Athlete Wealth Podcast

In this week’s episode, Zach focuses specifically on underclassmen in college. 

You’ve done well in your college career. You’ve put the time in on improving your performance. You’ve made big plays on the field. And now you’re faced with a choice: do you stay at your college or move on to the NFL? 

The decision to stay for your senior year in college or go to the NFL is a massive decision for a 20 or 21-year-old to make. It’s one Zach knows well – he left his playing career at ASU after his junior year and went on to get drafted by the Oakland Raiders as the 38th pick overall. 

Zach breaks down the decision-making process players should go through to weigh the pros and cons of staying another year or two at the collegiate level or if they should attempt to move on to the NFL.

Episode Highlights

• Making the toughest decision of your college career (00:21)
• Zach’s decision-making process when he left ASU early for the NFL (00:41)
• Not just a financial decision (2:41)
• Using data to help make the decision (3:01)
• Weighing the risks of injury (5:36)
• Bringing in the right team to help make you to decide (7:44)

As an NFL player, you’re in the highest tax rate. That means with your endorsement deals and appearances that 40-50% of that income is going to go to the IRS. Are you taking advantage of all the available opportunities to hold on to the income you’re acquiring? 

This week, Zach is joined by Aaron Goldberg, CFP®, fellow AWM Capital colleague and former PGA, Korn Ferry, and Canada Tour golfer, to discuss some of the biggest tax savings that they’ve seen professional athletes miss out on.

An important distinction on why the SEP IRA is inferior is the ability to do non-deductible IRA contributions and then later convert them to a Roth. You cannot directly contribute to a Roth because of income phaseouts but Roth accounts can grow tax-free and then be withdrawn with no taxes later. The Individual 401k can exist and does not affect the backdoor Roth strategy as it’s commonly known. For athletes, the SEP IRA is an indication the advisor or CPA is not experienced with the unique circumstances and income of athletes. If you would like more detail check out our blog.

Episode Highlights

• The Individual 401(k) and endorsement income (00:24)
• Deferring your 1099 income (1:17)
• The importance of a CFP® as a wealth advisor (2:24)
• Is a SEP IRA enough? (3:36)
• Zach’s experiences of missing out on tax savings (5:18)

The differences between someone who plays in a football league on the weekends and an NFL player are obvious, but did you know there are similar gaps between people who call themselves financial advisors? When trusting someone with your net worth – do you know the designations to look out for? What are the differences in qualifications between someone who says they’re a financial advisor and someone who is a CFP®, CPWA®, CPA or CFA? Approximately 300,000 people in the country could call themselves a financial advisor – even if they just sell insurance. However, there are only roughly 82,000 people with the designation of CFP®, and 2,500 with a designation of CPWA®. Knowing which designation you need for your unique situation could end up equaling millions of dollars for you.

In this week’s episode of the NFL Players’ Podcast, Zach Miller and Erik Averill break down the different designations you’re going to come across and you should be looking out for, and they’ll cover one of the biggest assets that you have as an NFL player that we’ve seen as also one of the most neglected assets out there.

Episode Highlights

• Who is actually a professional? (1:16)
• The designations you should look for: CFP®, CPA, CFA (2:15)
• Trusting in the right expertise (4:24)
• “So what I would say is, regardless if you're an athlete or you are parent listening, or an agent, you should first and foremost, work with an independent company that is doing what's in your best interest. They're not actually trying to sell their products and their services at you of trying to extract value.” – Erik Averill
• What Wall Street firms can’t help you with (5:26)
• Everything you should know about the NFL Benefits Package (7:05)
• “These are extra benefits that the average advisor just has no chance understanding and they don't want to, it's not worth it for them, but it matters to me and it matters to helping guys get the benefits that they earned while they were playing.” – Zach Miller

You’ve likely at least had conversations with them – Goldman Sachs, UBS, Merrill Lynch, Wells Fargo, Morgan Stanley – but are these big wirehouses the best place for you to build your net worth? 

As a professional athlete, you’re in a unique situation, and the reality is that these mass affluent broker-dealers were not built with you in mind. Your unique situation deserves a unique solution.

In this episode, Zach Miller is again joined by Erik Averill where they discuss specifically why these firms are not equipped to handle the complexities that an NFL player’s financial situation demands and what you should be looking out for instead in a firm that can have your best interests in mind.

Episode Highlights

• Why are wirehouses not a good solution for NFL players? (00:59)
• “That's the case with those wirehouses, the UBSs, Morgan's, Merrill's Goldman Sachs. They're not a fit for athletes and they never will be. They try to do this, they will start an athlete division, athlete and entertainment division, and they'll put a former player as the head of it. It's truly a disservice to the players. It's a disservice to NFL players in particular because, at their core, they're just asset managers that do portfolio management and they might tease you and say they have access to some proprietary products, which are just repackaged financial products by that company.” -Zach Miller
• Why big brokerage aren’t necessarily equipped to provide you the best solution (3:14)
• Zach’s issues with the NFL PA financial advisor program (5:57)
• The solution for the masses vs the solution for the pros (7:57)
• “Think about who sponsors bowl games, who sponsors the plastering inside the stadiums, you'll see a Merrill banner, you'll see a Morgan Stanley banner, you'll see a Northwestern mutual banner. I always ask [players], ‘You realize that they're actually advertising to all the fans sitting in the stadium.’” – Erik Averill
• Why you should demand the best (10:09)
• The signs to look out for when trying to spot a broker-dealer (10:55)

As an NFL player, you're in the top earning bracket in the world. How should you be handling your net worth? How did you determine who currently manages your net worth? The problem with many NFL players is that they end up with a “nice guy” broker who manages their assets, but not much else.

As an NFL player, are you only getting “JV Team” advice?

