Published on August 31st, 2021 | by Mark Dwyer0
The rise of Home Trading: Is it a good fit for Pilots?
Rob at Line Trading Pilots.com talks to Flying in Ireland about a project himself and Greg started during the Pandemic. Their aim is to help fellow aviation professionals optimise their finances and potentially establish a second stream of income; by providing financial educational courses at minimum cost.
Before the pandemic hit, myself and Greg were flying for the same airline based out of Dublin. Aside from sharing a mutual hostility for 4am starts, we both came into Aviation with a previous background in Finance. My experience focussed on longer-term ‘buy and hold’ investing, whereas Greg’s speciality was in the area of active trading.
The two practices have obvious commonalities – Simply put, both involve buying and selling assets in financial markets in order to seek profit. However, that is largely where the similarities end. The two endeavours have a different risk / return dynamic, hence the need for separate risk-management strategies. And in the context of a Home Trader / Investor, the two practices see a big difference when it comes to the commitment of personal time.
With long-term investing it is feasible that once everything is set up correctly, reviewing your portfolio every 6 to 12 months should be sufficient. With active trading it can involve a minimum of 5 to 10+ hours per week. However, the returns from the latter are potentially much higher (given the right education and training).
Greg and I found that both before and during the Pandemic, many pilots had dipped their toe into active trading and/or investing (Bitcoin and Tech companies featured heavily). But Pilots aren’t the only non-Finance professionals trying this out. Around the world the Pandemic has seen a huge rise in Retail (Home) Trading and Investing, by people who have little to no professional education or experience in financial markets.
So is Home Trading / Investing a good solution for Pilots to diversify their income?
When Covid 19 arrived, like many other jobs in the Travel / Hospitality sector, Pilots were particularly caught out on the financial front. Many were financially leveraged when it came to their mortgage and did not have sufficient cash savings to pay expenses for 18 months – a period even the most conservative financial planner could not have foreseen.
Now that the finish line is in sight for the Pandemic and many Pilots will be receiving their first proper pay cheque since early 2020, is there an opportunity to build personal finances back better? What happens if or when the next downturn hits our industry?
In the area of long-term investments, most pilots will have some kind of pension. But just like the wider population, most are not on course to replace 75% of income in their ‘golden years’ (a common target used). Another important subject in this area which is often overlooked, is on the part of wealth protection. In other words, what would happen to your finances if you were not able to work? Is your Loss of License sufficient?
On the active trading front, just like flying, most can be trained to do it successfully – but it may not be for everybody. Either due to a lack of interest, sometimes a lack of ability or perhaps spare time available.
But it may suit some for a number of reasons; As pilots we have demonstrated the ability and are accustomed to continuous learning – normally every 6 months (in a panic) before our Sim. We are trained to follow procedures. And we tend to work ‘odd’ hours – but we also have many odd hours free too.
Putting these themes together, myself and Greg decided to start a financial education project, specifically targeting Pilots, with a view to helping them optimise their finances and potentially earn a second / replacement income from Trading.
So Line Trading Pilots.com was formed. We are currently offering two courses. The first foundation course assumes little to no knowledge of financial markets and will give pilots a basis to invest for themselves if they chose, or even just hold a more informed and educated conversation with a financial advisor.
The Foundation course will also give you an insight into the world of active trading and if you think that it could be for you, the ‘Command’ Course is available to become a part-time professional Trader.
If you want to find out more about what we do, feel free to contact us via our website, LineTradingPilots.com