How Much Does it Really Cost to Fly Private?

"I have $60 million and I still fly coach. I can barely see the value in flying first class." That's what founder Josh Payne told us in a previous episode.

Meanwhile, Andrew Wilkinson spends "$15 grand to charter a plane to San Francisco for the night" and Nick Cooper bought a quarter share of a Vision Jet for $900,000 despite being "super frugal." Then there's Oscar, writing a check for $49 million for his family jet without blinking.

So when exactly are you "rich enough" to justify private aviation? Is it a net worth threshold, an income level, or something else entirely?

We spoke to Preston Holland in this week's episode of Moneywise to solve this riddle once and for all. Known as "the private jet guy" on Twitter, Preston is an aviation finance expert who brings hard numbers and clear benchmarks to a topic often shrouded in mystery and misconceptions.

Preston breaks down the costs, ownership models, and financial thresholds for private aviation, and then I, your humble host, pick it all apart.

We also went deep on: when it makes financial sense to fly private, which jet is right for which lifestyle, and the surprising truth about trying to "house hack" a private jet.

Below you'll find my summary of the episode along with the entire transcript.

And by the way...this podcast, the concept of it came from Hampton, a private community for founders doing at least $3M+ in annual revenue. It was created because most of our peers felt like they were on an island alone when it came to their finances, and they wanted peers to bounce ideas off. This is why Hampton started hosting small dinners and weekends at amazing venues like Blackberry Farm, and now we host 100+ events a year globally. The podcast is a way for people to hear the discussions that happen behind closed doors—which is why we're so transparent about numbers.If you're a CEO, founder, or business owner, check this out. New Moneywise episodes come out weekly.

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Now, below are the notes and the full transcript.

The Numbers

• Financial threshold for regular chartering: $2M in net income and $20M net worth
• Vision Jet (what Nick Cooper owns): $900,000 for 1/4 ownership, $1,000/hour operating cost
• Entry-level used very light jet: $1.5M purchase price
• Brand new fully-optioned very light jet: $5.5M
• Hourly operating costs for very light jets: $1,200-$2,500/hour
• Super midsize jet (first that can fly NY to LA): $6M-$25M
• Large cabin jets (like what celebrities use): $5M-$60M
• Ultra long-range jets (G700): $75M for a new one
• Annual insurance costs: $30,000-$50,000+
• Monthly hangar costs: $2,000-$20,000 depending on location and aircraft size
• Pilot type rating training: $20,000-$70,000 per pilot
• Oscar's family jet: $49M purchase price, approximately $15,000/hour all-in operating cost

When It Makes Financial Sense to Fly Private

Preston Holland has a clear benchmark for when chartering private jets starts making financial sense: "$2 million in net income and a $20 million net worth." This figure came from surveying his newsletter readers, with responses ranging from $1M-$10M income and $10M-$30M net worth, but the median consistently landed at $2M/$20M.

This financial threshold isn't a hard rule, however. Josh Payne, worth about $60 million, still flies coach for domestic travel, saying "The only thing that we can't have today, I say, is flying private... You could do it like once a year. But I still fly coach unless it's international. I can barely see the value in flying first."

Preston emphasizes that chartering is "the gateway drug to private aviation" and "the least committal way" to enter the market. While it's the most expensive on a per-hour basis (around $10,000/hour for a super mid aircraft like a Challenger 300), it requires no upfront capital investment or ongoing fixed costs.

The Private Aviation Spectrum: From Chartering to Ownership

Private aviation options exist on a spectrum of commitment and cost, with several key options available:

1. Chartering: Pay-as-you-go model with no ownership commitment. As Preston explains, "It's as simple as calling somebody. I need to go from point A to point B and get me there in this time frame. And they say, here's the price." This is how Andrew Wilkinson flies, saying, "I wouldn't do this trip otherwise... But if it's someone interesting enough, I'll spend the $15 grand or whatever to charter a plane to fly to San Francisco for the night."

2. Fractional Ownership: Programs like NetJets, Flexjet, and AirShare where "you buy a sliver and you're getting a membership into a larger fleet pool of airplanes." This option provides "90% of the benefits of ownership" without the headaches of maintenance, hiring pilots, or scheduling. Scott Galloway switched to this model after finding full ownership too cumbersome: "I just went fractional."

3. Co-Ownership: Sharing a plane with friends or partners, splitting all costs. Preston cautions, "If you're going to have an airplane partner, you need to be pickier about your airplane partner than your spouse." Nick Cooper uses this model, owning a quarter share of a Vision Jet for $900,000.

4. Full Ownership: Complete control but with all the responsibilities. Oscar, a billionaire guest, owns a $49 million jet that seats 13 passengers and can fly from the central US to London. He pays all expenses outright: "You got to pay for pilots and you got to pay to put it in a hangar, and you got to pay insurance... I think the most expensive thing is fuel and the pilots."

Preston notes a surprising trend: "There's actually this move to fractional from people who own entire aircraft and who fly enough to own entire aircraft, but are tired of dealing with the pilots. They're just like, 'I just want to pay a monthly bill and it's over.'"

Aircraft Size and Purpose: From Vision Jets to Gulfstreams

The aviation market spans a wide range of aircraft sizes and capabilities:

Single-Engine Turboprops: Entry-level private aviation, seating 6 people.

