You might already be thinking, “Yeah, right, owning a plane is for the 1%, it’s for celebrities and world leaders. I can’t own a plane.” But Nik Tarascio, author of Own Your Own Plane believes that if you’re an entrepreneur or a business person who flies regularly on commercial airlines, then private plane ownership may not only be possible, but actually profitable.

Not only will you get more time back, you’ll also have access to commercial and networking possibilities, and you can get some major tax advantages.

Nik Tarascio is the CEO of Ventura Air Services, and in this episode, he provides strategies for determining your ideal plane. Whether it’s a practical 4-seater or a luxury 12 seat global jet.

By the end of this episode, Nik will debunk the myths of the commercial airline industry and he’ll tell you exactly what you need to do in order to enjoy the surprisingly cost effective freedom of unrestricted flight.

Nik Tarascio: It’s 2007, I’m a new CEO of the company, and I see this 80 something year old guy come in the front door. He just came off of his first flight on a private plane, and he’s not smiling.

I’m like “Uh-oh.” As a new CEO, I know I’m supposed to interact with customers. So I run over and I go, “Hey man, how as your flight? Did you not enjoy it?”

He goes, “No, quite the opposite, I realized I could have done this my whole life and I completely missed out.”

It really affected me. It was about two weeks of thinking about this guy’s response to that, and I was like, it doesn’t make any sense. I grew up in aviation, I always had aviation available to me, I’m a pilot. I could do any of this stuff.

Really, it touched on my greatest fear, which I had not realized was about living with regret, about knowing that I’ve squandered some opportunity in my life.

“This guy was kind of the canary in the mine.”

We as an industry have done a terrible job of telling people how possible this lifestyle is, how possible this opportunity of controlling your schedule, having this freedom in your life.

It kind of gave me a mission to say, “Hey, let’s do something about this.”

Most people don’t know what’s available to them. For most people, this is an elite club. Let’s open the doors up, let’s let people inside and let them know that this is a possibility in their life.

Myths of Plane Ownership

Charlie Hoehn: What are the most common assumptions you run into about owning a plane? What are the myths? And what are the realities?

Nik Tarascio: The biggest one obviously is what the book speaks to is that it’s all or nothing. It’s either a G6 that Jay Z’s flying around on or it’s an airliner. But there’s all these other options out there. The reality is it’s everything from a little four seater plane.

Some would say, “But it’s a prop plane, what can I do with that?”

Well, you could fly your kids to college in the northeast and you can do your business meetings if you’re a regional sales person. You could go to your vacation home in Kentucky. You don’t necessarily need a jet. I think that’s the first myth.

“Everyone thinks it’s like, “I have to be able to fly to Paris otherwise, why would I even have a plane?””

The second thing is, I hear this all the time, “Is old unsafe?” I need to buy a 2017 or 2018, I wouldn’t want something more than a year old.

It’s not like cars. If you look at a 1985 car, you’re like, “It’s a rust bucket, it’s not that great.” Whereas if you look at a 1985 jet, in many cases, you couldn’t even tell it was a 1985.

It’s just a different standard. They’re made of aluminum, they’re not made of steel. So they don’t rust, they don’t break in the same way, and they’re held to a way higher standard.

That’s a big myth.

There’s just a lack of awareness to how much access you can gain by having your own plane is that people think of the air space system in America as the 300 commercial airports. They don’t realize there are 5,500 airports for a private plane.

It opens things up in a completely different way, this idea that it’s just reserved for the rich. There’s a bunch of people that make $50,000 or $75,000 a year that have their own planes. They fly every weekend to go.

“You could buy a plane for $15,000 if you really wanted to.”

Then you go spend 50 bucks and you go flying get a hamburger in the neighboring state on a Saturday. That’s a massive part of our aviation community.

It’s not just a bunch of wealthy business owners running around in jets. There’s this whole other world out there of people that connect on that level.

