"Gilles Leblanc" writes:

Does that CAD 100/hour include the price of the aircraft??

[U.S. readers divide by 1.4 to get approximate U.S. dollar amounts]

That's a tricky one.

I paid approximately CAD 70K for my Warrior (last December), and
one-year Canadian federal government bonds are yielding about 2.5%
right now on the market -- if I use that as the opportunity cost for
the capital tied up in the plane, it will add CAD 1,750/year, or
around CAD 12/hour, to my operating costs.

However, the interest from the bonds would be taxable (unless it were
in an RSP), so I'd have to give about 35-40% of it back to various
levels of government. That would leave me with just over CAD
1,000/year net income if I had invested the money in bonds instead of
a plane, and that works out to about CAD 7/hour at 150 hours/year.

Of course, the plane is itself a volatile investment that can rise or
fall in value, like a house -- when I sell the plane, I might find
that its value has risen or fallen by an average of several thousand
dollars each year. Because of that fact, I decided to leave out
opportunity cost and just treat the plane as one of my retirement
investments in a diversified portfolio (at least it's doing better
than my stocks).


All the best,


David

--
David Megginson, , http://www.megginson.com/