PC-12: Called "the turbine suburban," it can seat 8 people, land on grass, and carry lots of equipment.

King Air: Multi-engine turboprop, seats 8, not very fast but efficient.

Very Light Jets: Including the Vision Jet (what Nick Cooper owns), Honda Jet, Citation M2, and Phenom 100. These have 1,000-mile range, cost $1.5M-$5.5M new, and operate at $1,200-$2,500/hour.

Light Jets: Like the Phenom 300, with longer range and spacier cabins.

Midsize Jets: Such as Citation XLS, priced between $3M-$10M.

Super Midsize Jets: First class that can fly New York to LA nonstop, priced $6M-$25M.

Large Cabin Jets: What most people picture when thinking "private jet" (Challenger 650), priced $5M-$60M. Preston notes, "This is State Farm, this is Pepsi, this is Coca-Cola, this is like Kim Kardashian."

Ultra Long Range Jets: Top-tier aircraft like the G700, priced at $75M new. "This is the big ballers," Preston says, noting they represent only "5% to 10% of the market, but it gets 100% of the mindshare, 100% of the media coverage."

Who Should Consider Private Aviation?

Preston identifies several personas who benefit most from private aviation:

1. Rural/Tertiary City Dwellers: "I live in Chattanooga, Tennessee. Chattanooga has terrible airline service... I have to connect through Atlanta if I want to go anywhere. So I add four hours to every trip."

2. Manufacturing Business Owners: "The nature of manufacturing is that there is a just-in-time component. And every time there's a shutdown, you really need that plant back up and running... If your plant goes down, it's costing you $5 million per hour."

3. Regional Franchise Owners: Those with multiple physical locations in different cities.

4. Real Estate Investors: "Because real estate has a physical component... if there's a physical component to your business, private aviation probably would accelerate it."

5. Post-Monetary Founders: "I know a lot of founders that are that way, that they're like, look, this makes absolutely no sense for my business or whatever I'm doing now. But I worked really hard and so therefore I'm going to enjoy it."

Nick Cooper, despite being "super frugal and analytical," justifies co-owning a jet because: "I'm an hour and 45 minutes in traffic from the Atlanta airport, and then it's an hour to get through security... I have business in rural towns all over America with my storage facility. My family's in a rural town in southern Indiana. My wife's family is in a rural town in upstate New York."

The Hidden Costs and Realities of Private Aviation

Preston dispels several myths about private aviation:

Depreciation is Real: "This is a depreciating asset... If you buy something for $1 million and you sell it five years later for $500,000, there is like $100,000 worth of cost in there."

The "House Hack" Myth: "You cannot house hack a jet and fly for free. You cannot buy the airplane and then fly it for free because you can charter it so many times... The minute that you have a $500,000 repair bill, all of a sudden a lot of your free flying just got eaten up."

Hidden Costs:

• Hangar space: $2,000-$20,000 monthly
• De-icing: Up to $10,000 unexpectedly
• Insurance: $30,000-$50,000 annually
• Pilot training: $20,000-$70,000 per pilot for type ratings

Oscar, a billionaire, owns his jet outright: "We got a family jet that's pretty expensive... 49 million is a pretty good chunk of change for it... I'm private, I don't have a company so I can't depreciate it and I can't write it off. So it's just a dead expense."

Time: The Ultimate Luxury

The most compelling case for private aviation is time savings. Preston shares a personal example: "We went from Chattanooga, Tennessee to Bentonville, Arkansas. I dropped my daughter off at preschool, went to the airport, spent eight hours in Bentonville, Arkansas, and was back home to give her a bath that evening... It took a three-day travel experience and compressed it between kid drop off and kid bath time. And that part is what you cannot quantify."

This time-saving aspect resonates with many successful founders, though Jackie Lamport (the podcast host) offers an interesting counterpoint about the value of patience: "Patience is a very valuable skill, but it's also a skill that I think needs to be continuously practiced... It's the people who can wait it out through that period. Patience is a really valuable skill."

Other Key Quotes

"When I say fractional, I mean Netjets Flexjet air share the big players that offer you buy a sliver and you're getting a membership into a larger fleet pool of airplanes." - Preston Holland

"The big thing that I started doing that was expensive and silly was flying private. That's one of the only like, rich people things that I think is actually worth the money." - Andrew Wilkinson

"There's a crossover of fintech founders with flying their own planes, and I like could not tell you like what the direct correlation is, but it's like there's a there's a fintech overlap." - Preston Holland

"If you are ignorant and I guarantee you that you are in some way, shape or form, you're ignorant about something. There are people that are out there that will take advantage of you. Be on the lookout. The dollars are big, so therefore there's a lot of people that come out of the woodwork that are not exactly A+ characters." - Preston Holland

"I've always been someone who hates traveling, and there's something just so magical about just rolling up and getting on a plane and going." - Andrew Wilkinson

Links You Might Like

• Preston Holland's Twitter
• Preston Holland's Website

Full Transcript

[00:00:08] Jackie Lamport: When we interviewed Andrew Wilkinson, he told us this.