Piloting or Hiring a Pilot

Charlie Hoehn: Do you go out and get your pilot’s license or do you hire a pilot for the day, what do you do then?

Nik Tarascio: At that kind of price point, you’re typically looking to become your own pilot. So you’re spending $8,000 to $10,000 to become a pilot. You’re doing these nice little flights that are local. It’s pretty simple stuff, you’re not in a super advanced airplane.

It just gives you an idea that if you want to finance a $15,000 airplane, you can do that. It’s not that hard to do.

To keep the airplane up for the year might be $3,000 a year, cost of fuel on that airplane is going to be, it burns eight gallons an hour so maybe you’re talking about 80 bucks an hour for an operating cost.

It’s really not all that substantial, and I think that that’s the kind of stuff where people are like, wait a minute, yes, it’s true, I’m not going to fly myself to LA yet. But I can go visit my kids at school a state away, instead of driving four hours in traffic, I could go fly for an hour.

Own Your Own Plane as as Lifestyle

Charlie Hoehn: You’re listing some great reasons here, are there other ones?

Nik Tarascio: It often resonates with the entrepreneur types because it speaks to probably one of the biggest values that we have as entrepreneurs, which is freedom and control, right?

We want as much freedom as possible. We don’t like constraints and rules.

Then someone gives you a tool where you say, “Hey, you’re going to become the master of your schedule and you’re going to become the master of the experience.”

It’s not just scheduling, it’s I want to have this kind of interior setup. I want music on my plane. I want to be able to bring the bagels with the cream cheese along for the flight for everybody, I want to bring my own water bottles that don’t get taken by security. I want to take my family, and I want to create unique adventures for my family. I want my kids to see that as a person, you can create freedom, you can be the master of your destiny. So there’s a lot of stuff that goes into that.

“That lifestyle is just pervasive in all things.”

I’ll give you just some context. Four years old, I remember it was cold in New York, it’s day time, I get on a little airplane, I get out, it’s night time but it’s warm, the next day I’m at Disney World.

My parents had decided to fly my family down to Florida to go to Disney, and I immediately had this emotional anchor that airplanes mean Disney world and Mickey Mouse.

At four years old, that kind of laid the ground work for an airplane. It’s a tool for creating whatever you want in your life. It’s a paint brush.

How do you want to create your life, how do you want to create experiences for people you love, what do you care about, what do you want to do more of?

That’s the stuff that people don’t typically don’t talk about. They just think it’s rich people flying to golf tournaments. It’s really not. I want to connect with my children in a way that we take a road trip in a plane and stop on the way down to Florida at a barbecue joint in North Carolina that I saw in the food network.

It’s just an amazing tool for creating with intention.

When Do You Need a Plane?

Charlie Hoehn: I had some line in my head that if it floats or it flies, you don’t own it, you rent it, right? Is there any truth to that? Is there any type of person that you would recommend, stick with renting or stick with normal airline flights, ownership is not for you?

Nik Tarascio: Yeah, there’s always a case where that makes sense. In fact, part of our business model is, we don’t just sell airplanes and we don’t just manage them for people that do own it, we also do charters.

For someone that says “Look, the airlines can’t accommodate my schedule, they can’t give me the quality of experience I’m looking for. I’m just going to pay per use. Once a year I fly to whatever, to Miami from New York, and I want to charter on that flight.”

“That’s kind of the piecemeal option.”

Then there’s the, “Hey, I fly a hundred hours a year, I really want that,” or, “I’ve just always wanted to fly,” right? There’s a ton of reasons why people might do that, but to that point, I think it’s in many cases, most people don’t even know what’s possible.

Sometimes they’ll say, you know, “No, it’s fine, I make it work the way it is.” Then I start to dig into it and I go, “You travel four days a week for work? What if I can make that two? What if you could achieve the same things in two days?” and they’re like, “Wow, I never thought about that. If I could have had all that time back with my family, that’s really valuable.”

