I pick up the phone and hear an all too common question. My business is having a record-breaking year. I saw the new quarterly estimates and it is crazy how much money I will owe in taxes. Is there something we can do to lower my tax bill? For most business owners a great way to lower taxes is by deducting expenses through their business. Tax deductions for business owners are part of an overall tax planning strategy for business owners. In this blog, we are going to give you the top tax deductions for every business owner. Tax Deductions for Business Owners There is a never-ending chase for business owners trying to minimize their tax bills. One of the best ways to do this is by using tax deductions. The issue with tax deductions is that business owners aren't educated about what a tax deduction is and how to maximize them. We are going to break this blog into two areas. What is a tax deduction? What are the top tax deductions for business owners? Let's Dive in. What is a tax deduction? The first step in any tax planning is to first understand the end goal. In our case, the end goal is to limit taxes in the current year while also being mindful of taxes in the future. Often times the best way to do this is through a tax deduction. A tax deduction is a simple concept that often gets overcomplicated. Here is how it works. Tax deductions are a business owner's friend, but they need to be understood properly in order to maximize the benefit. The most famous tax deduction for a business owner is buying an SUV over 6,000 pounds. Everyone has seen their friend go to the dealership in December because they could "write it off". Let's look at what they really mean. In 2024 you expect to make $1,000,000 in total income. As part of your tax planning, you purchase a new company vehicle for $100,000. How much money does this really save you? Without Car Purchase: Income - $1,000,000 Taxes - $294,966 With Car Purchase: Income - $1,000,000 Tax Deduction - $100,000 Adjusted Income - $900,000 Taxes - $257,966 You have saved $37,000 in taxes and spent $100,000 on a car. So remember, a tax deduction only reduces your taxable income. With anything in taxes, the devil is always in the details. Now that you understand the basics let's transition to the top 5 tax deductions for business owners. Starting with the tax deduction you get for buying a car. What are the top 5 tax deductions for business owners? We have all heard of the crazy deductions business owners can get. We are going to focus on the 5 most common deductions and how you can use them. Section 179 - How do you get a tax deduction for buying a car? Augusta Rule - How do you get a tax deduction for renting your home? Qualified Business Income - How do you pay yourself and reduce your taxes? Home Office - How do you right off home office expenses? Customer Meals and Entertainment - How do you maximize the tax benefits of client entertainment.? If you want a better understanding of tax planning strategies before diving into the details check out the Moment Guide to Tax Planning for Business Owners. Section 179 - Deduct Your Car We have all heard of the business owner deducting their car. One of the more famous ones is a Mercedes Benz G Wagon which can go for over $200,000. To get this deduction you have to meet two criteria. The vehicle must weigh over 6,000 lbs. The vehicle must be used over 50% for business purposes. Sounds great. You buy this car and save thousands in taxes. Not so fast. There is one big surprise waiting for many business owners. This type of deduction or write-off is depreciation. The government is allowing you to depreciate this vehicle fully in year one. When you go to sell this vehicle anything above $0 will be recaptured and added to your tax bill. This can still be a great strategy but it is important to remember deducting your car comes with strings attached. Augusta Rule - Deduct Rent on Your Home If you google the Augusta Rule you will be bombarded with TikTok videos of people telling you to buy a multi-million dollar mansion to avoid taxes. Although that isn't possible the Augusta Rule can be an excellent strategy if you use your home in your business. Originally this rule was created in the 1970's for residents of Augusta Georgia who wanted to avoid taxes on renting their homes during the Masters golf tournament. Here is what it allows and how you can use it. The Augusta rule allows you to rent a home for up to 14 days and not report this income. This home can be your primary home or vacation home. The two most often ways we see this rule used are renting your home for an event coming to town or renting it to your business for a work function. The two keys to remember when doing this are the following. Rent must be at market rate. If you rent the home for over 14 days all income must be reported. The next time you are looking for a venue for a work event your property might be the most tax-advantageous option. Home Office Deduction After COVID working from home has become all the rage. Many business owners have started to wonder if they can write off a home office as tax time comes around. Look no further because as a business owner, you can deduct your home office. In order to deduct any portion of your business you need to meet the following requirements. The workspace at home must be exclusively used for business. The workspace at home must regularly be used for business. If you meet these two requirements let's take a look at the two methods of calculating the deduction. Simple Method The simple method is a basic calculation based on the square footage of the space. You are able to take a deduction of $5 per square foot up to a maximum of 300 square feet. Under the simple method, the maximum deduction will be $1,500. This method is typically used for smaller offices that do not have a significant cost to them. Standard Method This method can be valuable for those with a more expensive home with a larger office space. In the standard method, you will need to calculate your office as a percent of your total home. Example: Office Square Footage - 2,000 Square Feet Home Square Footage - 8,000 Square Feet The percentage you will use is (2,000/8,000) = 25% This means that 25% of your home cost can be deducted as home office expenses. There are two types of expenses for the standard method. There are indirect expenses and direct expenses. For indirect expenses, you will receive a deduction proportionally based on the calculation we just completed. In our example, this was 25%. Here are a few examples of indirect expenses. Mortgage Interest Depreciation Taxes Insurance Utilities The second type of expense would be a direct expense. These are expenses directly tied to your home office. You will receive a 100% deduction of these expenses. Like anything in taxes, you can make this simple or complicated based on your unique situation and how much work you are willing to put in. Qualified Business Income Deduction One of the newest deductions for business owners is called Qualified Business Income or QBI. It was rolled out as part of the Trump Tax Reform. For certain businesses, you are able to deduct 20% of your business income. Sounds great. Let's see if you qualify. There are many complexities to this deduction. We are first going to give you a broad explanation and then show you an example. This is best explained with an image allowing you to see which bucket you fall into. Let's simplify this with an example. Note this is for educational purposes consult a tax professional before implementing this strategy. Joe is making $1,000,000 in his business and continues to get beat up by taxes. He is trying to determine what he can do to save money on taxes now because he is in the highest tax bracket. After looking at Joe's tax return it is clear that he is not optimizing his salary to maximize his qualified business income deduction. Joe is paying himself the following between wages and distributions. W2 - $100,000 Distributions - $900,000 This will result in a $50,000 deduction for qualified business income. The simplified way to think about this deduction is the lesser of 50% of W2 wages or 20% of distributions. After reviewing the situation we switch his W2 wages and Distributions to the following. W2 - $300,000 Distributions - $700,000 This tweak results in a $140,000 deduction for qualified business income which will reduce Joe's taxable income by an additional $90,000. This alone saved Joe in the ballpark of $30,000 in taxes. The last element to explain is what a Specified Service Trade or Business(SSTB) is. You will need to determine this to see if you qualify. The easiest way to think about this is to look at your business and ask yourself "Am I the business". Accountants Lawyers Physicians These are all examples of SSTB businesses. Typically businesses that are not 1 on 1 are non-SSTB businesses and have an opportunity for a large tax deduction. This is hands down one of the biggest misses we see when doing tax planning for business owners. Customer Meals and Entertainment Deduction Back in the 90's you would hear stories about companies writing everything off. Everything from $100,000 golf course memberships to $10,000 client dinners. All of that has changed and many business owners didn't get the memo. Let's take a look at some of the most common questions we get around this deduction. Although there have been a few changes in the last few years the two most notable are the following. Entertaining your clients receives a 0% deduction on any tickets and golf. Those company season tickets are no longer deductible. Meals with clients are now only 50% deductible after 2022. Although there aren't as many deductions as there used to be there are still plenty of opportunities to take advantage of. Tax planning will always favor those business owners who take the time to get educated and they combine that knowledge with the right team. If you are concerned about your tax team or want to get better educated about tax deductions reach out to our team below. If you are a business owner who is looking to find a financial team that specializes in you, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Are you a fiduciary? Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors? We are specialists in working with professional athletes and business owners. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes and business owners. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third-party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Clients can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team? We believe in the power of the team. Our client teams consist of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. What is a tax deduction? A tax deduction is your ability to reduce your total income by the amount of your deduction. For every dollar of deductions, you will reduce your taxable income by a dollar. What does your average client look like? Our clients are nearly all athletes and business owners. Our average client has a net worth greater than $5M. The strategies, solutions, and planning that we implement have a high-net-worth and ultra-high-net-worth client in mind. How to pay less in taxes as a business owner? Taxes are going to be your largest lifetime expense. Our goal is to help you pay the least amount possible and never leave the IRS a tip. Our team of specialists understands this and works to reduce your taxes today and in the future. How do taxes work as a business owner? When you own a business you are going to get taxed in two ways. First, you will be taxed as an employee through the W2 wages you take from the business. Second, you will be taxed on the profits that your business earns. What are the best tax strategies for business owners? The best tax strategies can save you thousands if not millions in taxes. The best strategies will be specific to your needs and goals. Strategies most business owners consider take into account what they expect to make in income this year as well as in future years. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