[00:00:11] Andrew Wilkinson: The big thing that I started doing that was expensive and silly was flying private. That's one of the only like, rich people things that I think is actually worth the money.

[00:00:20] Jackie Lamport: Now, it may be because of the 2001 cinema classic Josie and the Pussycats, or maybe another piece of media that isn't only remembered by 30 year old woman, but when people think of flying private, they typically think of big, lavish and expensive. Although when Nick Cooper talked about his plane. Listen to this.

[00:00:36] Nick Cooper: It barely holds my family.

[00:00:37] Jackie Lamport: That made me think that flying private isn't exactly a one size fits all. Which is exactly what the private jet guy on Twitter told me. He's an expert, and he also goes by his real name, which is Preston Holland. In this episode, he's going to tell us about the different ways you can fly private, the different costs, and at what net worth and income. It's right for who. We'll also analyze some of our past guests flying habits, such as Brian Johnson and Scott Galloway. And yes, I'm currently at an airport, and as much as I would like to say that was for the bit, I actually just already had to be here. I'm going to interview Preston online, so let's go. I'm Jackie Lamport and this is Moneywise, a show not about how to get rich, but about what happens after you do. I'm the producer of the show, and because I've spoken to so many of our guests individually, every now and then, I'm going to come in and do an episode like this where I bring together all of the differing ideas and the common thoughts on one specific topic, and also give a little bit of my opinion as an outsider. By the way, this show was made for Hampton, the privately vetted community for high net worth founders founded by Sam Parr. And you can check that out. Join Hampton. Com we'll talk about it a little bit more in a bit. All right. So there are two parallel spectrums to consider. The first is the type of ownership. And the second is the type and size of the plane. What makes sense for whom comes down to roughly three things cost, lifestyle, and location. We'll start by talking about the types of ownership beginning with the first option, which is not owning at all.

[00:02:11] Preston Holland: So chartering is the gateway drug to private aviation. It's the least committal way. It is as simple as calling somebody. I need to go from point A to point B and get me there in this time frame. And they say, here's the price. You say, sounds good. You sign up, go on a per hour basis. It's the most expensive way to fly if you're just using per hour as your metric. So let's say a super mid aircraft like a challenger 300 is going to be around $10,000 per hour to charter, let's say just using kind of target holistic numbers. If you owned it, your direct operating costs in that aircraft are going to be $5,000 an hour, give or take some. But you also have to pay for hangar, you have to pay for pilots, you have to pay for insurance. You have to pay for all of that. So if you took your total fixed cost and spread it out across the amount of hours that you fly, you really need to fly about 150 to 200 hours per year for it to start to make sense, to own your own aircraft.

[00:03:12] Jackie Lamport: This is actually the way that Andrew Wilkinson flies.

[00:03:14] Andrew Wilkinson: I've always been someone who hates traveling, and there's something just so magical about just rolling up and getting on a plane and going. And the way I thought about it was, you know what? I wouldn't do this trip otherwise. Like, it's such a pain in the ass to go on a trip just to meet one person or something. But if it's someone interesting enough, I'll spend the, you know, 15 grand or whatever to charter a plane to fly to San Francisco for the night. And I'll go have dinner with someone amazing. And I found that it really paid off.

[00:03:44] Jackie Lamport: Okay, so thinking about finances, at what point does it start to make financial sense to charter?

[00:03:51] Preston Holland: I took a very non scientific survey of the readers of my newsletter. Essentially everybody came back with a very similar answer. It's $2 million in net income and a $20 million net worth. At that point, you start chartering pretty often. So that's kind of the like the threshold. Now, some were 1,000,010, some were 3,000,030. But the median mode mean was $2 million in net income. That's to you kind of in your pocket and $20 million net worth. Now it's time to start chartering more regularly.

[00:04:28] Jackie Lamport: But I guess it's all mindset really, because Josh Payne is worth about $60 million and well, listen to what he said.

[00:04:35] Josh Payne: The only thing that we can't have today, I say, is flying private.

[00:04:39] Sam Parr: You don't think that's enough to fly private?

[00:04:41] Josh Payne: No, I don't think so. I mean, I mean, look, you could do it once. You could do it like once a year. But, I mean, I mean, I don't know. That's just how. That's just. It just feels like an. Oh, you know what, I don't know. You probably didn't see this post. I created a new post and reposted your post about your poor kid habits, and my answer was that I still fly coach. Unless it's international. I can barely see the value in flying first.

[00:05:06] Jackie Lamport: Leveling up from chartering. We have fractional ownership.