But again, we, it’s like the frog and the pot that comes to a boil, it doesn’t know it’s boiling. It never jumps out, just boils and dies.

I think it’s like that in life. We often don’t challenge the things we’re surrounded by. We say, “Look, it’s always been this way, the airlines have always been this way, this is all travel is going to be.”

There are other possibilities for you. You just didn’t realize it.

Planes Aren’t Cars

Charlie Hoehn: You’re making it seem like it’s much more approachable and possible for anybody within a certain income bracket, that’s pretty doable.

Nik Tarascio: Keep in mind, there’s a couple of biases at play. The majority of people that are  playing around with jets are buying on the mode of luxury. Which means, newest, best, fastest, biggest, greatest, whatever.

It’s really hard to win at that game.

What the book is really all about is saying, become a utility buyer, buy value, buy the capability of certain airplanes. Do not buy new luxury. That doesn’t make sense.

“Unlike a car, a 30 year old plane is just as safe as a new one.”

People have applied the thinking that you might bring to a car or a home or a motorcycle to what they think they need to do in aviation, and then they go, “I lost my shirt on this thing.”

Absolutely, it was a nine million dollar plane that lost 30% of its value in the first year, that’s a big hit, that’s a really big hit for people. But when you buy a $300,000 jet, you know, for a company that’s doing five to $10 million dollars a year, that’s not an insurmountable number. To say I’m going to finance a $300,000 asset. You know, it’s already depreciated, the plane might go down $10,000 this year. It might even go up a little, but it might stay flat.

We’re really looking at buying airplane after it’s depreciated, pretty much to the bottom of its parts value so you could sell it for its engines and its fuselage and make the same money back.

It’s just a whole different method of looking at that. That’s why I think there’s this first bias.

Bias and Stigma

Charlie Hoehn: Okay, let’s get to the second bias.

Nik Tarascio: Yeah, I think that second bias again is that some people that are very wealthy, that have these nice planes. I think that’s partly because it’s kind of a known thing that in the business world, you have people that have a lot of money and they go out and do this stuff.

But what you don’t’ realize is there’s these bias of these neighbors, this people in your own community that are pilots that you just don’t know because they don’t talk about it.

There’s tons of people running around that you would have no idea that they’re pilots, that they own their own little planes. Partly because there’s a stigma of sharing that.

Let’s say I’m in a middle class town, my neighbors find out I have a plane, what’s the first thing they’re going to think about me?

Charlie Hoehn: That’s so indulgent. Or yeah, it would be judgmental.

Nik Tarascio: Right, then I can no longer connect as a part of this community in the same way, or people have their hand out. They’re like, you got a plane.

There’s a movie where the line was, “Never feel sorry about a person who has his own plane.” I think that that’s part of the bias is it’s not safe to speak about that in that circle without a fear of judgment or becoming other.

Levels of Owning Your Own Plane

Charlie Hoehn: In the book, you talk about the five levels of ownership and ownership level one is the global traveler. Break that down, what do you mean specifically by that?

Nik Tarascio: There are certain airplanes that are capable of flying across the ocean. And that is, again, that’s typically going to be someone who’s got some pretty serious money behind them.

They don’t need to buy a 60-million-dollar jet, they can buy a three million dollar jet or two million dollar jet. Again, big arbitrage between those two numbers.

But that’s really again, you’re going to see people that say, “Look, I’ve got global businesses, I’ve got manufacturing going on in other places, I constantly need to travel,” so that’s kind of that level of ownership.

“Typically, that’s not a first step.”

Typically that’s someone who said, “I’ve had a small jet and I think it’s time for me to expand on my company’s growing or my lifestyle’s changing and I’d like to be able to be more mobile.

Charlie Hoehn: How often do they need to be traveling like this before you say, look, it really makes sense for you to get a plane?

Nik Tarascio: It really depends on a couple of factors. It depends on how many people they’re flying with, it also – it really depends if they’re willing to offset the cost by putting it on a charter certificate.

