PGA Players Podcast

Though tax planning is a year round process, the culmination of tax planning each year is tax filing. Most people are familiar with filing their taxes by April 15th, but what are you doing throughout the year to make sure that you are being as tax-efficient as possible?

This week we discuss the different tax documents you will be receiving and what you and your tax team will need to make sure all is accounted for. We go over some of the commonly overlooked items, tax deductions specific to professional golfers, and clarify some of the myths on what you can and can not deduct.

Episode Highlights
1:30 – What you will get from the Tour
2:00 – Tax documents you need
3:00 – Avoid amending your taxes: often overlooked tax documents
3:45 – Foreign tax documents
5:12 – Ways to reduce what you pay in taxes
7:15 – “Tax efficiency is going to be such a good way for you to maximize the money in your pocket now”
8:30 – What is deductible and what is not deductible

The single most important driver of your Net Worth is your physical ability to play golf. If you are hurt or sick and cannot play for an extended period, this has significant impact on your earnings. Not only does it impact your on-course earnings, but it can affect your endorsement deals as well. So why is disability insurance one of the most overlooked parts of players’ financial structures?

The Tour has a disability policy for players with certain exempt status. It is meant to help if you get hurt/sick, but not cover everything. It is important to know what you get as a benefit and when you can receive it if you were to be eligible. Chances are what the Tour supplies, (PGA or Korn Ferry) is not going to be enough to cover what you need. In this podcast we will discuss the unique disability needs of professional golfers and what you can do about it.

Episode Highlights

• 2:00 – “If you get hurt or sick…what are you going to do?”
• 3:22 – Coverage on the PGA Tour
• 4:20 – When would I start getting the benefit?
• 6:12 – Coverage on the Korn Ferry Tour
• 7:15 – Protecting your wealth and future wealth
• 8:03 – “This is one of the biggest gaps I see”
• 8:57 – Top players coming out of college
• 11:20 – Rely on your team to determine the right amount and right type
• 13:00 – Career Ending Injury
• 13:30 – Anthony Kim example 

Waste Management Open week is unlike any other on tour. It brings with it all sorts of craziness: sometimes good sometimes bad. This is a good reminder that sometimes things go wrong off the golf course and can potentially have a major impact on your finances if not protected correctly.

As an athlete you are a public figure and for all the good that brings, it can also be a target on your back. From minor car accidents, someone getting hurt on your property, to dog bites and parties, if someone sees an opportunity to sue, they will. Make sure you understand how to protect yourself from unforeseen liabilities and keep your personal assets and business assets separate so that you maintain proper protection.

Becoming a professional golfer is an exciting time. A ton of hard work, dedication and sacrifice put you in the position to be able to turn pro. Until now, most of what you have had to focus on is ON the golf course. You are now becoming a business, and with that comes OFF the course demands and needs that can take time and focus away from your game.

Follow these 5 steps when turning pro to set yourself up for success. The key to maximizing your potential is to eliminate distractions and take advantage of every opportunity placed in front of you. These steps will put you in a position to do just that.1:15 – Who is on your team?

Episode Highlights

• 00:45 – Who is on your team?
• 1:53 – Taking care of your body
• 3:01 – What do you want from an agent?
• 4:04 – Why a wealth management team not a financial advisor
• 5:28 – Questions to ask a Wealth management team before you hire them
• 7:58 – Get a second bank account and credit card
• 8:49 – Should you set up an LLC
• 9:43 – Where are you going to get better? “Good players push each other”
• 12:06 – What happens if I get hurt?
• 14:01 – “The best investment that you can make is in yourself.”

Find more info at awmcap.co/pga8

As a professional golfer you have been given an opportunity to lead by example. Many athletes use their platform to lead in different ways. Giving back to charities and foundations can be a big part of leading your community. I highly encourage you to get involved, whether financially, with your time, or both.

When making donations, raising funds, or starting a foundation make sure that you know the keys to success and how to maximize your impact. Being strategic with how you donate and are financially involved can have a bigger benefit for the places you support and create more savings on your taxes. Be the best in every element of your world!

Episode Highlights

• The importance of giving back (00:01)
• Figuring out who to support and how to support (00:54)
• Should you consider tax deductions with giving? (01:46)
• Starting a foundation, donor-advised funds, and direct giving (02:47)
• Donating shares of stock (04:31)
• Things to consider before starting a foundation (05:41)
• The goal of maximizing your net worth (7:30)

As a professional athlete, you are presented with all sorts of investment opportunities. Is buying into an IPO a good idea? What do you need to know before investing in a company that has just gone public? Are you compensated for the added fluctuation in price with higher average returns?

Let’s look behind the curtain and understand what risks we are taking that may not be obvious. We will also discuss opportunities to possibly invest in companies before their IPO to increase potential returns. Lastly, and most important, where should you be financially before you even think about investing in start up companies, whether through an IPO or Venture Capital.