The day I had waited 18 years for had come, yet instead of excitement, I felt this wave of unknowns. You know, that feeling you get when a big moment is on the horizon but you also realize the stakes are as high as possible. That was me on draft morning in 2009. Now look, I would say I had a better education on the MLB draft than most potential draftees and I still felt that way. I had three high school coaches who were 10-year big leaguers with one, Andy Benes, having been the first overall pick in the MLB draft. You would think with that stable of knowledge I would feel prepared. Yet the reality was far different. In this blog, I will talk about all the elements future MLB draftees should know or say more simply, all the stuff I wish I had known when I got drafted. MLB Draft The MLB draft dates back to 1965 and serves as the main avenue for amateur baseball players to begin their professional careers. Over the years, the MLB draft has ebbed and flowed with the number of rounds but in 2024 the MLB draft consists of 20 rounds. Teams are awarded their draft slot through a lottery unless the team made the playoffs in the previous year. If a team makes the playoffs, they are slotted into the draft based on their finish. While the draft order a team receives is important, perhaps more important is the financial ramifications of their picks. You see each MLB team receives a bonus pool determined by their order of MLB draft picks. In 2024 the bonus pools range from $ 18,334,000 for the Cleveland Indians down to just $5,914,700 for the Houston Astros. The total draft pool for teams is $334,375,000 up nearly $27,000,000 from 2023. The bonus pools work like this: Rounds 1-10 have assigned slot values Rounds 11-20 have no assigned slot values The first pick in 2024 has a slot value of $10,750,600. Players after round 10 can sign for up to $150,000 or additional pool money Teams that exceed more than 5% of their bonus pools lose future draft picks In short, this structure incentivizes teams to try to save money on their top picks (biggest slot values) and try to reallocate that money towards lower picks as more incentive to sign. ***A recent example of this was the Texas Rangers in 2022. They had the third overall pick which they used to sign Kumar Rocker. Rocker signed a deal for millions below slot which allowed the Rangers to sign the top high school pitching prospect in an above-slot deal. To fully understand the MLB draft you need to understand the incentives of the teams. Major League Baseball is a business first. MLB Draft Contracts The MLB draft reminds me of that famous line from Jerry Maguire, "Show me the money". Unlike other professional sports, the MLB draft is unique in that the top talent often doesn't sign. High school players in particular carry significant leverage when they enter the draft committed to a top college. NIL earning potential has only increased the leverage many players wield in the draft. For many players (myself included) the stance is this is my dream but the money has to be right for me to do it now. That my friends is a position of power for you as the player. Now that we understand leverage, let's talk about how these contracts work. In the MLB draft players sign a uniform minor league contract with teams that works like this: 5 years of team control if you sign at age 18 4 years of team control if you sign at age 19 or older Teams can further control players by adding them to the 40-man roster Example : A player drafted as an 18-year-old can be put on the 40-man roster after his fifth year. That player is then controlled by the team for up to six additional major league seasons before MLB free agency. Professional baseball players face a barbell-earning ability. You can earn a lot of money early on (signing bonus) and a lot of money in the big leagues (MLB contracts). During the time in between players earn very little. Current minor league salaries in 2024 look like this: Rookie Ball = $19,800 Low A = $26,200 High A = $27,300 Double A = $30,250 Triple A = $35,800 This is why it is critical to understand both how draft contracts work and how you can maximize the signing bonus you receive. The standard signing bonus for MLB draftees works like this ~ you receive half of the bonus in 30 days after signing your contract and the other half the following calendar year. Example : You receive a signing bonus of $4,000,000. You would receive a check for $2,000,000 in 30 days and a check for $2,000,000 the following calendar year. Keep reading to understand the planning opportunities that come with properly structuring your signing bonus MLB Draft Timeline It takes 18 or more years to get drafted and then within a span of 30 days you feel like your life is forever changed. To say the draft timeline from draft day to signing to reporting to the team is a whirlwind might be the understatement of the century. This was one of the most confusing parts of the MLB draft process for me so let's break down exactly how it works: Step 1 - Get Drafted Remember there is a laundry list of unknowns but my advice is simple, enjoy the day Step 2 - Negotiate and Sign Your Contract Most years players have around 30 days to negotiate before the signing deadline Step 3 - Navigate Post Draft Media For top players, this includes media requests and often a trip to the big league stadium Step 4 - Make a Good First Impression Remember this is a business, a business that just invested significant money in you Step 5 - Report to Team or Spring Training Facility Depending on usage and age players will be assigned to either a MiLB team or the team's spring training facility All of the above can happen within 30 days of draft day. On top of that let's not forget all the texts, phone calls, and celebrations with family and friends. Oh ya and don't forget that you are also a pro now which means you are getting paid. I show you this because far too often I see families head into the draft ill-prepared for the whirlwind that is about to happen. You get to do this once...maybe twice, my goal is that you enjoy it. To enjoy it fully you need to be prepared for what is about to come. As specialists in athlete wealth management, our job for families is to make sure all of the above is in order so your focus can be on enjoying that once-in-a-lifetime moment. MLB Draft Planning Opportunities If you hear nothing else, hear this ~ You have one chance to do this right. The odds of a player making it to the big leagues (as in one day) look like this: ~ 66% of 1st round picks ~ 50% of 2nd round picks < 20% of every other pick Don't be discouraged, you have already beaten the odds to be where you are at today. Just understand that you need to plan for your MLB draft signing bonus as if it could be the last money you earn in professional baseball. While there are countless things to think about, I want to discuss three key frameworks to understand. Taxes Taxes will be your single biggest expense. The good news? You can reduce them with proactive planning. You will play both state income taxes (state of residence) and federal income taxes on your signing bonus. ***Below is an estimate of a player paying 37% in federal taxes, 5% in state taxes, and 5% in agent fees. For a deeper dive into the role taxes play for professional athletes, check out my guide on tax planning for professional athletes. ***Note teams generally will withhold the minimum required amount on your paycheck (22%). You need to be proactively planning to set aside additional taxes that might be owed. Contract Language You want to be aware of exactly what your contract says. The vast majority of draft contracts and signing bonuses are structured as "true signing bonuses" but not all. For a true signing bonus, there has to be no duty to fulfill any obligations. As in the day you sign your contract you are entitled to that money even if you quit in year one. In legal terms, this is called the abandonment clause and should be a key consideration for every MLB draftee. Not only does it provide you with more guarantees it also opens the door to future state tax planning as a true signing bonus is taxed in your state of residence not where you are assigned. You will see a theme here ~ taxes. Our goal at Moment is to help our professional baseball players pay the lowest amount of tax possible. You have worked hard to put yourself in this position, let us maximize what hits your bank account. Payout Structure   Remember how earlier I said the standard contract structure is 50% in year one and 50% in year two? Well, that is standard but it is not required. In fact, teams have the discretion to move these numbers around and often will for top players. The reason this matters is twofold: The value of money today is higher than the value of money tomorrow. The amount of tax you pay can depend on how this money is paid out. The key here is making sure your on-field team (agent) is working with your off-field team (financial team) to ensure the best possible outcome for you. The MLB draft is as much about strategy as it is about talent. Teams are looking to accumulate the most talent at the lowest cost (dollars and draft capital) to acquire the best players. Said more simply, they have done this a time or two. I say that not to intimidate you but to open your eyes to how important it is to have a quality team around you. That includes your agency which is running point on negotiations and a financial team specializing in athlete wealth management to ensure your money is being maximized. If you are a family looking to better understand the MLB draft, schedule a call , and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. How many rounds are there in the MLB draft? In 2024, there are 20 rounds in the MLB draft. How are signing bonuses paid in the MLB draft? The standard signing bonus is paid 50 percent in 30 days and 50 percent the following calendar year. How are MLB signing bonuses taxed ? MLB signing bonuses are taxed at both the federal and state levels. The majority of signing bonuses will be taxed in the player's state of residence. What should players know about the money they receive in the MLB draft? Players should know that tax withheld on their paychecks may not be the correct amount. It is the player's responsibility to ensure proper tax payments and withholdings. We recommend players get tax projections done as their signing bonus comes in. How does Moment Private Wealth help MLB draftees? Our role in the draft process is to educate families about the financial elements of the draft and work with the players to maximize their signing bonus. Having walked in the player's shoes we know how hard it is to earn significant money in sports and our goal is to help players make the most of that. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Every April I get the same phone call. "Luke, you aren't going to believe what my CPA just told me I am going to owe in taxes." It is like deja vu every year. If this is you read every word of this blog. As specialists in wealth management for business owners, we have found tax planning for business owners to be the single biggest win for our clients. In this blog, we are going to give you a behind-the-scenes look at our tax planning strategies and implementation for business owners. Tax Planning for Business Owners Taxes are part of making money, but we never want to leave the government a tip. So how where do we start? We are going to walk through the tax planning process today and answer three key questions. How do taxes work? What tax strategies should I use? How to avoid an unexpected tax bill? Let's dive in. How do Taxes Work? We have all had car problems. You get that nasty yellow check engine light on and take your car to the mechanic. The first thing they are going to do is diagnose the issue. The way they do this is by reading the error code in the computer of your car that tells them the issue. They then explain the issue to you and strategies to fix it. Many people jump straight to the tax strategies without first understanding taxes. This would be the equivalent of your mechanic telling you it could be 100 different fixes without first diagnosing the problem. So how do taxes really work for business owners? There are typically two types of income categories. Ordinary Income - Earned income from your business. Capital Gains - Income generated from the sale of an asset. (Business, Real Estate, Stock, ect.) Ordinary Income: The US operates on a marginal tax system. This means that for every dollar you make you will not pay the same amount in taxes. Think about your ordinary income as the money you are making from operating your business. Below is an outline of the current federal tax brackets. Many people get caught up in the highest tax bracket they are in. For example, if you made $731,201 I hear people tell me they are paying 37% in taxes. (Married Example) In reality, they are only paying an average of 26.74%. This is because of the marginal tax brackets. Knowing your average tax rate will allow you to make better tax planning moves. Now that we understand how ordinary income is taxed let's look at capital gains Capital Gains: When you sell something that you own personally or in your business you will get taxed at capital gains rates. Capital gains have two different classes. The sale will be treated as a short-term gain or a long-term gain. Short-term gain - Held for under 1 year. Long-term gain - Held for over 1 year. Now the important part. How are they each taxed? Short-term capital gains will get taxed as ordinary