Financial Advice for Pilots - What is your Plan B?
Financial Advice for Pilots - What is your Plan B?
As more and more borders were closing in March, more and more operators parked their aircrafts. Some fleets are nearby & ready to go, while others seem inevitably destined for the boneyard.
Some ex-pat pilots made their way home before the walls went up, while others were set to ride it out in a foreign land. Some pilots have just hung up their wings, while bright-eyed beginners wonder what they’ve signed up for? As didn’t the brochure say that there was a shortage of pilots?
HOW LONG?
It has been an incredibly tough time for everyone, particularly in the aviation industry with many enduring several months of uncertainty, whether that has been battling unemployment or being grounded.
For many it may not have come as a complete surprise. The rumour mill was working overtime, with COVID-19 decimating the world, air travel was dwindling.
The most common question that was being asked was “How long do you reckon?”
After nine months, we finally have further clarity with domestic flying to be up to 40% capacity by early December, but international flights remain dependent on a vaccine & nervous humans regaining their confidence to travel.
CRISIS
For nine months there was a degree of uncertainty & that is never great.
Annual & long service leave for many has diminished & the music has stopped. The household income has stops for many aviation families.
As a pilot you are trained to make decisions based upon the best available evidence, so it is difficult to comprehend for many, with limited information and evidence available to consume.
However, as pilots, it is not in your nature to panic or throw your arms up. Your nature & your training is to analyse the problem and find the best way to address it. Consequently, over the past 9 months many aviation families have spent countless hours gathering facts & formulating a bare-bones financial plan.
This may be the first time for some in experiencing this predicament, for others this is an all to familiar scenario, experience uncertainty during the collapse of Ansett & the 9/11 attacks, they may be better prepared for the journey ahead.
However, it has provided a cause for pause.
ADVICE FOR GROUNDED/REDUNDANT PILOTS/CREW
Welcome change. Pivot if you need to.
The most critical piece of advice that we discuss when partnering with people (not just in aviation) is to always have an alternate career or income stream at the ready in the event of losing your health or job. One day you might be made redundant or become medically unfit.
Many of the clients we partner with, are looking at creating financial freedom. To them, this means creating an income stream that can replace their employment income & provide them with choices, in the event of redundancy, injury, illness or death.
Furthermore, the uncertainty facing the aviation industry at the moment is not just financial. During times of uncertainty many experts advise that you should look for ways to remain motivated & active, both physically and mentally. It’s easy to let these things slide when normal routines are broken & the headlines are not encouraging.
Our final piece of advice is that we all face some kind of adversity in our lives. That may be financial, it may be isolation, it may be our health, it may be a fear of the unknown future. If we act on emotion, we rarely choose the best plan.
Our team partner with you to support you in taking the emotion out of your decisions, whilst providing you with all the information to make an informed decision.
UNCLOUDED VISION
We spend much of our lives, personally & professionally on autopilot.
Modern planes spend most of their time flying themselves. Large or small, a plan is entered based on demands & predictable conditions & then it's executed. These days pilots touch the controls for the majority of the time during departure and arrival, but mostly let the machine do the busy work that used to consume them.
It's largely the same for your financial plan.
You punch your flight path in, based on demands & predicable conditions to your destination.
Then decisions are made based on evidence, research & best practice to have a smooth landing at your final destination (financial goals).
Each year, your financial planner will review the years performance & your personal situation, before aligning them with the projections & objectives for the coming year(s).
Stop wondering about what's broken & start concentrating on what's working.
However, this year is not normal. With many facing challenges & obstacles to their plans. This year it is more critical that you have your plan A & plan B in place, providing you with confidence, financial security & financial freedom.
As many are currently feeling a plethora of emotions including; nervous, stress, worry, depression & anxiety, uncertainty has definitely intensified these emotions. Accepting your situation by realigning your personal financial plan & controlling what you can control, can support you in alleviating some of those emotions, creating time, where time gives you options.
PLAN A
For many PLAN A is generally what will take place in a “normal” year, where you are employed, with no financial obstacles or global pandemics.
You understand how you are going to achieve your financial goals. Where the funds for: renovations, private school education, holidays, household expenses, living expenses, creating wealth, & even providing for the retirement you want, so you can retire on your terms.
PLAN B
However, this year most in the aviation industry have had their PLAN A thrown away.
As with every time an airliner taxies out for take-off, the crew have planned for the worst.
In the cabin, the flight attendants conduct a silent review of their duties, should the take-off be abandoned. On the flight deck, the pilots have calculated their go/no-go speed and reviewed how they’ll bring the aircraft to a halt if there’s a problem before that speed and how they’ll keep the aircraft flying in the event of an issue beyond it. They’ll have calculated the performance of the aircraft should an engine have failed and considered the surrounding terrain and timeframe for a return landing. Of course, they never want this to happen, but should it take place, they are prepared.
Your PLAN B is the plan for the worst. This is your insurance policy.
Whether you are made redundant, are unemployed, grounded, looking for retirement, injured or ill, PLAN B provides you with the blueprint to instil you with confidence that you & your family are financially secure, providing you with the freedom & choice around what you do next.
However, for many pilots, they don’t have a PLAN A, let alone a PLAN B.
We have seen over the past nine months, that during a crisis, the fear response of; fight, flight or freeze sets in & decisions must be made, 70 per cent of people will just follow the crowd.
For those that do not have a PLAN B and can start to see the clear skies, it may provide an opportune time to recognise that this crisis will pass & ask yourself how I can best ensure against future unforeseen turbulence.
Remember it is essential to have options & a plan – just as you do in the aircraft as you taxi out for take-off.
There is still a lot of uncertainty, especially for international pilots but having the framework of a plan allows you to look ahead and not down at your feet.
What’s your Plan B?
CLEAR SKIES AHEAD?
There still remains a lot of uncertainty around the world.
However, there have been glimmers of hope in recent days, with the announcement regarding domestic flights & a positive update on a COVID-19 vaccine.
SERVICES ARE INCREASING
Qantas & Jetstar will increase the amount of flights per week between Victoria and NSW from just 10 to 250 when the border opens.
The new services, across five routes, will return the business to 40 per cent pre-pandemic capacity and mean more employees can return to work.
Currently, the Qantas Group is only operating flights between Sydney and Melbourne but later this month that will include services to and from Ballina Byron Bay, Mildura, Newcastle and Bendigo.
This is welcomed news for the Australian aviation families. There is still a long way to go, but it provides an opportunity for many to be able to provide for their families again.
VACCINE NEWS
One of the COVID vaccines purchased by Australia is “90 per cent effective” and could begin being rolled out worldwide by the end of the year, in the most significant breakthrough in the crisis yet.
Global pharmaceutical giant Pfizer said its jab’s performance was better than expected and will soon submit data to the FDA, the US’s drug approval agency.
CONCLUSION
With this good news, it is not time to put your head in the clouds.
As a pilot you are trained to make decisions based upon the best available evidence.
The evidence of the past nine months should provide you with the basis to put in place your PLAN A & PLAN B to ensure your family is protected & ready for any unforeseen turbulence in the future.
Make a plan, prepare and execute.
