financial historian, but I believe being familiar with financial history is akin to training before you go on a flying mission. New military pilots call this chair flying. Athletes and musicians use a technique called visualization that helps them prepare for uncertainty and reduce anxiety before a sporting event or concert.
3. Admit that times are scary and you do not know what’s going to happen.
This may sound obvious, but I’ve seen many people get themselves into a “square corner” because they assumed that something was going to happen when in fact there was no indication or possible way of knowing what the future may hold. We have heard investors say, “My gut tells me…” many times. Don’t ever make investment decisions based on what your gut tells you!
Some of the best investors in the world invest with the mindset of preparing to be wrong. In other words, they diversify their investments. Diversification is not popular or sexy because it’s like admitting that you’re not all-knowing and you do not know what’s going to happen in the future. Diversification allows you to be successful in multiple investment and economic scenarios. Furthermore, diversification can feel disappointing but prove to be a profitable strategy over the long term.
BlackRock Investment Management Company posted the graphic below on their investor education website about diversification and “S&P Envy” over the last 20 years.
4. Prepare and Plan by having a clear vision of your goals and priorities.
If you don’t understand the “why” behind your investment strategy as well as why you’re investing and saving in the first place, you will most likely bail out on your plan during difficult and uncertain times. Changing your investment plan mid-crisis creates a very high likelihood that your investment returns will be significantly lower than had you remained invested as originally planned. Simon Sinek started a movement by encouraging businesses to “Start with Why.” It’s a powerful mindset that leads to trust, inspiration and success. I believe the same applies to your financial and investment game plan.
5. Remember you are invested in companies – not politics.
Sometimes our politics cloud the investment and retirement planning picture. This rule falls under the axiom; “control the controllable.” If you’re allowing your politics to affect your investment game plan than you may want to see rules number two and three above.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this Podcast will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning and are subject to change at any time due to the changes in market or economic conditions.
Mark Covell (financial planner and American Airlines pilot) and Kevin Gormley (CFP®, CPA, PFS) discuss the financial implications of the salary increase that comes when pilots get promoted from First Officer to Captain ("left seat").
________
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this video will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning as of 12/06/2022 and are subject to change at any time due to the changes in market or economic conditions.
As a brand-new pilot, one of the first things you learn is how to mitigate the risk of the potentially deadly physiological phenomenon known as spatial disorientation or spatial-D. In pilot speak, spatial-D is when your body is telling you one thing and your flight instruments (and airplane) are telling you something completely different. Sadly, spatial-D has claimed the lives of many pilots.
In this video, one of our newest Leading Edge team members and previous Marine F/A-18 fighter pilot, Mark Covell discusses just one example of spatial-D. Mark shares how carrier pilots tend to feel like they are pitching up as they are launched off the carrier at night due to the massive acceleration from the catapult. During daytime, VFR conditions this is probably a non-issue. However, in weather, or at night, this type of spatial-D is potentially deadly.
What does spatial-D have to do with investing and retirement planning? Personally, I feel like all of 2020 could be compared to being catapulted off a carrier at night and not knowing what is up or what is down.
During the heat of the battle from February until the markets settled a bit in early April, investor emotions were all over the place. Years of stock market gains evaporated in days, even hours. Furthermore, many people thought, and the news media quickly suggested we were headed for the second Great Depression. And don’t get me wrong, anything was (and is) possible. Sometimes, the unknown can be truly scary.
One slightly humorous example of investor spatial-D was early in the pandemic when the shares of ticker symbol ZOOM shot up due to investors buying up shares as quickly as possible. Zoom Technologies, a so-called penny stock had risen more than 240% in the span of a month before the SEC suspended trading. Unfortunately, the traders failed to realize the ticker symbol ZOOM did not represent the Cloud Video Conferencing company Zoom they thought they were purchasing – Ticker symbol ZM.
Here is the headline from MarketWatch.com dated February 27, 2020.
In the airplane, pilots must fight spatial-D by cross-checking and TRUSTING their instruments. If, as an investor, you did not trust your instruments during 2020, it may have been very costly.
So, it’s a dark night and the weather is terrible. What are the instruments you trust? What is your primary and backup instrument? Here are four instruments that I think can save your investments as well as your financial sanity during uncertain times…
1. Cash reserves – Emergency Funds.
Having extra cash can prevent withdrawals from retirement accounts or excessive credit card debt in emergencies. Studies also show having cash in a bank account makes people happy. In an article posted on PYMNTS.com, “Can Cash Really Make You Happier”, Joe Gladstone, research associate at the University of Cambridge in the U.K. and co-author of two recent studies about money and happiness said,
“We find a very interesting effect: that the amount of money you have in your bank account right now is a better predictor of happiness than your aggregate wealth,” Gladstone explained. “Having more money in their bank account makes people feel more financially secure, which leads to an increase in happiness.”
