WIX Archives

Am I?

Posted by bdk on Fri Oct 25, 2002 06:38:39 PM

In reply top You´re putting me on!!!!!! posted by Christer on Fri Oct 25, 2002 04:37:30 AM

The Kalamazoo Air Zoo has a warbird collection they don't fly due to the cost of the insurance. There is a recurring cost for the airplane (the operating/storage/insurance/wear expenses), and a non-recurring cost (the initial purchase).

If you pay $1M for a Spit, then $1k per month for hangar rent, a wise investor would say this is a bad deal unless the aircraft appreciates at least a like amount.

The Wall Street Journal once had an article about Warbirds as an investment, and many investors collect vintage Ferraris because they tend to hold their value better than other financial instruments (like stocks) in a recession.

The wealthy people who buy and sell these things are typically financially smart people. Some are in it for the enjoyment (like all of us), some are in it for the investment, and most are in between (that's how I sell these kinds of projects to my wife!). My wife says that I throw my money away on hangar rent, I counter by saying that my T-6 is appreciating at a like rate... :-)

: : Over 10 years for example, if I paid $15k for a new car,
: $
: : 5k over the term of the loan in interest, $3k in mainten
: an
: : ce, $5k in fuel, and $4k for insurance- my cost is $32k.
: I
: : would be lucky still to sell this car after 10 years fo
: r
: : $4k (the value). If it turns out to be rare and desireab
: le
: : , I might be able to sell it for $30k. Even then its val
: ue
: : is less than my cost.
:
: You can?t include the operating costs into this equation,
: can you?
:
: : And then there is the time value of money... Oy! I have
: a
: : headache already...
:
: Yes, time value of money, I guess that it was a concern in
: the seventies and eighties with something like 10 % per y
: ear but possibly not a problem.
: In 1978 our flying club bought a nearly new glider and pay
: ed SEK 85,000. In 1997 it was sold for SEK 165,000.
: During that time swedish CPI went from 198 to 624 which wo
: uld bring our glider to SEK 268,000.
: I?m willing to accept that for wear and tear during twenty
: years ......
:
:
:
: Christer

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