How Flying Private 10X’d My Life
For all my brother and sister road warriors out there putting on sixty to hundred thousand miles a year and being gone from home one hundred plus days, I know the stress and frustration that goes with that kind of travel. Over sold flights, TSA, sick people sitting next to you, delays, gate changes, cancellations, rude flight attendants and useless announcements can make traveling for work more than the work itself.
I have flown over three million miles with commercial airlines over my career. I have seen a lot at 40,000 feet including; breaking up a fight in flight from Seattle to San Diego, a bomb scare from Richmond to Denver, and an actual bird strike that took a Delta flight down out of JFK on my way to LAX. I am sure you have stories you could add to this and I hope you do.
It became so tempting for me to stop traveling and try to replace the long cross country flights and delays with live streams and social media but there is nothing more powerful than a face to face meeting. And maybe now more than ever because of the saturation and temptation of technology.
The reason I invested in a private jet was not to simply get in front of more customers but to be able to do so at a moments notice while improving the quality of my life. When I see a piece of real estate I want to purchase I can get the owner on the phone and be there the same day. The ability to move with speed and certainty gives CardoneCapital a tremendous advantage over other groups and probably a reason we are growing so fast.
When I asked my accountant to do the math on buying my own jet he repeatedly bragged that there was no making sense of the investment. As he justified why it cost too much, I watched the most successful companies; Apple, CocaCola, Facebook, Nike and Amazon buying new jets and then trading them out for new jets every three years. So who is right I asked myself? Remember the accountant isn’t thinking about the expansion just the expense and will never calculate the emotional and physical cost of the anxiety, stress, uncertainty, delays, changes, abusive flight attendants, TSA or the cost of cancellations.
In 2019, it was reported that commercial airlines are late 19.1% flight of the time and this doesn’t include tarmac and taxi delays.
Keep in mind Delta Airlines allows for a flight time of 6 hours and 20 minutes from JFK to LAX when the actual flight time is actually 5 hours and twenty-one minutes on my 550. Essentially, airlines pad their schedules to boost on-time records. If time is money then a smart person would calculate the value of their time and figure what that cost is. The department of transportation records, says less than 80% of the time the major airlines are NOT on schedule. If ten percent of my flights were late I would fire someone.
The online magazine, Breaking Travel suggest the top business professionals, dependability outweighs the cost of private travel. A chartered flight from Los Angeles to New York can cost $50,000 — $80,000 on a Gulfstream 550 like I own. So how does someone make sense of $10,000 per hour when you can buy first class both ways for $4000?
“Think of the premium you pay for private travel as an insurance policy that you’ll arrive on time to your destination,” says Marriott board member Jonathan Lifshutz. Private travel initially was only afforded to the ultra-high net worth but is becoming more widely accessible with fractional ownership models, ride sharing and jet cards and who knows if the uber-like, platforms such as “SurfAir” become a reality.
Then, the question is, how does anyone make sense of the next level and go from charter to buying their own $50,000,000 private jet and shell out another $3M a year for upkeep? This is a much longer debate where there will never be the consensus. No matter how many ways I tell you how I made sense of my decision most calculators will still make me wrong. (Read the last line to see my view of that.)
One way that private jet owners justify their decision to purchase is the result of President Trump extending the bonus depreciation of 100% in the first year of ownership. This was a very big factor in my decision to buy a new Gulfstream 550 from Gulfstream. In the past, depreciation was spread across five years, or 20% depreciation per year.
But remember, you still have to calculate operating the aircraft:
maintenance, fuel, two pilots, hangers, insurance, and on and on. So why spend that money when you can charter? This is when the jet brokers crack out their calculators and either make sense of ownership or charter depending whether they are paid to sell or paid to lease. The bottom line is you will never make sense of buying a jet until you do. It won’t pencil out, because most of what makes it worth it, you can’t put into a calculator.
For instance, I am constantly asked, “What is the cost of fuel?” Well, the obvious answer is taking the capacity of fuel for Gulfstream 550 (50,000 pounds) then convert to gallons and divide by 6.67 then multiply times $5 to $7 per gallon depending on where you are. But whenever I am asked the cost of fuel I say, “the Gulfstream 550 is arguably the best private jet built today, but it still can’t fly without fuel.”
The point is some things don’t calculate because without fuel the $50M jet is worth nothing. A better question is, what value has 10X Airlines brought to your life?
- How much time has it saved you?
- Have you increased your real estate holdings because of your ability to get in front of sellers of real estate?
- Has your business grown because of your purchase?
- What is it worth having your logo on your bird?
- What is it worth to bring your kids with you anywhere in the world?