[00:05:09] Preston Holland: When I say fractional, I mean Netjets Flexjet air share the big players that offer you buy a sliver and you're getting a membership into a larger fleet pool of airplanes. It is less capital intensive up front on a per hour basis. It's a little bit more than flying, but when you blend it all the way down, it usually comes out slightly more expensive to break even depending on how much you're flying. The thing about fractional is, is that you don't have to worry about anything. You don't have to hire pilots. You don't have to do insurance. You don't have to rent a hangar. You don't have to figure out if your pilots are going to go on vacation. How are you figuring out how to get somebody to backfill for them? You're really getting 90% of the benefits of ownership. You're also getting some tax benefits, right? So you're buying a portion of the airplane. You're depreciating on your tax schedule, but you're not having to deal with a lot of the headache. The traditional wisdom says that, oh yeah, you fly fractional until you fly 150 hours a year, and then you move into whole aircraft ownership because you're blended cost is lower. What we're seeing is that that's becoming less and less true over time, is that there's actually this move to fractional from people who own entire aircraft and who fly enough to own entire aircraft, but are tired of dealing with the pilots. They're just like, I just want to pay a monthly bill and it's over. And I get my, you know, private flying in, and then it's more approachable than whole aircraft ownership when you're looking at kind of make model specific information like, let's say you buy one eighth of a challenger 3500, you're not going to be spending the $2,830 million list price of buying a new one. But you get access to a new fleet and you're buying an eighth of it, right? So you're only out a couple of million dollars up front, and then, you know, your shared portion of the total expenses per month.

[00:07:02] Jackie Lamport: At this point, you'd think we'd get to full ownership, but we're not quite there yet. There's another option that Preston sees people take, and it's not something that he would recommend enthusiastically.

[00:07:12] Preston Holland: The other option is co-ownership, where I own it, and two other friends also own the airplane. We split everything 33%, which also means that if we both want to fly on Thanksgiving, one of us can go and the other cannot.

[00:07:27] Jackie Lamport: Yeah, that sounds like a way to start fighting with your friends a lot if you're doing it that way.

[00:07:31] Preston Holland: I tell people, if you're going to have an airplane partner, you need to be pickier about your airplane partner than your spouse. Yeah. So you need to make sure that your interests are aligned and that everybody is being copacetic and everybody is happy in their relationship, or you have so much money that you just don't care.

[00:07:52] Jackie Lamport: If you are flying often enough and you have enough money to justify it, then owning a plane outright might be the best option for you. However, here the price range gets pretty big, so we're going to shift to that spectrum. Obviously, there are things that exist outside of the spectrum, but Preston has put together a pretty definitive beginning and end for the sake of this conversation. Before we get into the further pros and cons and costs of owning a plane. Let's get that overview.

[00:08:19] Preston Holland: On the very, very bottom end. You have a single engine turboprop. The definition of a turboprop is. It is a jet engine that turns a propeller that's going to seat six people. There's multiple brands. There's multiple models in that category. Moving up in the single engine turboprop, you have what's called a PC 12 very popular aircraft for regional travel. It can haul a lot of stuff and is not very fast, but it's kind of this. They call it the turbine suburban. You can seat eight people in the back comfortably. You can load it to the gills with ski gear or golf gear or whatever, and kind of go wherever it can land on grass. It's really versatile. You then have multi-engine turboprop, which is the King Air is the most popular version. If you're familiar with Wheels Up, if you watch College GameDay and you see them fly in the pickers back in the day, they would fly. King airs. It's two turboprop engines. You can see eight people in the middle. Not very fast, but can go, you know, a relatively long way and is efficient from a cost perspective. When you get into the jet world, you have the very light jet, which is the bottom end. That's going to be your vision. Jets is in a class of its own, which is what Nick owns. And then you have multi-engine, very light jets. You have the Honda Jet, you have the citation M2, you have the phenom 100. Those are going to be, you know, short range. You're talking thousand ish nautical miles.

[00:09:42] Preston Holland: You can get up to 41,000ft so you can get over some weather. It is truly a jet, but it's typically going to sit 4 to 6 people in the back, two people up front. But it's going to give you that true jet feel. It's kind of the first entry into like what you would consider jet purchase price on something like that. You're looking at your jet in price on a Beechcraft Premier one for about a million and a half dollars, and you're kind of going to top out in that range. Brand new delivery, fully optioned at around 5.5 million. And your effective hourly cost is going to be somewhere between 1200 on the vision jet, to call it $2,500 an hour on kind of your traditional light jets. Very light jets moving up. You have light jets, phenom 300, things like that. Those are going to be have a little bit longer range. They're going to be a little bit spacier cabin. They're going to be comfortable, really popular in places like Texas because from Texas you can get all four corners of the US. You're not going to get Miami to LA, but you're going to be able to get relatively far. Moving up, you have the midsize jet, which is citation xls flying things like Netjets or Vistajet. You know, you can charter them, you can buy them, get in price on those is going to be 3 million. Kind of you're going to top out around ten from midsize. You're going to get to super midsize jet, which is very creative right.

[00:11:03] Preston Holland: It's like large and extra large, right? It's like an extra extra large. Super mid is the first time that you're going to be able to get New York to LA. That is the first kind of cabin class cabin size get in price purchase wise. 6 million bucks kind of. You're going to top out at like 22 for like a brand new 25 brand new delivery super midsize jet. You can charter those. You can buy Fractionals. There's lots of ways to fly them, but that's kind of if you're going to own one, then you get into large cabin. That's going to be challenger 650. When you start thinking private jet, that is what you're thinking about. You're getting prices like $5 million on the very, very low end. And you're moving up into like 50, $60 million. This is State Farm, this is Pepsi, this is Coca-Cola. This is like Kim Kardashian. Those types of people start moving into the large cabin jets from large cabin. You have ultra long range. Ultra long range. You're your brand new get in price for a G700 is 75 million bucks. This is the big ballers. But like notice we've talked about all of these other significantly quote unquote more affordable and approachable aircraft. Before we get to that. And when you look at a percentage of the market, the ultra long range jet is likely 5% to 10% of the market, but it gets 100% of the mindshare, 100% of the media coverage.