income. You can simply revert back to the section on ordinary income and review the chart. Long-term capital gains are a different story. They receive special tax treatment and get preferential rates. When we are looking at different tax planning strategies timing can be the difference in millions of dollars saved in taxes. Anything you can push to long-term capital gains treatment will save you money in taxes. So if you are looking to sell an asset at a gain how much will be taxed? This is where tracking your cost basis is important. If you sell a building your business owns you will only pay taxes on the difference between your cost basis (What you paid for it - depreciation) and the sale price. Now that you know about the different types of income let's dive into something more fun. Tax Deductions: Tax deductions are a business owner's friend, but they need to be understood properly in order to maximize the benefit. The most famous tax deduction for a business owner is buying an SUV over 6,000 pounds. Everyone has seen their friend go to the dealership in December because they could "right it off". Let's look at what they really mean. In 2024 you expect to make $1,000,000 in total income. As part of your tax planning, you purchase a new company vehicle for $100,000. How much money does this really save you? Without Car Purchase. Income - $1,000,000 Taxes - $294,966 With Car Purchase. Income - $1,000,000 Tax Deduction - $100,000 Adjusted Income - $900,000 Taxes - $257,966 You have saved $37,000 in taxes and spent $100,000 on a car. So remember, a tax deduction only reduces your taxable income. We hope that this gives you clarity about how the tax system works. Now let's look at how we make tax planning decisions to never leave the government a tip. What Tax Strategies Should I Use? Tax planning is a never-ending game of chess. There are always moves to be made both today and in the future. How do we do that? We focus on two areas for tax planning. Future Year Tax Benefits - Strategies that help us pay less tax later. Roth Conversions Roth IRA Contributions Portfolio Optimization Present Year Tax Benefits - Strategies that help us pay less tax today. 401(K) Contributions Wage Optimization Tax Loss Harvesting So how do we know when to use a future-year strategy or a present-year strategy? It is my favorite answer. It depends. In order to determine which strategies to use it is about understanding where we are at today and where we are going in the future. Let's look at a real-life example that we can see both present and future year benefits pan out. A common situation we see for business owners is a high income for a sustained period of time with the culmination of a business sale. After the business sale, the income dramatically drops. Let's look at the case study of Joe. Case Study - Present Year Tax Strategy Joe is making $1,000,000 in his business and continues to get beat up by taxes. He is trying to determine what he can do to save money on taxes now because he is in the highest tax bracket. After reviewing Joe's tax return it is clear that he is not optimizing his salary to maximize his qualified business income deduction. Joe is paying himself the following between wages and distributions. W2 - $100,000 Distributions - $900,000 This will result in a $50,000 deduction for qualified business income. The simplified way to think about this deduction is the lesser of 50% of W2 wages or 20% of distributions. After reviewing the situation we switch his W2 wages and distributions. W2 - $300,000 Distributions - $700,000 This tweak results in a $140,000 deduction for qualified business income which will reduce Joe's taxable income by an additional $90,000. This alone saved Joe around $30,000 in taxes. Now let's take a peek at a future year strategy. Case Study - Future Year Tax Strategy Let's continue on with Joe. Joe ended up selling his business 1 year ago and his new hobbies don't pay him any income. This results in Joe moving from the 37% marginal tax bracket to the 22% marginal tax bracket. Joe has always invested in municipal bonds because they are tax-free and he was always in the highest tax bracket. With the dramatic drop in income, we reviewed if this was the best option moving forward. Current rates for taxable bonds are 6% while municipal bonds are paying 4%. After performing an after-tax yield calculation it is determined his municipal bonds are paying him a 4.7% taxable yield. This means that for every $1,000,000 Joe had invested in municipal bonds, he was leaving over $10,000 on the table. The solution is to optimize his portfolio by rebalancing from tax-free bonds to taxable bonds. As I discussed in investment planning for business owners this is a key consideration in a portfolio. There is no one-size-fits-all when it comes to tax planning for business owners. The key is to understand taxes are like a game of chess every move matters both for today and in the future. How to Avoid an Unexpected Tax Bill? One of the best qualities you can have as a business owner is seeing around the corners. You are able to make changes in your business before the masses see the new trends coming. The best advisors have the same skills but for your personal financial life. Avoiding the unexpected tax bill is all about being proactive vs reactive. So how are we proactive? It all starts with what has happened in the past. Typically when you file your tax return your accountant is going to give you estimated payments. Those estimated payments will be based on last year's income. Here is how it works. It is called the safe harbor contribution. What is the safe harbor contribution? 2023 Total Tax - $250,000 In order to avoid penalties and interest you need to meet the safe harbor contribution in this current year. 90% of the tax owned in your current tax year 2024 100% of the total tax paid in the previous tax year 2023 This is where business owners get in trouble. They are told in April to pay quarterly payments based on 2023 taxes, but you are having another great year and expect to make twice as much money. You get to the end of the year and ask your accountant for an estimate. Your accountant looks at your books and says wow you are having a great year you are going to owe a lot of money in taxes. We avoid this perpetual system by proactively looking at tax planning on a quarterly basis. Rather than waiting until the end of the year their needs to be constant communication with your team. If this isn't happening for you there is a tax surprise waiting around the corner. So remember tax planning doesn't need to be complex. At Moment Private Wealth we simplify tax planning to help you pay the least amount in taxes today and in the future. My encouragement to business owners is to start with the basics before choosing a strategy. Understand How Taxes Work. Build a Plan with Your Team. Execute that Plan. Taxes don't need to be complicated but you do need to have a plan. Without one you are sure to be stressed about taxes and leave the government a tip. If you are a business owner who is looking to find a financial team that specializes in you, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Are you a fiduciary? Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? W We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors? We are specialists in working with professional athletes and business owners. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes and business owners. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third-party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Clients can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team? W We believe in the power of the team. Our client teams consist of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. How do you choose investments for clients? As independent financial advisors, we can gather research and make recommendations based on all available options. We determine clients’ portfolios in partnership with some of the largest asset managers in the world. Each quarter, we have calls with teams of CFAs (Chartered Financial Analysts) to ensure our clients are receiving the most up-to-date strategies and recommendations. What does your average client look like? Our clients are nearly all athletes and business owners. Our average client has a net worth greater than $5M. The strategies, solutions, and planning that we implement have a high-net-worth and ultra-high-net-worth client in mind. How to pay less in taxes as a business owner? Taxes are going to be your largest lifetime expense. Our goal is to help you pay the least amount possible and never leave the IRS a tip. Our team of specialists understands this and works to reduce your taxes today and in the future. How do taxes work as a business owner? When you own a business you are going to get taxed in two ways. First, you will be taxed as an employee through the W2 wages you take from the business. Second, you will be taxed on the profits that your business earns. What are the best tax strategies for business owners? The best tax strategies can save you thousands if not millions in taxes. The best strategies will be specific to your needs and goals. Strategies most business owner consider take into account what they expect to make in income this year as well as in future years. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

I remember my first big league spring training. The veteran leadership had let us know the Major League Baseball Players Association was coming in the next day for our spring meeting. A naive 18-year-old, I had no idea what that meant or what we would be talking about. That meeting opened my eyes to the sacrifices former players had made to pave the way for current players. Everyone sees the ever-increasing salaries but what many don't see is the greatest pension allowed under US law. That's right the MLB pension provides the highest benefits an employer can provide. In this blog, I am going to break down everything major league baseball players need to know about the MLB pension. MLB Pension Plan The MLB pension plan dates back to 1947 and is currently the longest-running pension plan in all of professional sports. The plan is one of several benefits MLB players and coaches receive as part of the CBA (Collective Bargaining Agreement) negotiated with MLB owners. The plan has roughly 10,000 participants that can be broken down into three groups ~ active players, retired players, and players receiving benefits. One of the biggest challenges for Major League Baseball players is navigating significant early career earnings with decades as a former player. The MLB pension which can be taken as early as age 45 helps to bridge the gap for players. Retirement planning for professional athletes requires both planning expertise and niche knowledge to understand all the options athletes have. Here is everything you need to know about the MLB pension. Qualifying for the MLB Pension To qualify for the MLB pension, we must first understand service time. MLB service time is accrued for players that are on the active 26-man roster plus players on the MLB injured list. Players on the 40-man roster but not on the active roster do not accrue service time. To qualify for the MLB pension a player must have at least 43 days of MLB service time. 43 days of MLB service time equals one-quarter of one full year of service time. One full year of MLB service time is equal to 172 days. Once a player reaches 43 days of MLB service they become eligible to start collecting future pension benefits. With each additional quarter of MLB service time, a player continues to accrue pension benefits. At 40 quarters or 10 years of service time, a player maxes out MLB pension benefits. MLB Pension Benefits While most pensions are going away, the MLB pension continues to rise with the cost of living increases. The MLBPA is projected the yearly pension will rise by ~ 1.8% yearly. Example: A player earning $100,000 in yearly pension benefits can expect to earn $101,800 next year. Players can access the MLB pension at age 45 but at a reduced rate. To receive full pension benefits a player must delay taking it until age 62. In 2024, the current pension benefits (at age 62) are as follows: 43 days of MLB service time = $6,875 pear 1 year of MLB service = $27,500 per year 5 years of MLB service = $137,5000 per year 10 years of MLB service = $275,000 per year At Moment Private Wealth, we provide MLB players calculations on when would be most optimal for them to take their pension benefits. MLB Pension Considerations One of the biggest challenges professional athletes face is the length of "retirement". With that average professional athlete retiring before 30 years old, this leaves decades to live off of your career earnings. The MLB pension can help players fill the retirement