Just last month I was able to reach nine countries for business and real estate, meeting partners, princes and arrive rested to speak at 10X conferences around the world. 10X Airlines took myself, wife, two kids, nanny and staff from Miami to Rome, then Bucharest to Dubai and on to Singapore and Kuala Lumpur, then to Phuket, Thailand, the Maldives, and then to London and back to Miami.
We never missed a meeting, never had a delay, were able to reroute trips, didn’t have to deal with delay and nasty flight attendants and was able to add new destinations as opportunities were created.
Four of the countries we visited were not even on the schedule until ten days into the trip. On every flight, I was able to catch up on much-needed rest, home school my kids at 51,000 feet, while showing them the world and involving them in my businesses.
Having the ability to fly where you want, whenever you want and stay or leave as you see fit, is priceless. But back to the hard cost of operations — Sherpa Report suggests cost to operate Gulfstream 550
Item Cost: Crew Salaries $363,625 Cabin Crew Salary $120,000 Director of Maintenance Salary $195,500 Crew Recurrent Training $79,420 Cabin Crew Recurrent Training $3,705 Director of Maintenance Recurrent Training $13,460 Hull Insurance $52,820 Liability Insurance $23,408 Hangar / Office $108,616 Total $960,554
The other fixed costs are for cockpit subscription services, which consist of the following items. Nav Database $58,311 EGPWS/TAWS Database $7,310 Flight Planning $13,580 Wx Services $1,463 Charts & Maps $2,560 Total Cockpit Costs $83,224
Variable Costs (Per Flight Hour)
These expenses are directly related to the operation of the aircraft and are represented as an hourly cost figure. Included are Fuel Expense, Maintenance Labor Expense, Parts Expense, Engine, Avionics and APU reserves expenses. The fuel costs assume a price per gallon of $5.00 and an average fuel consumption of 358 gallons per hour.
Item Cost Fuel Expense $1,790 Airframe Sys. Parts & Labor $782 Engine Reserves $1,081 APU Reserves $52 Avionics Protection Program $130 Total $3,835
Annual Variable Costs. There are two sets of additional costs that vary based on usage, these are the “Annual Cabin Services Cost”, shown below.
Item Cost Broadband $48,070 Sat TV $11,131 Cabin / Iridium Phone $2,947 Total Cabin Costs $62,148 . “GoGo is Terrible by the way and almost never works,” Grant Cardone
Item Cost Catering Service $64,200 Flight Crew Travel $42,800 International Trip Support $32,100 Concierge $10,700 Ground Handling $21,400 Landing / Parking Fees $42,800 Total Other Trip Costs $214,400
Annual Costs Summary Assuming that the aircraft is used for 400 hours per year, then the total annual costs of operation will be: Total Annual Fixed Costs $960,554 Total Annual Cockpit Subscription Services Costs $83,224 Total Owner Annual Variable Cost $1,534,000 Total Annual Cabin Services Costs $62,148 Total Annual Trip Support Costs $214,400 Grand Total Owner Flown Annual Expenses $2,854,326 Owner Cost per Flight Hour $7,135
So in summary, if you are trying to make sense of just the money you can’t.
In addition, to be able to buy the jet and pay the monthly cost of operations you need one more thing and that one thing has nothing to do with how much money you have! You need places to go.
In the second half of the year this is what I will use 10X Airlines for business to go from Miami to New York three times, LAX -four trips, Orange County once, Columbus Ohio for a seminar, Vegas once or twice, Scottsdale twice, and Houston, Austin, Savannah, Mobile, Ala., for real estate and that is before I extend our 10X World Tour to include, Toronto, San Paulo, Honolulu, Bali, Sydney, Aukland, Melbourne, Brisbane, Taipei, Tokyo, Manilla, Cambodia, Moscow, St Petersburg, Kazakhstan, and London twice more and that is if nothing gets added.
The Gulfstream 550 has been the single best investment I have made in my life short of my marriage, kids, branding, and the real estate investments we make at CardoneCapital. Less stress and more freedom.
Grant Cardone, CEO
CardoneCapital — 1.2B AUM
Grant Cardone is the author of eight business books, thirteen business programs, and is the CEO of seven privately held companies. Forbes calls him one of the top social media business influencers in the world. Cardone founded and manages a real estate investment firm, Cardone Capital, with $1Billion assets under management. He also travels the world consulting Fortune 500 companies, small business owners, startups and governments on business expansion. One of his enterprises recently hosted The 10X Growth Conference at Marlins Park in Miami, Florida with over 34,000 business people and entrepreneurs in attendance from over fifty countries. Mr. Cardone resides in Miami with his wife, Elena Cardone and their two children, Sabrina and Scarlett.