In our last episode, we began to discuss how the wealthiest people – Zuckerberg, Oprah, the Vanderbilts handle their financial situation differently than the rest of the world. Ultimately, what we said was that NFL players need to think like Jerry Jones, John Mara, Dan Rooney and understand they should demand the same level of service as these NFL billionaire owners.

We pick up that conversation this week with Zach and Erik discussing the specific strategies when it comes to optimizing your net worth as an athlete and why you should view your net worth just like the wealthiest in the world do and demand the same level of expertise with your finances that you would from your trainers, doctors, and nutritionists.

Episode Highlights

• The difference between how pros vs amateurs approach their money (0:07)
• Why athletes deserve the family office model instead of an asset management firm (1:06)
• “So first of all if you heard that they had their money at UBS Morgan or Merrill, you'd laugh, just knowing everything I know about the industry now. And that's not what the wealthy do. They have a family office and that's why I wanted to come work at AWM is because I know that the family office model is what the players deserve and it will help them treat their wealth the right way.” Zach Miller
• “Athletes have worked their whole life to become the best at their craft. They should demand the best from their advisors.” Zach Miller
• The family office and multi-family office models explained (2:15)
• One of the biggest financial mistakes a pro athlete can make (4:52)
• “You don't need a friend. What you need is someone that really gives you the tough news sometimes or helps correct you when you need a sounding board of a financial decision.” Zach Miller
• Accessing the appropriate expertise to address your unique financial situation (7:10)

We’ve all seen the headlines of former professional athletes - who made millions in their career – having to file bankruptcy later in life. It’s a sad statistic and one that should be totally avoidable when you have a competent financial team that has your best interests in mind.

The problem can come when you hear many different financial advisors who tout their ability to get you the best returns on your investments. However, investment returns aren't enough, and this can often be a sign that your advisor is focused on the wrong objectives. They are ignoring so many other aspects of your finances.

In last week’s episode, we discussed the reality that, as an athlete, you’ve committed your life to being the absolute best at what you do, and that you should also demand the best from your professional team off the field. This week, we continue by talking about identifying and leveraging the greatest drivers of your net worth – your human capital, what to look out for when building your ideal financial team, and what it actually means to own your wealth.

Key Topics Discussed

• What should players be trying to accomplish when it comes to their financial situation? (00:31)
• Defining human capital (1:14)
• What separates the rich versus the wealthy (1:45)
• “Wealthy individuals are ones that understand income is not the most important. It’s actually net worth.” Erik Averill
• Why just focusing on investment returns isn’t enough (2:42)
• The importance of your savings rate and realizing your human capital (3:40)
• Building your customized financial plan (6:16)
• Combatting the sad stats of athletes filing bankruptcy (7:13)
• Building your financial team (9:27)
• “You want to hire a head coach that doesn't have a conflict of interest. If you were to hire an advisor that works at one of the big brokerage houses, they're not trying to help the team win all the time. Sometimes they're doing things just for themselves. That's the difference between an independent advisor and the big brokerage houses. It's as simple as that.” Zach Miller
• Optimizing for after-tax returns (11:33)
• “A lot of times, the advisors are good people, but if you incentivize them to sell products or they're only limited to selling the products of their firm, or pushed to sell those products of their firm, they're not giving you the best advice. They're not allowing competition in the marketplace to get you the best deal, or the best type of savings you can find.” Zach Miller
• The value of a strong tax team (14:05)

As an NFL player, are you getting the financial advice and returns you deserve? 

In the first episode of the NFL Players’ Podcast, former Seattle Seahawk and Super Bowl champ Zach Miller is joined by AWM Capital co-founder and former professional baseball player Erik Averill to discuss the most important financial questions that all NFL players should be asking, how to start building your financial team, the goals of this podcast, and the things Zach wished he would’ve known as a rookie now that he is retired.

Join us each week as Zach breaks down the most important actions you should be taking to help create long-lasting wealth in your career as an NFL player that will allow you to leave a legacy long after you retire.

• (1:03) Zach’s biggest goals for the NFL Players Podcast – helping players grow and keep their wealth
• (1:31) Zach Miller: “I hope to be the financial advisor to NFL players – that knows the most, that does the best for their clients, and above all else treats them like I wanted to be treated and would’ve liked to have had as an advisor when I was a player”
• (1:55) Erik Averill: “At AWM, we understand what professional athletes actually need” 
• (2:20) When do you start to understand that football was a business?
• (3:55) How should players think about themselves as a professional?
• (4:45) The “lifecycle” of an NFL player
• (5:00) Zach Miller: “You’ve put so much effort and time to being an NFL player - to achieving that goal and achieving that kind of excellence on the field – that you should demand that off the field.”
• (5:43) The problem with most financial firms
• (6:04) The robust team every NFL player should build around them to help them achieve success on and off the field
• (7:22) As a second round NFL pick, what was it like to suddenly come into that kind of money as a young player? What do you wish you would’ve done different?
• (9:04) What advice would the Zach of today tell Zach as a rookie?
• (10:01) The main goal of this podcast
• (10:57) Some of the most important questions NFL players should be asking
• (12:32) What’s behind Zach’s passion for advocating for NFL players
• (13:33) Why Zach joined the AWM Capital team
• (15:49) What was it like to change agents as a player?
• (18:57) Zach Miller on business and finance for young players: “For me I’m always going to side with the players and see it from their point of view. I want to be able to communicate that I was in your same situation: you don’t have to be perfect, you can just be good and your situation will be excellent by the time you’re done playing.”
• (20:07) Being the CEO of your professional sports career
• (21:22) Why just liking your financial team isn’t enough (Resource: The Speed of Trust by Stephen Covey)
• (22:32) Holding people accountable to keeping your best interest at the top of the priority list