Similar to what happens with like a property manager at a ski mount, right? You buy a condo and you say, I’m only going to be there a week a year or two weeks a year and the rest of the time I want the property management company to sell it out and reduce my cost.

We’ll see people that will put eighty to a hundred hours on their plane and then we’ll fly it, we’ll take it on our certificate, for example, and fly five to 600 hours a year.

“The next thing they know, they basically broke even.”

It really depends on the specifics, it’s a very complex model, which is why there’s not a lot of people that can pull it off well. I’d kind of have to sit with someone and understand that mission, but it can be done.

I say, a hundred hours is kind of that line. If you’re coming around a hundred hours, you probably want to have a discussion just to know.

Businesses and Plane Ownership

Charlie Hoehn: Do you know any businesses that own a plane just for basically courting, courting but catering to their clients? Flying their clients in and out and using it for that purpose?

Nik Tarascio: I do actually, I know of a company, I think they’re in Kentucky and what they realized is that it’s very hard to build deep relationships with their customers because they’re in an inaccessible location that’s focused on manufacturing.

They said “Look, I know that it’s important for people to come meet our team and see the culture and meet the family values of this place.” So they do exactly that.

They go and say, hey, we ‘re going to bring in for the day, we’re going to wine and dine you at our manufacturing plant.

I mean, talk about creating unbelievable brand equity and a great customer experience.

I think the thing people forget too is that you know, just turn the WiFi off that day.

“You’ve got three focused hours with your customer.”

No phone, no WiFi, no nothing.

In an uncomfortable environment, not that the plane’s uncomfortable but people are typically not used to being disconnected, right? They end up becoming more vulnerable, and they open up and they feel that there’s a really amazing shared experience. It accelerates connection. That’s the other thing that people don’t recognize that happens on planes.

It accelerates connection between the people on the flight.

Standing Out from the Crowd

Charlie Hoehn: Does one particular instance come to mind as, “Wow, I formed a deep connection, you know, it’s all because we were able to share this experience?”

Nik Tarascio: Sure, it’s really funny because I think again, you don’t have to spend a lot to create something really magical for people.

I have a friend who I call Mr. New York. He’s just connected to everybody. He grew up in this world, he throws a lot of parties, he’s that kind of guy that he’s always planning everything for everyone else.

When I met him, I was like, there’s something really special about this guy and I really like to get to know him better. I’d love to take you to dinner and show you something really beautiful.

He’s like “Yeah, what the heck, people typically are always doing what I’m doing, I want to try someone else’s thing.”

I take him out to dinner and then I flew him down the Hudson river at a thousand feet. We were looking over the city, and you kind of see the pulse of the avenues and the streets. At the time he was late 30s and he said, “I’ve done a lot of things and this is one of the most memorable experiences of New York I’ve ever had.”

“Every time we’re at a party, he introduces me by telling that story.”

I mean, you talk about, this guy’s in amazing circles, he’s connecting me to some really wonderful people on a professional side and other people that became great friends.

All I did, if I really break it down, it cost me $100 in fuel and it cost me a dinner.

The Ideal Plane

Charlie Hoehn: Now, level four is the good life, what is the good life?

Nik Tarascio: The good life speaks to one of the unique airplanes that I think is an important conversation piece. Everyone here is about this like plastic airplane with the parachute, the Cirrus.

It is somewhat of a unique plane in that it kind of took over the single engine market very aggressively. Angelina Jolie was flying it, Zach Braff and a lot of these celebrities.

“It became kind of the new hot plane to buy.”

The reason why I mentioned that is for business owners that don’t necessarily want to spend a ton from an operational perspective. They actually can buy a brand new or relatively newer Cirrus for the used price start around $150k, new could be as high as $700k.

But you get this plane that really will take you just about anywhere from a regional perspective. If you hire a pilot, you’ve got three seats for your family. It will zip you around at 80 bucks an hour to a hundred bucks an hour for the operational of the airplane.