[00:12:27] Jackie Lamport: Okay, that's a lot of information. And it means that there's a lot to think about. But budget and time in the air, that's only the first layer. Other things that you should be considering are where you live, your use case, safety. Do you get motion sickness that matters a lot? We're going to cover all those things. But let's start with the big item, which is what is it actually like to own a plane. Aside from our guests agreeing that luxury flying is well worth the money, another common sentiment that I hear is that owning stuff actually kind of sucks, because the more you own, the more you have to be responsible for, and sometimes the effort of that responsibility isn't worth the value of the thing. Planes, as you may have already guessed, are a bit of a pain to own. And that's exactly why Scott Galloway told us he doesn't own one anymore.

[00:13:13] Scott Galloway: My dad used to take me to Orange County Airport when I was a kid, before there was even security. It was like a restaurant on a runway, and I got very into aviation, and I can still look up in the sky and tell you what kind of plane it is. And I've always had an obsession with aviation. I'm sure there's something crazy you bought because you just always wanted that thing. For me, it was a plane, did it for three years, realized what a hassle it is, hiring and firing pilots and health care and maintenance. And I just went fractional.

[00:13:39] Jackie Lamport: The pilot thing is, big planes can't fly themselves. Here's how that works.

[00:13:43] Preston Holland: There's different licenses, similar to truck drivers, right? You and I can't just jump in a truck and drive it. You kind of have to build up. There's what's called a commercial pilot's license, which is the licensure with the FAA that says that you are able to be paid to fly. That is what the commercial pilot's license. And then for jet, specifically, you have to be type rated in that specific make model of aircraft. So you have to go through training. And that can be anywhere from two weeks to a month of intense training for pilots so that they know everything about that airplane and their systems, where every button is and things like that. So from a when you're hiring pilots, you want to make sure, like if you can hire a pilot and them not be typed, but you're going to have to pay for them to go to type school. And that can be anywhere from 20 to $70,000.

[00:14:34] Jackie Lamport: And then do you see most people just have like ongoing relationships with pilots or do they you hire a couple or so.

[00:14:40] Preston Holland: It's a blend of some. What some people choose to do is they will have pilots on staff. So just like any other employee. So you have somebody who runs HR, you have somebody who runs finance and you have someone who runs the airplane, right? So like literally an airplane manager. And then they will have pilots that work up underneath them and kind of a reporting structure. Others will do contract pilots. So they will just pay them a day rate for the day that they fly on the airplane. It depends on how much flying you're doing will depend on which one makes more sense.

[00:15:13] Jackie Lamport: Of course, you could just fly it yourself. That's what Jess Ma did. And it's also what Bryan Johnson did for a little bit until the novelty wore off.

[00:15:22] Bryan Johnson: The only thing I did is I bought a jet. I learned how to fly an airplane. Um, in the preceding years. I had a little prop plane that I had a little small jet, so I bought a jet.

[00:15:31] Sam Parr: I mean, that's a great purchase. And do you still fly that?

[00:15:34] Bryan Johnson: I sold it during Covid.

[00:15:35] Jackie Lamport: I asked Preston about that. And it turns out that entrepreneurs flying their own planes is far more common than you'd expect, or exactly as common as you'd expect if you've met a lot of entrepreneurs. But interestingly, in Preston's experience, it is more prevalent in one specific niche.

[00:15:50] Preston Holland: There's a crossover of fintech founders with flying their own planes, and I like could not tell you like what the direct correlation is, but it's like there's a there's a fintech overlap. It would be the same as asking how many entrepreneurs and founders drive motorcycles, because statistically driving motorcycles is incredibly dangerous. And if you asked how many of them drive motorcycles, right. Like it's probably pretty high, right? It is not like the world's safest activity to fly yourself, but it's also not, like inherently incredibly dangerous. And there's there's constantly constant evolution of training and safety that is making pilots safer and airplanes safer. Flying for yourself. My business is aviation finance, so we finance people's airplanes. And I find this direct correlation between your stereotypical like driven Ribbon founder who's really wanting to build and flying themselves privately like it takes a lot of the same hard skills, right? Like attention to detail, you know, insane amount of focus, ability to take complex situations and distill them down into simple principles, remembering checklists, being incredibly retentive about, like, every little thing about the airplane and operating the airplane. That oftentimes correlates to how they act in business.

[00:17:14] Jackie Lamport: The motorcycle thing actually made me laugh a little bit when he said that, because there have been multiple instances when I've had to get Sam back on topic in an interview because him and his guests have gone off just talking about motorcycles. Like way off topic. So yeah, that's kind of funny. Those conversations can be really interesting and super valuable. They don't always have to be about the finances or the business. And I think you see where I'm going with this joint. Hampton. Hampton is the reason that this podcast exists, not only because they make it and, you know, we talk about it, but because they want to reach other founders who need this kind of community. And the community is full of entrepreneurs, people who have those similar mindsets, people who might be inclined to fly a plane while all your other friends on your soccer team or whatever are saying, what are you talking about? That's dumb and you're reckless. It's important to have the community of founders who you can talk to and relate to. And we talk about Hampton not only because they make this podcast, and obviously that's why we're here. It's because they want to reach you. They want to reach founders who need this kind of community, because it's built by founders who have benefited from it and created it because they wanted it. And the cool thing is that it's not just like connecting people online, like via whatever chats, which there is an element of that, but a lot of it is in person too.