gap. Understanding pension and league benefits is a critical piece of mapping retirement for professional baseball players. As you begin planning for what a future pension looks like you need to understand two main factors: Cost of living adjustment - The MLB pension has a COLA increase each year that currently stands at 1.8% per year. This means that your monthly pension amount will increase each year at a rate of 1.8%. Early access adjustments - The MLB pension allows player access as early as age 45 but not without consequences. A full pension, 10 years of MLB service at age 62, is worth $275,000 per year. That same pension accessed at age 45 is $86,636 per year. Whether you accrue 43 days of MLB service time or more than a decade, the MLB pension should be a part of your retirement planning as a Major League Baseball player. You need to understand all the factors and how they affect your overall plan. - While MLB players have countless public benefits, players need to understand the private benefits. Time and time again, we see athletes unaware of the benefits they have including the MLB pension. I can't stress this enough but you don't want to be working with a financial team learning on your situation. You want to be working with a specialist in athlete wealth management. Done correctly these benefits can provide you millions of dollars in lifetime benefits. If you are a Major League baseball player looking to better understand the MLB pension, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. How much is the MLB pension? Players receive pension benefits starting at 43 days of MLB service and maxing out at 10 years of MLB service time. In 2024, the MLB pension maxes out at $275,000 per year. When can players access MLB pension benefits? Players can start accessing MLB pension benefits as early as age 45 with full pension payouts happening at age 62. How does Moment Private Wealth help professional baseball players? We are specialists in working with professional athletes. We help professional baseball players with income planning, tax planning, risk management, estate planning, and investment management. We also help MLB players navigate the MLBPA benefits plan package including the MLB pension. Does Moment Private Wealth help professional baseball with retirement planning? Yes, outside of navigating MLB pension benefits, Moment Private Wealth helps professional baseball players with tax planning, retirement planning, and optimizing their entire financial life both during and after their playing career. Where can I find out more information about my specific pension benefits? Major League Baseball players can contact the MLBPA for more detailed answers to the MLBPA benefits plan package. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

In 2015, my Dad was running a business in my hometown of Saint Louis, Missouri. He had been running this business for over two decades. In late 2015, he received the news that he had an aggressive form of cancer, and only a few short months later he had sold his business and passed away. He hadn't planned to sell his business. I saw firsthand the downsides of not having a plan. Business exit planning is the plan he needed. A business exit plan is only one part of financial planning for business owners, but it is an important part for those looking to exit their business today or in the future. In this blog, we are going to look at everything you should consider to have a successful business exit plan. Business Exit Planning Business exit planning is for every business owner. Why everyone? Because just like death and taxes are a part of life so is exiting your business. At some point in time in the future, you will no longer run your business. Having a plan will give you clarity on running your business today and what an exit could look like in the future. Here are a few questions we hope you get clarity on when creating a business exit plan. Can I afford to sell my business? Who are the best buyers for my business? How do I maximize the value of my business? Do I have the right people on my financial team? How do I want my employees to be taken care of? A succession plan is a way for you to answer all these questions on your terms. When you have a plan in place it allows you to minimize downside risk and avoid any surprises. There is no one-size-fits-all in a business exit plan, but I can tell you firsthand that not having one is not good. After all, you have worked your entire life to grow your business. My first-hand experience is that you want to maximize it. Let's look at the components of a winning exit plan. 4 Keys to a Business Exit Plan Who is going to buy my company? What people should help me sell? What is my business worth? What is my ideal post-sale life? 1) Who is going to buy my company? The first step in a successful exit is knowing who is going to buy your company. There is no right or wrong answer to who should buy your business, but there are many pros and cons. Understanding the pros and cons of each type of buyer is a key to success. These are the three most common buyers of businesses. Internal Sale Private Equity Strategic Buyer Internal Sale: An internal sale typically means you are selling to one of two people. The employees of your business or a family member outside of the business. When you are selling internally there are a few pros and cons that are helpful to review. Pros: Without outside capital in a business, it allows the new owner to focus on the business without any outside pressures. The focus can be on growing the businesses on your terms. Another pro is that it allows you to reward those employees who have been on the journey with you and helped create the success that you have today. Cons: An aggressive growth path is often more difficult when keeping the business internal. When you are spending profits that could be going into your pocket it makes growth decisions more difficult. This becomes even more evident when there is a new owner coming in. Lastly, the terms of these internal transactions typically favor the buyer. Often times they do not have tens of millions of dollars to hand you on day one. Private Equity There are many forms of private equity. Private equity often gets a bad rap, but the reality is it can provide significant benefits. Let's look at the pros and cons of private equity. Pros: When dealing with PE more often than not you are going to get a large check when the deal closes. PE firms raise money and have to go out and deploy that capital. Unlike an internal transaction with an earnout component often PE deals provide a healthy amount of the transaction price up front in a lump sum. Partnering with PE also comes with operational experience. They have the background and capital to help take your business to the next level. Cons: When you get a large lump sum this comes with giving up control. It can be challenging for business owners to no longer have full decision-making power in their business. The way a PE company is going to make money is by reselling it. This is important to remember because once you are PE controlled decisions will be made with the intent to sell your business again in the future. In some instances these decisions are made with a short-term mindset vs a long-term mindset. Strategic Buyer: A strategic buyer is a competitor in your space that is buying up the competition. When considering an acquisition of a strategic buyer there are many pros and cons. Pros: They are in your business. It is often easier to set clear guidelines for goals when the buyer is already working in your industry. There is also an opportunity for shared services. Shared services often create greater operational efficiencies which increases profit margins. This can be a win-win. If your strategic buyer isn't backed by PE you will also have the benefit of approaching decisions in the long-term vs the short-term. Cons: When you are looking to sell to a strategic buyer one of the glaring problems is they now know you are for sale. This can create all sorts of issues within the industry if the deal doesn't close. Another con to strategic acquirers is that you lose your independence. You go from flying your pirate flag to theirs. If independence is important to you this should be heavily weighed. Each one of these buyers provides a unique value proposition. Selling to your family could maximize the legacy you leave. Your employees have provided tremendous value. How will you reward them? Private equity can maximize your financial outcome, but it may come at a cost. Strategic buyers could be a great way to get a second bite out of the apple. There is no one right buyer, but there are wrong buyers. Knowing your goals will help create a win-win for everyone involved. 2) Who is on your team? When you are looking to create a business exit plan you need to know who is on your team. Your team needs to consist of experts in the space. Remember you may only get one shot at this. It is not the time to DIY. It is the time to find experts that can help you. Here are the people that need to be on your team. M&A Attorney Tax Professional Sell Side Banker Financial Planner Let's unpack what each of these roles provides for you. M&A Attorney: Legal is going to be one of the most valuable members of your team. When you are going through a transaction you want to look for an attorney who specializes in M&A and has LEAD deals of your transaction size. There is a difference between helping with a transaction and leading a transaction. Get clear on what experience your M&A attorney has from the past. During the negotiation process with the buyer, they will be a key team member to help you navigate the complexities of the transaction. Tax Professional: This will likely be your largest tax bill. Having a tax expert will be the key to not leaving the government a tip. We recently had a business owner sell and they didn't have the right players on their team. This mistake cost them hundreds of thousands of dollars in taxes because of the way the deal was structured. Remember now is not the time to DIY. It is the time to surround yourself with experts. Sell Side Banker: If you plan to take your business to market having a sell-side banker is key to getting maximum value. Your banker is going to help you navigate who may be the best buyer for your goals. They can help you understand that there are multiple components to getting the ideal outcome for you. Financial Planner: The financial planner is there to put all the pieces together. Their role is going to be coordinating with the team and ensure you have the right team members on the bus. If we were an MLB baseball team think of yourself as the owner of the team and the financial planner as your GM. Not only will they manage the team but they will also help you decide the number you need. You may have all, some, or none of these members on your team today. That is ok. The job of your team is to work together and help you find the right people for you. When you are building your deal team ensure that each member is holding each other accountable. Without teamwork, you can often find cracks in the armor. 3) What is your number? Every exit plan needs a number. A key to making the right decision for you is knowing what that number is. Flying blind into these conversations without a number in mind will make the decision to sign on that dotted line even harder. Having a number can eliminate many of the emotions of feeling like you are getting a good deal. The first step to determining your number is knowing what does it cost be you. Often overlooked by business owners is the cost of being them. After years of running their business, you will typically find many personal expenses that have become business expenses. There is nothing wrong with this if you factor it in. If you haven't you could be in a hurt of trouble. Here are the questions I would consider during the exit planning process. What does your lifestyle cost? Will this lifestyle change after you exit? How much of your personal life is funded by the business? Whether your exit plan is for a $1,000,000 exit or a $100,000,000 exit you will have anxiety around your exit if you don't know the answer to these questions. Getting in front of your planning is the key to a stress-free transaction. The second step for having your number is when you negotiate. Any great negotiator will tell you the importance of having non-negotiables. By having a number it allows you to create terms to help you meet your goals. When you get into a transaction you will find that many acquirers are much more worried about the terms of the deal than they are the number in the contract. Having your number allows you to make unemotional decisions in the negotiation process. Once you have determined the number you need it is time to think long and hard about what you want your life to look like after selling your business. 