It’s very affordable, but it gives that kind of BMW interior feel. It’s got the parachutes, so people feel safe that if there ever is a safety issue, I’ll just pull the cord and float to the ground.

That plane is just, it was a stand out. I wanted to mention it because I think it’s an important thing for people to consider.

Tax Benefits of Plane Ownership

Charlie Hoehn: Is there anything we ought to take into consideration when it comes to taxes when we own our business and that sort of thing with owning a plane?

Nik Tarascio: I’m glad you asked that. This year, the tax rules changed around aircraft ownership and it’s – it almost seems unfair but you might as well take advantage of it if you can.

“If you buy an airplane for your business, you can expense the entire airplane’s purchase price in year one.”

What that means is again, we’ll just put that into perspective, you went and bought yourself a million dollar airplane for your business, you have a profit of a million and a half dollars this year, you can lower your profit bases down to half a million dollars and hold on to this airplane.

You could write it off over a period of five to seven years depending on what the deal was. But if you really do the math on that, let’s say I’m in a 40% tax bracket in the company, I’m going to get $400,000 back in my pocket this year.

Keep in mind, the plane was financed, so you probably put 250,000 down for the plane and you got 400,000 back in cash.

Charlie Hoehn: Dang, we’re losing money not buying airplanes.

Nik Tarascio: That’s right, that’s what I’ve been trying to tell everyone.

Who to Talk to About Plane Ownership

Charlie Hoehn: What kind of people, experts, do we need to talk to if we’re seriously considering this?

Nik Tarascio: Yes, at the end of the day, it really can be a bunch of different people you could talk to. Typically, aircraft brokers can help with that.

When you look for people that sell planes, it’s all about speaking about the mission. That’s what we’ve done for a lot of people as we say, “Look, tell us your mission, I don’t want to just sell you a plane because I have it for sale.”

It’s important to find someone who is saying, “I’ll go buy on your behalf. I’m not going to sell you the plane I currently have.”

Again, just search the internet, it’s really easy to do. Or you could come to ownyourownplane.com and we could do a consultation if you’re interested in going that route.

Success Stories from Own Your Own Plane

Charlie Hoehn: Can we wrap up with a success story? Somebody that you’ve helped that you know, made this journey of yours worthwhile.

Nik Tarascio: Absolutely. It was really kind of touching, there was a gentleman who was a Wall Street guy who worked 18 hour days, just one of those guys that was just grinding it out. He didn’t get to spend a lot of time with his family, but they decided, look, I think it’s time that we do something for the family. They bought like a little bed and breakfast in Serenac Lake in upstate New York.

He just couldn’t make it back and forth all the time. It just wasn’t really possible for him.

He ended up going out and buying this little plane, and it allowed him to leave late on a Friday and come back late on a Sunday.

“He really could spend a lot of time with his family.”

And my dad at the time had been the one that kind of guided him through the process and we made the plane beautiful for him. We bought an older plane and refurbed it.

It was just awesome to see that guy got his family back. He got the time with his family that was really what mattered to him.

Connect with Nik Tarascio

Charlie Hoehn: What’s the one thing, somebody who is interested in owning a plane can do from your books today to move them a little bit further down that path, what do they need to do?

Nik Tarascio: I definitely think reading it and understanding the landscape. I know I’ve achieved my mission when people start coming to me and saying, “I know exactly what it’s going to cost me to have the control of my schedule in the way that I want it in my life.”

If someone says, “Look, I may not be there yet today, I’d have the budget today to do my ideal level of aircraft ownership, but I know what that number is and now I have a target,” read the book, understand it. If it’s something you want to do sooner than later, let’s setup a consultation and let’s get that number hammered out.

If everyone was walking around with that number, the world will be a better place.

Charlie Hoehn: Just restate one more time, how they can setup a consultation with you, what’s the best way to get in touch and follow you?

Nik Tarascio: Sure, they could go to ownyourownplane.com, or you could check out our main company, ventura.aero.