Money Matters 2014/03

It is cold outside and most of the northern states are still covered in snow. If you are a builder, you are 80% done with your winter project, which means you only have another 50% left to do. If you are not a builder, then you are certainly going over your fleet, replacing fuel tubing, checking batteries, and making repairs in preparation for the flying season.
Most clubs held elections in November. New officers took over in January and are looking to continue good practices and bring in their own ideas. The southern states are starting to warm back up and flying has already begun. This is a great time of year to review and plan the needs for your club. This month’s article will focus on making the most of clubs assets.
One of the largest expenses for any club is field maintenance. Equipment, fuel, fertilizer, weed control, seed, asphalt repair, gravel, and paint are all items needed throughout the year. If your club does not already have an equipment fund, I highly suggest you start one. Mowers can be very expensive to replace. With proper maintenance, a quality mower can last 10-15 years or more. Saving a little each year is a lot better than having a large expense all at once. If you are in need of a large piece of equipment, now is the time to shop. Many power equipment dealers still have NOS (new old stock) sitting on their floors at discounted prices. When you look for items like weed control, fertilizer, etc., shop at a co-op instead of a big box store. Maintaining a large piece of land is a lot different than a typical yard. Buying in bulk becomes important. The co-op will not have your favorite brand, but you can get exactly what you need. Take a soil sample to your county extension agent. They will test it and give you a report. Take the report to the co-op, and they will show you the products you need to make your field beautiful.
Club money and savings is another area for review this time of year. As I write this article, the U.S. Federal Reserve has announced tapering of quantitative easing to occur in 2014. This means interest rates are expected to rise as the year progresses. Most clubs keep money in a checking/savings account and CDs. Review these accounts for fees. If you shop around, you should be able to find accounts without fees. For CDs, shop smaller banks and credit unions for the best rates. Also, review the accounts to see who is authorized to withdraw money. You may be surprised to find that officers from several years ago are still on the accounts. Your bank can help you update these accounts.
I am all for keeping an emergency fund in a savings account or CD. It is important to keep this in perspective and not waste opportunity. The money in a savings account or CD will not keep up with inflation over a long period of time. This means the $10,000 you have had sitting in a CD for the past 15 years is worth less than when you put it in there, even if the value is more. Depending on CD rates, let’s say the $10,000 is now worth $12,000-$13,000. This looks like a profit and a nice safe investment. Unfortunately, in order to buy the same products that cost $10,000 in 1998, it will now cost $14,298.71. Because clubs do not buy the same basket of goods and services used by the government to measure inflation, the real inflation costs are much higher. Evaluate the savings needs of the club and then hold a discussion about alternatives for any excess.
Please let me know if you have any questions or have a topic you would like addressed in a column. I look forward to seeing many of you at the Toledo Weak Signals R/C Expo in Toledo, Ohio.