Looking for advice, is the career change worth it? Should I take out loans or not?

[alicoobasta]

Firstly, thank you to this community for your advice and perspective. It’s a continued pleasure to be able to read and learn from the experience of this community. Following are my current positions:

——— Equity ———

Edward Jones: $64k

HYSA: $123k

Schwab: $10k

401K: $13k

Investment Property: $181k

——— Debt ———

Corolla: $13k

Investment Property: $153k

33M

Current Salary: $110k w/ add’l ~$18k comp. ($128k more or less)

Rent: $3820 (NYC)

Other Bills: ~$1k

I feel a little behind. I could've saved much more, but I've been pursuing work skills more than money for a few years. Also, I didn't get a handle of my career path until I was 26-27 y/o.

The main reason for asking for your perspective is as follows:

I'm considering a career change in the near future. I've found a love for flying and have seen so many people commenting on how rewarding and well-paying that career can be. So far, I've accumulated enough hours for a PPL and have flown for about 9 months now. This hobby and career is very expensive and continuing to fly has led me to be saving much less than I previously was. I've spent ~$15k in the past 9 months, and I'm looking at a continued expenditure of much more than that if I pursue this career.

From a financial perspective, what would you say is the best path forward? Is it best to quit the day job, focus on flying, take out some loans for the schooling and move towards this career at full speed? Or continue to spend 100% of my income (perhaps a little more) and leave my equity positions to grow? I've heard and researched the cost of getting a commercial pilots license, and it seems to be ~$100k, which I could pay for out of pocket. But it's taken so long to accumulate the cash on hand that I have, I'd hate to lose that position for a career change.

Thank you all for your input! Also, any added tips would be great. I've found a few friends who I can talk to about money things, but I've found it to be a difficult topic to discuss with parents or my social circle.

 

[paloma_91]

@alicoobasta Why do you owe money on the Corolla while you have $123k in a savings account? Just pay that off. But good job choosing an inexpensive car when you can afford an expensive one. That is a very good financial move. Need to know your age to give best financial advice. I think you have too much in the HYSA and not enough invested in stock index funds. For now that isn’t too bad because rates are 5%+. But you should probably dollar cost average into stock funds over a couple of years.

 

[alicoobasta]

@paloma_91 I've had the same thought, but the Corolla is at 2.9% and the HYSA is at 5%. Not that much of a difference and the debt doesn't keep me up at night. I'm 33M living in NYC.

 

[paloma_91]

@alicoobasta It is probably pretty close at those rates and you are likely getting a small benefit from your strategy. Don’t forget the effect of taxes. At your income you are probably paying a tax rate of around 20% federal. I don’t know the state tax rate in NY, but I know it isn’t zero. A 5% HYSA neta more like 3.5-3.7% after taxes. That is stilll ok for now but if rates come down a bit as is expected in the next 6-12 months the equation may flip.

 

[tabbycat11]

@alicoobasta Don't be so hard on yourself, you're in better shape than most. Financially speaking it seems like your career is beginning to print - your investment in 'pursuing work skills' is paying off. Are you sure you'd get the same joy from your hobby if you were doing it to support yourself? Not much more to add other than that rent is insane lol.

 

[alicoobasta]

@tabbycat11 Thanks for the insights! Haha my career is in construction, safety specifically. It’s been about 5 years of training to get to where I am. Still seems like such a small salary when compared to what I see in the aviation industry. You are right though, maybe the hobby should be left as a hobby.

And NY rents are crazy!

 

[tabbycat11]

@alicoobasta You know best, but I feel like there could be a high ceiling in your field that still would allow some free time for hobbies. An unspoken truth about a lot of these trade-esque jobs is a 60+ hour workweek.

Yea I'm sure that's pretty average for NY... Separate topic but might be worth trying to optimize your rent expenditure, a bit of savings there could = your annual flying budget