4) What is your ideal post-exit world? Remember that you hold all the cards. You don't have to sell. This is why considering your ideal outcome in advance is key. Your ideal outcome is going to drive your decisions and your team's decisions. Clear direction will allow you to zero in on the right buyers. Are you looking to fully exit the company? Are you staying on board with the company? Are you looking to partially exit the company? Your ideal outcome can only happen if you have thought about these questions in advance. Remember time will kill your deal. If emotions are high and time is short that is not the time to make these types of decisions. Days of your life will be saved in this process by avoiding conversations with the wrong buyers. Knowing what you want will allow you to better negotiate the terms of your deal. If you want to take a step back in the business you will probably want more money up front and less in the form of an earnout. In doing this you can expect to get a lower total value. If you want to grow the business aggressively and are willing to bet on yourself you will get a much higher valuation. Typically these deal structures come with large earnouts that only get paid if you succeed. This goes to show there is no right or wrong way to approach your ideal post-exit world, but it will help you get a better outcome if you think about it in advance. At Moment, we help clients create business exit plans. We want to take into account these four key areas in order to ensure you have confidence before, during, and after your exit. ------------------------------------------------------------------------------------------------------------------------------ Our goal at Moment is to give you the tools to have a successful business exit. If you are an entrepreneur who is interested in succession planning, schedule a call, and talk with a Moment founder. Get in Touch With An Advisor Here are some answers to questions I received frequently about this topic. Are you a fiduciary?  Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors?  We are specialists in working with professional athletes and entrepreneurs. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third-party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Clients can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team?  We believe in the power of the team. For most of our clients, their team consists of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

On April 15th, 1912 the unsinkable Titanic sank in the Atlantic Ocean. It was reported that as the ship took on water the show on board went on. The pianos continued to play and the servers tended to dinner requests. This led to the catastrophic events that followed. These events happened due to a lack of preparation. The Titanic left port with enough lifeboats to hold 1,178 people. The Titanic carried 2,224 passengers. Risk management for business owners is how you avoid being the Titanic. There are many components to wealth management for business owners but none more important than managing risk. Without the proper risk management strategies you could be a sinking ship. In this blog, we are going to look at how to identify and take action on risks in your life. Risk Management for Business Owners Risk management for business owners is a topic that is often neglected. It isn't sexy and only matters once the fire has already started. Moment Private Wealth helps clients see around the corners to protect themselves from big and small risks that they don't know exist. Today we are going to look at six real-life examples that could sink the ship. These types of risks show up in two flavors. Business Boat Sinkers Personal Boat Sinkers Let's dive in. Business Boat Sinkers Your business is the lifeblood of your balance sheet. It has taken a decade for you to become an overnight success and it could take one wrong move to take it all away. Let's look at the real-life examples we are going to explore today. Business Boat Sinkers: Forced to Sell Your Business Lawsuit Crushes Your Business Taxes Force G2 to Sell the Business The single best way to protect against risks that you are unaware of is to get educated. I see far too often owners bury their heads in the sand hoping that nothing will happen. These are the business owners who find themselves in trouble when the unthinkable happens. Each one of these situations is a nightmare to deal with, but thankfully there is a solution to protect you from each of these events. Business Boat Sinkers Situation 1 - You are forced to sell your business. Example You have been building your dream company for decades. You have built an amazing team and business with your business partner. One of you focuses on the vision while the other keeps the train on the tracks. One day your business partner informs you that he has a terminal illness. Later that year he passes away. Unfortunately, you do not have the capital to buy his shares of the business from his spouse and are forced to sell your business. Solution The most common solution is to execute buy/sell insurance. This is an insurance policy that is intended to pay out in one partner's death to buy his or her shares. What Should You Do Today The first thing you should do is pull out your buy/sell agreement and read it. If you don't have one you should reach out to your advisory team to coordinate having one drafted. If you do find it you should ensure you understand what it says and how it is funded. If it is not clear to you reach out to Moment to get a second opinion. - Situation 2 - A lawsuit crushes your business. Example You are running a high-growth HVAC company. What started in your basement is now a multi-million dollar business. As you grew the business you focused on the main thing ~ growing revenue and serving clients. Unfortunately, you never looked at your commercial liability coverage until it was too late. Your company installed a hot water heater incorrectly at a home and it burned to the ground. Fortunately, no one was home but the homeowner is bringing a lawsuit. Solution Your business isn't stagnant. The proper liability coverage needs to be reviewed on an annual basis to ensure it is growing as your business is growing. What Should You Do Today The first thing you should do is pull out your commercial insurance coverage. You should review your liability coverage to ensure you are properly covered. If you have questions your first point of contact should be your insurance agent or advisory team. If anything is unclear reach out to Moment to get a second opinion. - Situation 3 - Your tax bill forces the next generation to sell the family business. Example Your little startup is now an enterprise. Your goal has always been to pass the businesses down to the next generation. You believe you have covered all your bases. You spoke with your corporate counsel. You have executed a succession plan with your kids, but you never considered estate taxes. One day you suddenly pass. At that time your business has been valued at $50,000,000. Without proper planning, this leaves you with a $15,000,000 tax bill at your death. The only way to pay this tax bill is for the next generation to sell the family business. Solution Proper estate planning will avoid this situation. Often times the best solution is to have a life insurance policy in place to pay your estate taxes. You can learn more about estate planning for business owners here. What Should You Do Today The first step is to pull out your personal financial statement. A recent one you have sent to your bank for lending should work. Time to calculate your net worth. This should include the value of your businesses, real estate, and all liquid assets less any debt. If your total net worth is over $13,610,000 you have this problem. I would recommend reaching out to your estate planning or advisory team to discuss the best next steps. If you aren't confident in the answers you are getting you should reach out to Moment Private Wealth for a second opinion. Risk isn't always a fun topic to discuss. It normally requires facing all the things that could go wrong. Don't wait until it is too late. If you are a business owner ensure your risk management plan avoids these business boat sinkers. Personal Boat Sinkers I want you to open up Google. Type in your name and the city you live in. On the first page of Google, you will likely find your name and the name of your company. Unfortunately being a business owner has put a target on your back. The more success you have the more you have to lose. These are three common personal boat sinkers we see impact business owners. Personal Boat Sinkers: Personal Lawsuit Costs You Millions Family Loses Your Income Creditors Take Your Assets Although these situations aren't fun there are many ways to protect yourself from getting in hot water. Let's dive into each. Situation 1 - A liability lawsuit costs you millions of dollars. Example You are a busy entrepreneur. This doesn't stop things from breaking at your house. One day your roof is leaking and you text your neighbor to see if they have a recommendation. They send you their "guy" who is an expert and is a low-cost provider. This "guy" shows up at your house pops on your roof and slips. Fortunately, he only has a broken leg, but after googling your name he decides to sue you. Little did you know that he has no business insurance. Solution There are two key ways to protect yourself from these instances. The first is to ensure your home liability coverage has the proper coverage. Typically we see this being $500,000 of personal liability coverage. The next layer is an umbrella policy to protect you in the event of excess liability. What Should You Do Today You will need to find your property and casualty declaration pages. If you are a Moment client you can find these in your vault on our mobile app. If you can't find these documents reach out to your insurance agent. They will provide you with a document for your home, auto, and umbrella. You are looking at your total personal liability coverage. If this number is lower than your total net worth it is time to have a conversation. - Situation - A family loses the income to fund their lifestyle. Example You have done the hard thing. You quit your W2 and started a business. During this time your income has grown to the point that your wife can stay at home with the kids. It is an amazing feeling to be able to support your family and allow them to have a great lifestyle. This is the first step in your business, but your business still relies on you working in the business. Unfortunately, you suddenly pass away and your income goes with you. Solution The simplest way to protect your family from loss of income is life insurance. Typically we see term insurance as the most cost-effective way to protect from this tragic event occurring. What Should You Do Today You should first review your current coverages. Ideally, your current life insurance coverage should be able to replace your current income need and pay off all debt on your balance sheet. This is more of an art than a science. Once we have determined how much coverage is needed we will provide quotes for the additional coverage recommended. This will allow your family to get educated on how much insurance you need and at what cost. - Situation - Creditors take the assets you have passed to the next generation. Example You have spent your entire life protecting your family. Part of your plan was an estate structure to protect your assets. After you pass away your children receive all of your assets. One important detail you left out was a co-trustee for asset distribution. Unbeknownst to your son he needed to leave his assets in life trust to keep his creditor protection. After a failed startup venture the creditors can access the funds you passed down to him. Solution In order to receive creditor protection your assets need to be in life trust for your kids. This can be an easy win but needs to be set up and communicated to the next generation. What Should You Do Today When you had your estate plan drafted you should have received an estate plan flow chart. On that flow chart, you are going to try to identify if your assets are going directly to your children or heirs. If setup properly there should be a trust that is created for each one of your children at the time of transfer. If you aren't sure how to identify this I recommend you reach out to your estate planning attorney or Moment for a free review. Life as a business owner is full of obstacles that can sink your boat. The best way to ensure that your boat is ready for the open ocean is to inspect it regularly. Financial planning for business owners should be the same way. A review of your risk management plan on an annual basis should be part of this process. So remember, getting educated is only the first step in protecting yourself. Take action today and ensure you don't have personal or business boat sinkers in your life. ----------------------------------------------------------------------------------------------------------------------------- Our goal at Moment Private Wealth is to help you avoid these common mistakes. This is why we help with risk management for business owners. It isn't enough to know what tools to use but you need a team to help you implement. If you are an entrepreneur who is concerned about a potential risk, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Are you a fiduciary?  Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors?  We are specialists in working with professional athletes and entrepreneurs. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third-party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Clients can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team?  We believe in the power of the team. For most of our clients, their team consists of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. How do you choose investments for clients?  As independent financial advisors, we can gather research and make recommendations based on all available options. We determine clients’ portfolios in partnership with some of the largest asset managers in the world. Each quarter, we have calls with teams of CFA (Chartered Financial Analysts) to ensure our clients are receiving the most up-to-date strategies and recommendations. What does your average client look like?  Our clients are nearly all athletes and entrepreneurs. Our average client has a net worth greater than $10M. The strategies, solutions, and planning that we implement have a high-net-worth and ultra-high-net-worth client in mind. Why should I consider hiring Moment Private Wealth?  Great question! But first, let us explain why you shouldn’t hire us. If you’re looking for an advisor who will pitch shiny object investments or be a “yes man” you are in the wrong place. Why? Because we believe in being truth tellers and only giving advice that we take ourselves. The investments, strategies, and planning we do are all things our advisors do with their own money. If you are an athlete or entrepreneur interested in things like lowering your tax bill, investing smarter, and finding a trusted partner we might be a good fit. Does Moment Private Wealth sell insurance? Moment does not sell insurance but advises on all insurance for clients. This allows us to be free of conflicts when recommending certain types of insurance products. How do insurance agents get paid? Insurance agents are paid a commission based on the type and amount of a product you purchase. It is our advice that you always ask the agent to list out their commission for any product you are considering. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Ok, let's be real hiring a qualified financial advisor as a professional athlete feels like finding a needle in a haystack. It is estimated there are more than 300,000 financial advisors (loose term) in the United States today. Some are ok Some are bad Some are good Few very are qualified to help professional athletes Look, let's eliminate the handful of financial advisors that are not doing good work. That leaves us with a handful of financial advisors that are good people with good intentions. For the average family, that might be enough. For a professional athlete, we haven't even reached the starting line. When it comes to athlete wealth management, the only advice you should be looking for is level-three advice. They have helped others do it. (Level 1) They have done it themselves. (Level 2) They have walked in your shoes. (Level 3) Look I don't say this lightly, your choice of a financial advisor is arguably the most important one you can make for your career. The reason? This team will be with you before, during, and after your playing career. They will be tasked with making sure you maximize every dollar you earn. Money mistakes are a professional athlete are not like stubbing your toe, it is like breaking your leg. The impact is wide-ranging and there is no going back for a second chance. In this blog, I am going to share the questions to ask, things to consider, and the red flags I wish I knew about choosing a financial advisor when I was a top 10 MLB draft pick. Wealth Management Questions For Professional Athletes When I first met with a financial advisor, the only question running through my head was, "What does this person even do?" My family didn't grow up with financial advisors and the first time I even heard of one was when the MLB draft was approaching. I remember meeting, thinking the individual was nice, and asking no questions. I left thinking, well he seems like he won't take advantage of my situation so I guess I will hire him... Athletes, this is not how you should conduct your process of finding a financial advisor for professional athletes! The good news is to do it right you don't need to be an expert ~ you just need to be armed with the right questions. Here are seven to ask as a professional athlete ⬇️⬇️⬇️ 7 Questions Professional Athletes Should Ask Financial Advisors 1. What do you specialize in? If you look at most financial advisor websites, they have an older couple walking on a beach or some picture of an abstract lighthouse. You browse over to the section about who they serve and it looks like something in line with the menu at the Cheesecake Factory (literally can choose anything). That my friends is not specialization and not what you are looking for. Consider if you had an injury. You would go to a doctor that specifically worked with professional athletes. Depending on the type of injury or necessary procedure you would then be referred to a specialist that only works on that specific injury. Just like your doctor, you want your choice of a financial advisor to be just as specialized. You are the best in the world at what you do, they should be too. 2. What areas do you cover? The first thing everyone thinks of when it comes to financial advisors is investments. Rightfully so, investments and your subsequent returns are very important. Yet, I would argue that before you ever invest a dollar there are several other areas that need to be covered first. Things like: Income Planning Tax Planning Risk Management Estate Planning Financial Team Coordination/Structure To me, this is one of the biggest areas that is missed. The reason for this is twofold. One it takes a great deal of work to navigate each element of this and two it takes deep expertise to understand how this works in athlete wealth management. At Moment, we cover our athlete's entire financial life. If it has a dollar sign in front of it, we want to be helping to educate and guide you. 3. Do you invest the same way as your clients? You might be thinking, well ya duh of course... Let me tell you, that many financial advisors sell clients one investment solution only to do something completely different in their investment portfolio. Now look, I am not saying it has to be the exact same. Let's be real your goals, situation, and circumstances are unique and require a customized solution. That being said, the general frameworks, ideas, and solutions should look similar. After all, if they are good enough for you they better be good enough for your financial advisor. 4. What are all the costs involved in working together? My two rules when it comes to fees are this: You should understand them and you should know the total costs. By understanding them, I mean your financial advisor should be able to write those fees in crayon for you. When I say total costs, this means the costs of the advice, products, solutions, and any additional fees that might apply. My industry (financial services) is awful when it comes to clarity around fees. I see time and time again professional athletes paying substantial hidden costs. At Moment, we have one simple fee clients pay. We receive no kickbacks (very common), sell any commissionable products (layers of hidden fees), or receive any trails from investment companies (often never seen). Our job is to provide our clients with a multiple of the value for the fees they are paying us. 5. What is your advisor-to-client ratio? The average financial advisor serves north of 100 families. This model can work well for the average consumer but remember you are far from average. Remember when asking what areas a financial team covers that their service model should be reflected in their client-to-advisor ratio. Our model for professional athletes means we are involved in everything from large purchases to car shipping to the investment portfolio. This level of client service means that we limit the number of clients an advisor is serving. It means more focused time serving each professional athlete. 6. What does your average client look like? Nick Saban has this famous line that you need to find the right people and put them in the right seats. As a professional athlete, you need to consider that you need a firm with the firepower to serve you today and into the future. The future might mean early retirement or it might mean a $100,000,000+ contract. Our average client has a net worth greater than $5,000,000. I say this because it means the planning strategies, conversations, and solutions are designed with high-net-worth and ultra-high-net-worth clients in mind. As a professional athlete, your financial plans are decades in the making. You want to make sure the team you hire has the ability to serve you today and in the future. 7. What qualifies you to work with professional athletes? I love this question. I love it because it will give whomever you are talking to a chance to share what they value as the most important thing. It could be investments. It could be their experience. It could be their credentials. Well here is my answer: First and foremost we are experts. At Moment, our teams for professional athletes include a CFP (Planning), CPA (Tax), CFA (Investment), CLU (Insurance), and JD (Legal). The best part? we find the best people across the country to integrate into this team. You aren't limited to just the person down the hall. Second, we have walked in your shoes. I have signed the big contract. I have felt the anxiety around the money. I have navigated all the highs and lows that come with professional sports. I have successfully navigated my finances. I have transitioned from my playing career to a successful second chapter. Third, we built this company with you in mind. Every decision we have made at Moment has been with a laser focus on our ideal client, the professional athlete. Our meeting schedule, service model, and communication are all designed for your specific needs. Remember how I said you don't need to be an expert to find a qualified financial team? If you use these seven questions you will be ahead of 99% of professional athletes. To me the vetting doesn't stop there, you also need to watch out for red flags. Trust me when it comes to athlete wealth management there are plenty. Here are my three biggest ones to watch out for ⬇️⬇️⬇️ 1. Fear Based Selling 🚩 "If you don't do x, y will happen." I see this all the time with professional athletes. Look it makes sense because often we are coming into this money with little education. We have a target written all over us and the last thing we want to do is make a mistake. Do not let anyone sell you any product/solution based on fear. You need to understand what you are buying, why you are buying it, and all your available options. 2. Name Dropping 🚩 We are dealing with someone's entire financial life. This is not public information and neither should their client list. I watched advisors pitch me while name-dropping other athletes they worked with. A few things to understand, just because they say they work with that person doesn't mean they actually do. Even if they do it doesn't make them a good advisor. If they are name dropping to get you as a client they will be selling you to the next client. ***I always recommend when the time is right to ask to speak to a current client and have them share their experiences. 