2. Have a working knowledge of financial history.
You don’t have to be an expert or financial historian, but I believe being familiar with financial history is akin to training before you go on a flying mission. Pilots call this chair flying. Athletes and musicians use a technique called visualization that helps them prepare for uncertainty and reduce anxiety for a sporting event or concert.
3. Admit that times are scary, and you do not know what’s going to happen.
This may sound silly, but I’ve seen many people get themselves into a “square corner” because they assumed that something was going to happen when in fact there was no indication or possible way of knowing what the future may hold. We have heard investors say “my gut tells me…” many times.
Some of the best investors in the world invest with the mindset of preparing to be wrong. That’s why diversification is not popular or “sexy” because it’s like admitting you don’t know what’s going to happen in the future, so you must prepare for multiple scenarios. However, diversification can feel disappointing but prove to be a profitable strategy over the long term.
BlackRock Investment Management Company posted the graphic below on their investor education website about diversification and “S&P Envy” over the last 20 years.
4. Prepare and Plan by having a clear vision of your goals and priorities.
If you don’t understand the “why” behind your investments as well as why you’re investing and saving in the first place, you will most likely bail-out of your plan during difficult and uncertain times. Changing your investment plan mid-crisis creates a very high likelihood that your investment returns will be significantly lower.
Simon Sinek started a movement by encouraging businesses to “Start with Why.” It’s a powerful mindset that leads to trust, inspiration and success. I believe the same applies to your financial and investment game plan.
5. Remember that you are invested in companies – not politics.
Sometimes our politics clouds the investment and retirement planning picture. This rule falls under the axiom; “control the controllable.” If you’re allowing your politics to affect your investment game plan than you may want to see rule number 2 above.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this video will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning as of 12/09/2020 and are subject to change at any time due to the changes in market or economic conditions.
How much does luck have to do with building a successful retirement nest egg? Consider what would happen if immediately following your retirement there is a recession. Talk about bad luck! Unless… you planned for it.
At Leading Edge we plan under the assumption that a recession may happen at the time of your retirement. In this video, Charlie and Kevin discuss how to run your plan through a financial simulator in order to forecast what your financial picture might look like if the market turns south when you turn 65, and discuss what you can do NOW to insure against a “bad luck” scenario.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this video will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning as of 07/20/2020 and are subject to change at any time due to the changes in market or economic conditions.
As an airline pilot, you may be eligible to start drawing your Social Security as soon as you retire from the airlines, but should you? As with so many things in finance, it depends. Optimizing your social security benefit is complicated and it can be confusing trying to grasp all of the moving parts. Plus, what about…
✈︎ When is your government-defined Full Retirement Age?
✈︎ Will your spouse receive any benefits?
✈︎ Do you anticipate retirement income from other sources?
✈︎ And,… will Social Security even be around by the time I retire? (Spoiler alert: yes, we think it will.)
Kevin and Charlie discuss how the answers to these questions correlate and share their 3 RECOMMENDATIONS on how to decide when is right for you to begin your benefit.
We love hearing from you! Please don’t hesitate to call or email if we can help you, 865-240-2292.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this video will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning as of 02/10/2020 and are subject to change at any time due to the changes in market or economic conditions.
Whether retirement is 5 years away or 15, it’s time to plan NOW.
Are you nearing the end of your aviation career? You may not be ready to take off your epaulettes quite so soon, but the FAA currently mandates all airline pilots retire at the age of 65. Are you financially ready to make the transition?
We are airline pilot specialists!
The planners at Leading Edge have years of experience helping pilots from all of the major U.S. airlines grow and protect wealth so they can have as much fun in retirement as they did flying airplanes! In this video, Charlie Mattingly, Principal, CFP®, MBA and fellow airline pilot describes the value Leading Edge can bring to your financial plan.
Want to skip ahead in the video?
Here are the topics broken down by time marker:
00:04 How does Leading Edge Financial Planning help people execute on plans? 00:36 Why is it a good time to invest TODAY vs waiting? 01:12 Leading Edge helps determine if a second business or real estate is a good idea. 02:33 How can Leading Edge help lessen financial emotion? 03:46 Why should a pilot choose Leading Edge? 04:59 Worst and best financial analogies with flying. (Just for fun!)
Click HERE to book a free one-hour consultation. Or call us at 865-240-2292.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this video will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning as of 01/27/20 and are subject to change at any time due to the changes in market or economic conditions.