[00:18:30] Jackie Lamport: So you can actually meet up with these people at houses, at resorts, at different events, in person, seeing people in the flesh, maybe taking plane lessons together, I don't know, but this kind of stuff is all happening at Hampton. If you are a founder who's doing at least 3 million IRR, you should go check it out at Join hampton.com. So if you are founder doing at least 3 million IRR, you should definitely check it out because it's a super valuable resource for not just the community aspect and the social aspect, but also because you can get advice for things that are relevant to your business or your personal finances. All of that stuff from people who are in similar situations in person. So that's join hampton.com. And also every person who signs up, you're guaranteeing that this podcast continues to be made for the people who maybe aren't ready to join, but are really finding it valuable and will be there eventually. So join hampton.com. But anyway, back to the show. No matter if you fly your own plane or if you have pilots, there's going to be different costs associated with each. Something that you will have to always consider is insurance.

[00:19:31] Preston Holland: It's like between 30 and $50,000 per year. And it really depends on how big of an airplane you have. And it can go up from there and it can go not very far down from there.

[00:19:41] Jackie Lamport: Okay. And then what about other hidden costs that people might not be expecting?

[00:19:46] Preston Holland: So your hangar rent is something to be aware of if you're in a major metropolitan area. If you can get hangar space in the first place, you can be spending anywhere from $2,000 a month to $20,000 a month. And depending on the size of airplane, it depends on, you know, where you're keeping it. Like if you're in Teterboro and you fly a big airplane, like you're spending a ton of money per month. That's another hidden cost. If you find to a place where there is de-icing, that's required. So if you fly in and it's really cold, you get sprayed with this stuff. Right. Business jets have to be sprayed with the stuff too. I mean, that can be a $10,000 bill that you weren't expecting. Um, just because you flew into, like, a cold area in Toronto. Yeah. Toronto. Yeah. Anywhere above the Mason-Dixon, basically. And even in Atlanta. Three times a year. Right. So you want to, you know, you want to be aware of that. Depreciation, like real depreciation is something that a lot of people don't think about. This is a depreciating asset. I talked to so many people that are real estate and they're like, oh yeah, like it's great. Like I'm going to underwrite as though it's going up the price of your airplane barring during Covid. And no other time in history did your airplane value go up over time as opposed to down over time. So if you buy something for $1 million and you sell it five years later for $500,000, there is like $100,000 worth of cost in there. Yes, there is the tax depreciation, which is a tax haven. It's a tax strategy. There is also the real cost of the degradation in value that you have to consider when you're buying something, which is why when when you're buying something, you want to make sure you buy it at the right price so that your residual value is held as strongly as possible compared to like if you overpay, right, you're going to you're going to get hit with that when you go to sell the airplane.

[00:21:36] Jackie Lamport: Here's a PSA from Preston on that depreciating asset. Note, even if you can write it off as a business expense and you get some good tax benefits or whatever, no matter what any online grifter tells you, a plane will always be a loss.

[00:21:49] Preston Holland: You cannot house hack a jet and fly for free. You cannot buy the airplane and then fly it for free because you can charter it so many times. There's a couple of people on Instagram that try and tell you that you can, but I will tell you this the minute that you have a $500,000 repair bill, all of a sudden a lot of your free flying just got eaten up because you've flown the airplane 700 hours a year, and they're really not designed to fly that much. So you cannot offset your entire cost of ownership and your entire cost of flying with charging your aircraft. It's mathematically impossible. Now that we've established that that is the case, you can offset some of your fixed cost with a certain amount of chartering, but you're never going to make money owning an airplane. Over the long run, you will lose money. And anybody who's out there who's telling you that you can make money doesn't know how to do math.

[00:22:47] Jackie Lamport: I feel like I spent the last five minutes convincing you not to own a plane. But there are a ton of people who do own planes, and they love it. And here's who they are. According to Preston.

[00:22:56] Preston Holland: So one persona is and this is a much bigger persona than a lot of people understand is the person who lives in a rural tertiary city. So I'll give you an example. I live in Chattanooga, Tennessee. Chattanooga, Tennessee has terrible airline service. People say, oh, why don't you just fly the airline? Well, because I have to connect through Atlanta if I want to go anywhere. So I add four hours to every trip. So tertiary cities, people who work in manufacturing, because manufacturing tends to happen in tertiary cities for the purpose that labor is cheap. And the nature of manufacturing is that there is a just in time component. And every time there's a shutdown, you really need that plant back up and running. So if your Volkswagen and your plant goes down, it's costing you $5 million per hour. So the cost is whatever the cost is of the private jet. To move your engineers to get there is like so low compared to the cost of like, downtime. So that's a big one. Regional franchise owners is a big one. So people with physical brick and mortar locations, it's not as big with e-commerce. Like if you're an internet person, if you're an internet business, you don't really have a use to go somewhere for business, and you can have a really good business. But you should just probably fly business class, because you probably live in New York City and you can get wherever you want to direct. So why would you why would you bother with private aviation? Big in real estate? Because real estate has a physical component, I would say. Like if you own a business, if there's a physical component to your business, private aviation probably would accelerate it. Or the other archetype is post-monetary founders who say, look, I made my money. I want to now enjoy it and I'm going to spend it on flying private. I know a lot of founders that are that way that they're like, look, this makes absolutely no sense for my business or whatever I'm doing now. But I worked really hard and so therefore I'm going to enjoy it.