Episode Highlights

2:02 – Door Dash's stock price was up 80% from it's IPO price on day 1, who made all the money?

4:06 – Where is Door Dash’s stock price 1 month later

5:30 – How do IPOs do in the long run?

6:48 – How to get in before the IPO, going from $22/share to $182/share

8:00 – What money should we use to invest in higher risk investments like IPOs

10:42 – Who to talk to about investing in an IPO or new venture

Though you travel all over the world during the season, where you spend time in your off weeks can impact your taxes. There can also be a lot of bad advice when it comes to your permanent residence that you might receive that typically does not work and can end up coming back to bite you later. There is also a lot of bad advice out there when it comes to what matters when proving where your state of residence is, that typically does not work and can end up coming back to bite you later.

In this episode, Aaron breaks down a framework of the two biggest questions to ask yourself when deciding where you want to live, the differences between how your on-course and off-course earnings are taxed, and shares some of the implications to your taxes and your game that you may not have considered before.

Episode Highlights

• The two big questions to consider when deciding where to live in the off season (00:56)
• The differences between on-course and off-course earnings (1:50)
• The important considerations in filing for residency (3:32)
• The details states look for when determining your residency (5:08)
• If you have kids – everything else with residency goes out the window (5:51)
• Why you shouldn’t determine residency just on tax savings alone (6:04)
• The questions to consider when determining your permanent residence (7:30)

As a professional golfer, tax optimization is one of the most important areas of your wealth to address. While investments are a crucial part of growing your overall net worth, the savings you could see on tax optimization could completely blow out of the water any of your annual investment returns.

In this week’s episode, Aaron is joined by Super Bowl champion, 8-year NFL veteran and AWM colleague Zach Miller to discuss some of the strategies for professional athletes to optimize their tax situation, and weigh the pros and cons of a SEP IRA vs an Individual 401(k). Make sure to listen to find out the one thing to look for to see if your financial advisor is tailoring your plan like a pro, or treating you like the general public.

Episode Highlights

• The importance of taxes (1:38)
• Investments are a great part of your financial picture and we want to do our best on the investment side, but we're paying 50% in taxes in most places…If we can optimize those taxes, that's going to completely blow out of the water any investment returns.” – Aaron Goldberg
• SEP IRA vs Individual 401(k) (2:36)
• The 3 reasons why you’d want to use an Individual 401(k) (3:16)
• Zach’s experience with endorsement income (7:56)
• What professional athletes should consider to have tax savings in the future (11:46)

One of the first pieces of advice many pro athletes hear, regardless of the sport, is that they should set up an LLC or corporation although the reasons given for doing this can range anywhere on the spectrum of the plausible to absurd. Our job here at the PGA Players’ Podcast is to demystify the amateur advice and instead provide the professional advice you deserve.

There are certainly advantages to making this move for the right athlete. Specifically, having an LLC set up can help protect you from unforeseen liabilities and can also help you avoid or reduce some of your taxes.

Join Aaron Goldberg, CFP®, and business partner and AWM Capital co-founder Erik Averill, CFP®, CPWA®, CKA® as they discuss this topic and more including:

• The two main advantages to setting up an LLC (1:05)
• How the PGA is different than other sports like MLB or NFL (2:03)
• The importance of protecting against liabilities (3:03)
• Piercing the corporate veil (5:01)
• 1099 vs W2 income (6:47)
• “From the tax point of view, this is where golfers are so unique compared to other athletes.”
• When it can be beneficial to not be taxed as an S corp (9:03)
• Ongoing tax planning: It’s all about your financial structure (9:28)
• Name, Image, Likeness: The important steps for college golfers, agents, and family members (10:15)
• Advanced planning (11:18)
• Keeping income in the household, lowering tax liability (12:53)
• 401k or Roth 401k: Why you need a personalized, customized solution (13:31)

With the PGA Tour calendar wrapping up this week and players are heading into the off-season, now is a pivotal time to take advantage of potential tax planning opportunities for this year and dive into financial planning for 2021 and beyond. 

As you’re setting up your off-season plans with your swing coach, trainer, and on-course team, now is also the time to check in with your wealth management team. You’re making plans to set yourself up for success on the course next season; why not take the time to review your financial plans as well? 

In this week’s episode of the PGA Players’ Podcast, I discuss the important steps you should be taking in the off-season to wrap up this year and prepare yourself financially for the New Year, so you are free to focus on what really matters: winning PGA Tour events.

Key Topics Discussed:

• (1:11) the importance of year-end planning for pro golfers
• (1:35) The equation for high end performance
• (1:53) Tax planning at end of the calendar year including retirement plan contributions, corporation filings, and more.
• (3:21) Setting yourself up for financial success next year
• (4:53) Communicating personal expenses and goals
• (5:49) How much are you spending? Building a sustainable lifestyle
• (7:12) Leaving a legacy through charitable planning
• (8:38) Human capital and maximizing sponsorships
• (10:45) Putting together an off-season financial plan