Online Lesson

"Should You Learn to Fly"

Introduction:

Should you learn to fly? Haven't you ever dreamed of soaring like a bird, leaving the ground behind, and looking down on the earth from above? What about those pilots you see in the airport? White shirts, gold braids, little suitcases on wheels, don't they look like they're having fun? How much do they get paid for that? Is learning to fly expensive? What else could you do with that much money? Which would be the smarter thing to do? Which would be more fun? Let's find out!

Task:

You will be asked to. . .

• Define opportunity cost.
• List various career choices and salaries.
• Calculate future value of money.

Process:

Activity 1:

The first thing to find out is whether learning to fly is something that you would like to do. Click here (http://www.aopa.org/learntofly/whyfly/variety.html ), or here (www.aopa.org/learntofly/whyfly/view.html ), for different views on the reasons to fly.

If this sounds like fun, or like something that would be rewarding, click here
(www.rodmachado.com/Websites/Pilot/RecPilot.html ) to learn more.

 Click here to learn about who can fly and how much it costs.

Activity 2:

But suppose you did have $4500: is learning to fly the best thing that you could do with the money? $4500 would buy a lot of things right now. It might be worth a lot more than that in the future if you invest it. Write down three things that you could do right now with $4500.

The problem is always that if you have $4500 and there are several things you could buy with that money, you can only buy one of them. If you choose one, you can't have the others. Your opportunity cost is your second choice. If you learn to fly, you won't have the money to invest. If you invest the money, you won't have enough to learn to fly. Choosing one option means that you won't have the opportunity to do the second thing. The next-best thing you give up is your opportunity cost.

Let's try and estimate how much that money would be worth later if you invested it for your retirement. Click here (http://mortgages.interest.com/content/calculators/index.asp ) to find a calculator that will calculate the future value of the $4500 that you have today. Use this site Bankrate. com, which is an Online Bank, to find out the current interest rates at banks or on money market accounts.

• Now hit the button labeled "Calculate the Future."

That is the amount of money that you would have if you invested your $4500 in the bank or stocks instead of learning how to fly.

But wait. Inflation is the process by which the same goods we buy cost more and more each year. In another way, we could say that our money is usually worth less the longer we hold it. Should we hold onto money that is losing its value over time? Let's try the calculator again, only this time we'll account for some inflation.

Click here (http://mortgages.interest.com/content/calculators/index.asp ) to find a calculator that will figure out what the effects of inflation on your money are.

• Click the box labeled "Calculate the Future."

Notice that it tells you how much money you will have each year until you retire. The first column lists the years starting immediately. The second column lists any additional money you invest. This should be zero all the way down. The column labeled 'Actual Balance' gives the NOMINAL amount of money. That is, the actual number of dollars that will be in the bank or your stock fund. But remember that in the future things are going to cost more? Yep. That money won't buy as much as it seems. To compare it to prices today, take a look in the next column labeled "current dollars." That's a better indication of what your investments will be worth because it shows you what you could buy for them if you were spending them today.

How does it look? If you had $4500 would you choose to spend it on flying lessons? Put it in the bank? Invest it in the stock market? Or buy something really cool right now?

Before you run out to the mall, consider this. If you spend the money on flying lessons, you are investing in yourself. You will have a skill that provides enjoyment and also one that may provide you with additional income.

If you went to work as a professional pilot, how much money could you earn every year? Click here (www.pea.com/imd/airline-pilot-salary.asp ) and check to see how much money some pilots working for the airlines make after 10 to 15 years on the job. Is that for you?

Activity 3:

How much money do people in other professions make after the same amount of time? Ask your teacher what he or she is making. How much could you make as a software engineer? A fry cook? A firefighter?

Check here (www.bls.gov/oco/cg/home.htm ) for information on how much money people working in various professions make.

Remember that most airline pilots have four-year degrees and more than just a private pilot's license. But this is cool: There are many colleges that will train you for various aviation careers at the same time that you are obtaining your private, instrument, commercial, and Airline Transport Pilot (ATP) licenses. Click here (www.aopa.org/learntofly/startfly/whycollege.html ) for a discussion of the reasons to attend a college with an aviation program.

Conclusion:

What do you think? Should you earn the $4500? If you do, will you spend it? Invest it in some stocks? Or invest it in yourself? What would provide the greatest benefit over your lifetime? What would be the opportunity cost of this situation?

If you have decided to look into flying, here (www.aopa.org/learntofly/startfly/chooseschool.html ) is some advice on finding a flight school. Remember that you can start your training at any age. It will be an investment in your future!

Assessment Activity:

Let's see what we learned:

Click here to participate in the evaluation activity for this lesson.