[00:24:57] Jackie Lamport: We started this episode by referencing Nick Huber, and he is a super frugal and analytical guy. However, he justifies co-owning a jet. He actually fits into a couple of the personas that Preston just mentioned.

[00:25:09] Nick Cooper: I'm an hour and 45 minutes in traffic from the Atlanta airport, and then it's an hour to get through security and get to my gate in the largest airport in the world. And I have business in rural towns all over America with my storage facility. My family's in a rural town in southern Indiana. My wife's family is in a rural town in upstate New York. I did the math of, hey, I can buy one fourth share of a jet that can fly my family around for. And look, this is. I say, jet. It's a vision jet. It's smaller than most turboprops. It's more affordable than most turboprops. I bought a one fourth share of this airplane for $900,000, and it's only $1,000 an hour to fly the airplane. So I can get round trip to Indiana to Bristol, Virginia, where one of my properties is. And it's I'm going to get a 3 or $4000 bill.

[00:25:54] Jackie Lamport: The other benefit is time. Time is the single most valuable thing you can buy according to a lot of our guests. But travel time is an easy target, and if you own your own jet, you can save a lot of it.

[00:26:07] Preston Holland: We spent a day. We went from Chattanooga, Tennessee to Bentonville, Arkansas. I dropped my daughter off at preschool, went to the airport, spent eight hours in Bentonville, Arkansas, and was back home to give her a bath that evening, same evening. So I dropped her off at school and I gave her a bath. And I spent eight hours in a city Tuesday, or a full state away that was like, would have been to get there commercially would have been an eight hour ordeal the night before. Spend the night in a hotel, do the eight hours and maybe get back by 1 a.m. or the next morning if I was lucky. So it took a three day travel experience into between kid drop off and kid bath time. And that part is what you cannot quantify.

[00:26:56] Jackie Lamport: The time thing actually comes up a lot in the show, and it's something that I want to push back on a little bit. Patience is a very valuable skill, but it's also a skill that I think needs to be continuously practiced. There's this really interesting juxtaposition that I've noticed in founders in the past year and a half working on the show. It's that there's this action oriented mindset and this eagerness that propels them forward. That's a plain pun for you, but at the same time, the patience through the slow build, the downturns, the rough times, that's what ultimately leads to the payoff. It's the people who can wait it out through that period. Patience is a really valuable skill, and I think that being cognizant of the necessity of continuously practicing that skill is something that you really have to think about before you get caught up in the possibilities of being able to buy back your time. And I mentioned the payoff of an exit or business success, but I actually don't think that the skill is only valuable with the promise of a reward. In fact, I think it's just an incredibly important part of being a good person overall. That's not to say that you need to fly economy or wait in long lines to be a good person, but it is something to think about. Perhaps the next time you fly economy or wait in long lines. On a completely different note, if you are considering buying a plane and you get motion sickness, it might be a go big or go home situation.

[00:28:18] Preston Holland: So let's say a Cirrus Sr22 is like everybody. Every entrepreneur that dreams of flying themselves tends to want to fly the Cirrus Sr22 at some point in their flying career. It has a parachute. They just came out with an autoland button. So in the event that the pilot becomes incapacitated, you push a button and it'll land for you safely on the nearest runway. They are so much more subject to turbulence than big aircraft are, and that is a function of weight versus turbulence, right? So the lighter weight your aircraft is, the more generally speaking, there's some other aerodynamic features that will play into this. But generally speaking weight has a direct correlation inverse correlation to turbulence. So if you're in a small airplane and the wind blows right, it's like it would be like, hey, I'm going to use this piece of paper and this piece of cardboard and then this cinderblock. Right. Like which one's going to be affected by the one more. Right. The piece of paper less than the piece of cardboard, but the piece of cardboard is still going to blow. And the cinder blocks not right unless it's really windy. And then it's really going to pick that cinder block up. So it's like it's similar kind of scenario with airplanes.

[00:29:28] Jackie Lamport: As someone who gets motion sickness, I can confirm that it sucks. I did a city plane tour one time. And just like one of those little small planes. And I hated every second of it. But it doesn't matter because I can't afford it yet. Big or small. But someone who can afford the big Jets is one of our past guests, Oscar. And he can afford it because he's a billionaire. He broke down what it costs him.

[00:29:50] Oscar: We got a family jet that's pretty expensive.

[00:29:53] Harry Morton: Can you share? The cost of that.

[00:29:56] Oscar: Is 49 million is a pretty good chunk of change for it. I let my kids use it all the time, and we use it all the time. But we got a big family, so I got a big plane. And if you got a company so you it makes enough money, you can write it off and depreciate it. It's great, but I'm private, I don't have I can't depreciate it and I can't write it off. So it's just a dead expense.

[00:30:18] Harry Morton: It's a straight out of the bank account.

[00:30:19] Oscar: Just like having a cow or a horse.

[00:30:22] Harry Morton: Wait, so 49 million. Do you write a check for that?

[00:30:24] Oscar: Oh, yeah.

[00:30:25] Harry Morton: Oh.

[00:30:27] Oscar: Yeah. Yeah. Well, well, you just sell a little bit of stock and you write a check for it.

[00:30:31] Harry Morton: And then 15,000 an hour of the other expenses associated with the jet.

[00:30:35] Oscar: Well, that's about what it cost, because you got to pay for pilots and you got to pay to put it in a hangar, and you got to pay insurance, and you got to pay smart parts with so much an hour for smart parts in case something breaks. Then fuel. And I think the most expensive thing is fuel in the in the pilots. You got to pay pilots a lot of money. You got to have two of them.

[00:30:55] Harry Morton: How many people can be on it at one time?

[00:30:57] Oscar: We can carry 13. 13. Not counting the pilots.

[00:31:00] Harry Morton: And how far can you go with it?

[00:31:01] Oscar: We can go to. We can go from here to England to London. In the middle of the United States to London.

[00:31:06] Sam Parr: Yeah.

[00:31:07] Oscar: And about ten hour flight.

[00:31:08] Sam Parr: Okay.

[00:31:09] Oscar: And you still have plenty of fuel?

[00:31:11] Jackie Lamport: Yeah. That's the other thing about planes. Size correlates to distance. And we haven't talked about that too much because, I mean, it's pretty obvious. But going back to the other end of the spectrum, Nick Huber's plane, that would have a much harder time getting to London from the middle of the United States.

[00:31:26] Preston Holland: The plane can get to Europe with a pilot in it, and That's it. Because there are vision jets that exist in Europe. I mean, there's a wholesale centre in London for Cirrus Vision jets. They have to go up and around through Iceland. You'd have to. You'd probably have to stop if you left Athens, Georgia, to get to London. You're stopping five times for fuel, is my guess. Wow. You're probably getting to New York City. You're going to stop another time when you get further north of there. You're going to stop in either Greenland or Iceland and then maybe make the jump from there. It just depends on winds and things like that. But like at that point, like just go delta one. Like it's just better.

[00:32:09] Jackie Lamport: Yeah. You're describing the, uh, colonial path to America.

[00:32:16] Preston Holland: Exactly. Bingo.

[00:32:20] Jackie Lamport: There's really no argument that flying private can't save you time. It's more comfortable. It's more convenient. If you're a public figure, it might actually be your only option. So it does make sense in a lot of situations. However, I would be remiss if I didn't mention the environmental toll of flying. And I won't hammer the point in too hard. But just remember that when you're doing cost benefit analysis, it's not just about you, it's about everyone. But anyway, after everything we've said, if you still are considering buying, you're probably going to buy used.

[00:32:49] Preston Holland: There are two types of buyers. What I have found there are new buyers and there are used buyers. It's kind of like cars. I am a used car buyer just because of the fact that I want somebody else to eat the massive amount of depreciation that happens in the first year. There are other people that want to buy the new car because they want the new car smell, and they like to be able to customize exactly what they want and they like to order it off the lot. So there's really two types of buyers. It's not necessarily always one or the other. Right. You have massive fortune 50 companies that buy used. You have other fortune 50 that have specific rules in their operating agreement that says we cannot buy used airplanes. We have to be the first owner, right? Mark Zuckerberg buys brand new airplanes. It just is what it is, right? But Elon Musk, his 650, was used when he bought it. Right. So like it doesn't necessarily there is not a category of here's the financial sense when it makes sense to buy used and here's when it makes sense to buy new. But most aircraft transactions that happen in a given year are used aircraft transactions.

[00:33:54] Jackie Lamport: Regardless of if you own or co-own or fractional own or charter, or have a jet or whatever type of plane you have. There's a lot of money in this space, and that means that there are a lot of opportunities to be taken advantage of, and that's something that Preston says you need to look out for.

[00:34:10] Preston Holland: There are a lot of scammers that are out there, and if you are ignorant and I guarantee you that you are in some way, shape or form, you're ignorant about something. There are people that are out there that will take advantage of you. Be on the lookout. The dollars are big, so therefore there's a lot of people that come out of the woodwork that are not exactly A+ characters. So be on the lookout. Don't get ripped off.

[00:34:41] Jackie Lamport: As we've learned today, there is a big range to ways that you can fly private. And what works for you depends on far more than just your financial situation. And thanks to Preston Holland for laying it all out for us. If you want to learn more, you can subscribe to his newsletter and get all the more granular details about flying private and all the different options at his Twitter at Preston Holland six. Or you can go to his website, Preston Holland.com. And if you are a founder doing at least 3 million are, then you should go check out Hampton, join Hampton. Com and also, if you are looking for a podcast like this one, check out Lower Street at Lower Street. And that's the end of the plugs. If you just want to come back and listen to the next episode, that's next week. See you then.