3. Pitching Investments Only 🚩 Investment returns matter, they matter a lot. Yet, they are just one piece of your entire financial picture. Your cash flow will be uneven. Your taxes will be your largest lifetime expense. Your liability exposure will be heightened as a public figure. These are all key components of athlete wealth management and you want to make sure that your financial team is covering more than just your investment portfolio. You are in the top 1% of your craft as a professional athlete. You want to make sure that your financial advisor is also in that top 1%. It can feel overwhelming but use this to narrow it down: Level 3 Advice 7 Questions Above Listen For 3 Red Flags Discussed Doing just those three things will set you off on the right path. My goal since retiring from baseball has been to educate as many people about personal finance as possible. This blog is another effort in that journey, I hope you enjoyed reading it as much as I enjoyed writing it! If you are a professional athlete looking for a financial team specializing in you, schedule a call, and talk with a Moment founder. For further resources, check out my YouTube as it has deeper dives into many of the challenges professional athletes face. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Are you a fiduciary? Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors? We are specialists in working with professional athletes and entrepreneurs. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third-party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Clients can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team? We believe in the power of the team. For most of our clients, their team consists of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. How do you choose investments for clients? As independent financial advisors, we can gather research and make recommendations based on all available options. We determine clients’ portfolios in partnership with some of the largest asset managers in the world. Each quarter, we have calls with teams of CFA (Chartered Financial Analysts) to ensure our clients are receiving the most up-to-date strategies and recommendations. What does your average client look like? Our clients are nearly all athletes and entrepreneurs. Our average client has a net worth greater than $5M. The strategies, solutions, and planning that we implement have a high-net-worth and ultra-high-net-worth client in mind. Why should I consider hiring Moment Private Wealth? Great question! But first, let us explain why you shouldn’t hire us. If you’re looking for an advisor who will pitch shiny object investments or be a “yes man” you are in the wrong place. Why? Because we believe in being truth tellers and only giving advice that we take ourselves. The investments, strategies, and planning we do are all things our advisors do with their own money. If you are an athlete or entrepreneur interested in things like lowering your tax bill, investing smarter, and finding a trusted partner we might be a good fit. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Done correctly players can get hundreds of thousands in retirement plan contributions, countless tax savings, and access to lifelong health care. Retirement planning for professional athletes is a mix of understanding specific information and how it connects to your life. I had seen the big contract numbers. I had heard of the opportunities Major League Baseball players had. Yet, one thing I didn’t understand was the MLB benefits plan. What benefits do players get? How are those benefits calculated? How do players access those benefits? What things should players be aware of? I remember hearing my agent talk about all the benefits I was getting by being put on the 40-man roster but I didn’t get it. In this article, I am going to break down everything Major League Baseball players need to know about the MLB retirement plan in 2024. MLB Retirement Plan To unlock the full benefits of the MLB retirement plan you must do two things: ·       Be on an MLB 40-man roster ·       Be on an MLB active roster (26 players) Think about this like levels of a game. The first level (40-man roster) unlocks certain benefits. The second level (MLB active roster) unlocks additional benefits. The longer you play at those levels the greater the benefits. The 40-Man Roster Benefits The 40-man roster is the roster of players eligible to be added to the active roster. This is a collection of the team's starters, role players, fill-in pieces, and top prospects. Players who achieve 40-man roster status are eligible for certain employee benefits through the Major League Baseball Players Association. The biggest benefit is the MLB player “Active” health care plan. This is arguably one of the greatest healthcare plans in the world. It is a privately run plan administered through Aetna. The plan calls for minimal out-of-pocket costs to players. The premiums (cost of the policy) while active on a 40-man roster are covered by the teams. One important note for players to understand is once they are added to the 40-man roster it is critical to add all family members. While active players are automatically added upon their addition to the 40-man roster, their families are not. It is the player's responsibility to ensure their family is added. As financial advisors for professional athletes, we ensure all player's families are correctly added to the proper forms. Active Roster Benefits The active roster consists of 26 players as of 2024. These are players that are eligible to play in regular-season games. To be on the active roster you must first be added to the 40-man roster. While healthcare benefits are great, the real benefits kick in for players on the active roster. To understand how players access these benefits we have to understand MLB service time, how it is calculated, and how it affects players' benefits. MLB Service Time MLB service time is the time a player receives for each day they are on the active roster. While an MLB season is 162 games, service time is calculated based on the number of duty days in a given year. To acquire a “full season” of MLB service time a player must achieve 172 days on the active roster. For context, the typical MLB season has between 180 and 190 duty days. Why does this matter? The three biggest benefits active players receive are: ·       401(k) Benefits ·       MLB Pension Benefits ·       Healthcare Benefits Post Playing (more on that later) Each one of these benefits starts to kick in based on service time. Here are the key service time figures and benefits received: 1 Day: One day of MLB service time provides players eligibility to contribute that day’s paycheck to the MLB 401(k) Plan. This plan is administered through Vanguard. *As of 2024, Minor League Players are also eligible for 401(k) contributions. 43 Days: 43 days of MLB service time is equal to one-quarter of a season. This milestone for a player gives them team contributions to the 401(k) and MLB pension benefits. 172 Days:172 days of MLB service time gives a player of 1 full year. This milestone gets a player closer to arbitration (approximately 3 years of MLB service time) and MLB free agency (6 years of MLB service time). 4 Years: 4 years of MLB service time provides players with access to the health care plan after playing. While it switches and players have to pay the premiums this is an incredible benefit for retired players with four years or more of service time. 10 Years:10 years of MLB service time provides players with full pension. This is the holy grail for any MLB player. The full pension is currently $275,000. - Now that we understand MLB service time and how it effects player’s benefits let’s dive into the details of each benefit a player can receive. Remember the three biggest benefits active MLB players receive are: The three biggest benefits active players receive are: ·       401(k) Benefits ·       MLB Pension Benefits ·       Healthcare Benefits Post Playing 401(k) Benefits In 2024, a player can contribute $23,000 in “pre-tax” money to his 401(k) plan. This means he would receive a tax deduction for his contribution. Example: A player making $1,000,000 contributes $23,000 to the plan and has a taxable income of $977,000 instead of the full $1,000,000. A potential tax savings of more than $8,500 assuming the 37% federal tax bracket. Unlike most company 401(k) plans the MLB 401(k) plan provides no match. Instead, teams provide direct contributions to players 401(k) plans. The exact number is calculated based on the luxury tax teams’ pay. *The luxury tax is a calculation based on a team going over certain spending thresholds. In 2023, teams contributed $10,000 per quarter (43 days) of MLB service time a player had. Remember, how I said 43 days of MLB service time mattered? It is estimated by the MLBPA that in 2024 teams will be contributing even more to players' 401(k) plans due to the 2023 luxury tax bill. MLB Pension Benefits While most pensions are going away, the MLB pension remains. In fact, it is one of the best in the world. Each year the pension benefits increase to the highest allowable by law. In 2024, the current pension benefits are as follows: 43 days of MLB service time = $6,875 pear 1 year of MLB service = $27,500 per year 10 years of MLB service = $275,000 per year Players receive these benefits with each quarter (43 days) of MLB service time they acquire. To achieve full pension benefits players need to wait until age 62. Players do have early access to pension benefits at the age of 45. MLB players need experts in athlete wealth management to provide calculations on when would be most optimal for them to take their pension benefits. Health Care Benefits While every player added to the 40-man roster is automatically added to the MLB health care plan, certain service time thresholds provide additional benefits. Players who acquire four years of MLB service time are eligible to stay on the health care plan in retirement. Players who choose to stay on the plan are required to cover the premium (cost of the policy) payments. A few key notes on the policy: ·       Enrollment/Changes to the policy are due by opening day. ·       There are three policy options (active, base, and buy down). ·       Each policy option provides varying benefits and premium amounts. ·       If a player elects to move off the plan, he cannot get back on the plan. Players must understand this benefit and how it works. As financial advisors for athletes, we run yearly analyses on the three options for players to ensure our athletes are choosing the correct plan. To understand just how powerful this benefit is for players let's compare two plans. The first is an open marketplace (Public plan) and the second is the “Buy Down” MLB plan. I use this example because I utilize the “buy down” plan for my family of six. - While MLB players have countless public benefits, it is critical MLB players understand the private benefits. Time and time again, we see athletes unaware of the benefits they have. Athletes must work with a qualified financial team that specializes in working with Major League Baseball players. Remember, done correctly these benefits can provide hundreds of thousands and sometimes millions of dollars in lifetime benefits. Done incorrectly players can be left not understanding the options available to them and missing out on these benefits. - If you are a Major League baseball player who is looking to better understand the MLBPA benefits, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. How many days does a player need to qualify for benefits? The majority of benefits including the MLB pension start with 43 days of service time on the active roster. How does a player qualify for the MLB health care benefits? Players need to have at least four years of MLB service time in order to stay on the MLB health care plan after retirement. Do players have to pay for health care benefits in retirement? Yes, players have to pay for health care premiums after their playing career ends. How much is the MLB pension in 2024? Full pension in 2024 is $275,000 per year for players that accumulate 10 or more years of MLB service time. A player is credited $27,500 per year in pension benefits for one year of MLB service time. What age can players take the MLB pension? MLB players can take the MLB pension as early as age 45 but to get full pension benefits a player must wait until age 62. Can players roll over the MLB 401(k) in retirement? Retired MLB players can roll over their Vanguard MLB 401(k) plan into an IRA. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Did you know the National Football League has a retirement plan? Since 1993, the league has increased its commitment to its players' financial security post-career. As an NFL player, you must understand all the frameworks to consider when navigating retirement as a professional athlete. For NFLPA benefits, it starts with understanding the Bert Bell/Pete Rozelle NFL Retirement Plan. Here is what you need to know. What benefits do players get? How do players know if they are eligible? What do players need to do to access those benefits? What should players look out for? There is a lot to focus on while on the field, but understanding the benefits you receive for being a part of the 53-man roster is just as important. In this article, I am going to break down all the things players in the National Football League need to understand about the NFL Retirement Plan in 2024. NFL Retirement Plan Before we jump into the specifics of the benefits afforded NFL players, it is important to understand who is eligible. Just because you sign a contract does not mean you receive the benefits of the NFL Retirement Plan. You must earn a "Credited Season" first in order to be eligible. So what is a Credited Season? A Credited Season means you were on one of the following rosters for three or more regular or post-season games: Active Roster Inactive Roster IR (Injured Reserve) PUP (Physically Unable to Perform) Similarly, if you are released injured or receive an injury settlement for 3 or more games, you earn a Credited Season. From a Credited Season to Becoming Vested Oftentimes, you will hear the phrase "Benefits for Vested Players." Earning a Credited Season is the first step in being eligible for the NFL Retirement Plan. However, in order to be entitled to those benefits, you need to earn three or more credited seasons. Simply put, three or more Credited Seasons means you are now "vested." Think of it like levels to a game. -First, you have to make the 53-man roster. -Second, you have to be on said roster for 3 or more games. -Third, you have to earn 3 or more Credited Seasons. These Credited Seasons open the doors to the benefits negotiated under the NFL's Collective Bargaining Agreement (CBA). Benefits for Vested Players Now that you have met the requirements, what is included in the NFL benefits plan? First, it is important to note that the benefits may vary depending on when you played and how many credited seasons you earned. Specifically speaking, if you played prior to 1993, these benefits will be different than for active players. For active-active players the current benefits include: Pension Health insurance for 5 years once finished playing Player Annuity Program Capital Accumulation Plan Tuition Reimbursement Disability Benefits Life Insurance Health Reimbursement Account Plan (HRA) 401(K) Severance Former Player Life Improvement Plan 88 Plan - Health Reimbursement Plan for Vested Players with Certain Illnesses There is a lot involved in each of the benefits above. Athletes need to work with a specialist in athlete wealth management. In the rest of this blog, I am going to outline the four biggest benefits players receive in the NFL Retirement Plan: NFL Player Annuity Program NFL Second Career Savings Plan (401k) NFL Player Severance Plan NFL Pension Plan NFL Player Annuity Program One benefit afforded to players is the NFL Player Annuity Program. Also known as the PAP, this is a deferred compensation plan. In other words, it provides eligible players with additional retirement savings. Here is how it works... Money Is Put In: The club contributes money into an account on your behalf. Money is Invested: The money is then invested and managed by investment professionals. You Become Vested: After three or more Credited Seasons, you become vested. This means you are the full owner of the money and the NFL cannot take it back from you. You Take the Money Out: When you are no longer an active player and age 45 or older, you can take out the money. *Note: money withdrawn prior to turning 59.5 years could result in a tax penalty. There are a few additional questions that need to be addressed. How do I become vested in this program? How much is the team contributing? How do you become vested? Essentially, you begin to receive contributions to the PAP after three credited seasons. Once you are vested, no longer an active player, and at least 45 years of age, you are eligible to receive these payments. It is important to keep in mind that if you defer payments, these payments must begin by age 65. What is the team contribution? The contribution varies by the years played in the NFL. For instance, players will receive the following amounts if they played from 2011-2020 and earned four or more Credited Seasons: 2011-2013 = $65,000 per year 2014-2017 = $80,000 per year 2018-2020 = $95,000 per year Here are a few additional things to keep in mind. Depending on the number of Credited Seasons you earn, you can have balances in two different accounts: "Tax-Qualified (TQ) Account": Money is contributed "before tax," which means you pay taxes when you take the money out. This starts accruing after your second Credited Season. *This is earned after 3 Credited Seasons or you are employed as a player at age 55 "Nonqualified (NQ) Account": Money is taxed in the year it is contributed and comes out tax-free. This starts accruing after you earn your fifth Credited Season *You are always vested in the balance of a Nonqualified Account. It can never be forfeited Additionally, it is important to understand how to take the money out. Here are the four ways to do so: Single Lump Sum - this is a one time payment for the entire balance. TQ - available as soon as you are eligible NQ - only after age 45 Partial Lump Sum - this means you receive payment of part of the balance. TQ - available as soon as you are eligible NQ - only after age 45 Installment Payments - this means you will receive the payments in equal installments. TQ - available as soon as you are eligible NQ - annual payments until you reach 45 (or a date of your choosing after that date) Annuities - the balance is used to purchase an annuity from the insurance company. If you have questions or want to take advantage of this benefit, you can call the NFL Player Benefits Office at 800.638.3186 or visit their website at NFLPlayerBenefits.com NFL Second Career Savings Plan (401k) One of the greatest benefits your employer can provide is a 401(k) plan. In the National Football League, this is called the Second Career Savings Plan (401k). This 401(k) is an asset that needs to be utilized. In 2024, you can contribute $23,000 in “pre-tax” money into you 401(k) plan. Outside of saving for retirement, this means you would receive a tax deduction for your contribution. For example, let's say you make a salary of $1,000,000 in 2024 and contribute the max $23,000 into your 401(k) plan. Your taxable income is now $977,000 instead of $1,000,000. This means you have a potential tax savings of more than $8,500 if in the 37% federal tax bracket. Additionally, the club will contribute to your 401(k) as an active, inactive, IR or PUP list player if you have two or more credited seasons (excludes practice squad players). *Note: this excludes 2020-2023. What does this mean? This means that the team you play for will contribute a "2-for1- match" to your account. In other words, for every dollar you contribute up to that $23,000 max, the club will contribute an additional two dollars into your account. That is FREE MONEY! Here is a breakdown of the matching contributions the NFL has proposed for the upcoming seasons: NFL Player Capital Accumulation Plan (CAP) If the 401(k) isn't incentive enough, the NFL has also created the NFL Player Capital Accumulation Plan (CAP). This provides NFL players with additional saving opportunities for retirement. Unlike the 401(k) where you can deposit your own money, your CAP account receives money only from team contributions. The amount depends on the number of Credited Seasons earned. Here is how it is broken down: 1 Year = $0 CAP Contribution 2 Years = $2,500 CAP Contributions 3 Years = $2,500 CAP Contributions 4 or More = $40,000 CAP Contributions *If you meet the requirements for 4 or more seasons, this amount will increase to $42,000 in 2026, $45,000 in 2027 & 2028, $48,000 in 2029 and $50,000 in 2030 NFL Player Severance Plan Time is undefeated and your time as a player will come to an end. But the time you put into the sport can pay you back at the end of your career. The NFL Severance Plan is a plan that benefits those players who are credited with a certain number of seasons in their football careers. First, severance pay is the compensation an employer provides you at the end of your employment. This is no different in the NFL. The National Football League pays you a lump sum payment at the end of your career. You might be thinking...how much? Well, it depends. The number of Credited Seasons earned and the years you played will determine how much you receive. Here is the breakdown: 1989-1992 = $5,000 per year 1993-1999 = $10,000 per year 2000-2008 = $12,500 per year 2009= $15,000 per year 2010 = $0 2011 = $15,000 per year 2012-2013 = $17,500 per year 2014-2016 = $20,000 per year 2017-2019 = $22,500 per year 2020-2023 = $0 2024-2025 = $35,000 per year 2026-2028 = $40,000 per year 2029-2030 = $50,000 per year Ok, great. So when is the severance paid and how do I apply? The severance is paid by the team you earned your last Credited Season with. It is paid to you in a lump sum and sent to you on the last day of the calendar quarter when you are no longer with the team. Notify your Plan Administrator at 800.635.4625 if interested in applying. One other important thing to remember... For income tax purposes, the severance pay is included in taxable income when distributed. NFL Pension Plan Additionally, the NFL Player Retirement Plan provides a pension. Generally, this begins between the ages of 55 and 65. So what are your benefits? Again, it depends. There are three factors considered: How many benefit credits you have earned When you choose to begin receiving retirement benefits The form in which you choose to receive your retirement benefits To start, you earn a benefit credit for each Credited Season you are awarded. *Remember, you need 3 or more Credited Seasons to be eligible I have outlined this for you below: Credited Seasons Benefit Credit 1982-1992 255 1993-1994 265 1995-1996 315 1997 365 1998-2011 470 2012-2014 560 2015-2017 660 2018-2020 760 After age 55 (or later if deferred), you receive a monthly amount. That amount depends on multiple factors including: Your Benefit Credits Years of Service Average Salary The average NFL pension is ~$43,000 per year. Next, you decide when to receive the retirement benefits. This can be done the month beginning after your 55th birthday or can be deferred. If you do defer receiving the retirement benefit, the amount of your monthly benefits can increase substantially. What Next? Making it to the NFL is a feat in and of itself. Why not take advantage of the benefits afforded you? All too often, we see athletes unaware of the benefits they have earned. At Moment Private Wealth, we make sure you are up to speed on these benefits. If you are in the National Football League and want to better understand the NFLPA benefits, schedule a call with a Moment Founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. How does a player qualify for the NFL Retirement Plan?   A player must have earned a minimum of three "Credited Seasons" to be eligible. Have I earned a Credited Season?  Players need to be on an active roster for three or more regular or post-season games to earn a "Credited Season." How do I become vested?  All players on the active, inactive, IR, or PUP list for three or more "Credited Seasons" are considered vested. What age can players take the NFL pension?  Players can start receiving their full pension at the age of 55. If deferred until 65, the benefit is significantly increases. Is there a 401(k) match provided by the NFL?  Yes! If a player contributes to their 401(k), the NFL will contribute a "2-for1- match." ___________________________________________________________________________________________________________ *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

I had more money on paper than ever before, yet I had more nerves than ever before. Yeah, that was me right after retiring from an 11-year MLB career. You see I had set out to avoid being one of the statistics we all see in the news, "Athlete loses everything". What I missed in my crusade to not become "that guy" was that retirement planning for professional athletes entails far more than just being smart with money. Wealth management for professional athletes is part art (emotional side) and part math (numbers side). Combine those two things with planning strategies specifically for professional athletes and you have a recipe for success. Everyone sees the big numbers you can earn as a professional athlete...what do I see? The decades of life you have left after closing the chapter on your playing career. In this blog, I am going to talk about the emotional side and the numbers side of retirement planning for professional athletes. Retirement Planning For Professional Athletes The magnitude of a decision to stop something you have been doing your entire life cannot be understated. I remember being on a plane coming home from South Korea and thinking, "This is it". That one decision led to a host of new problems that needed to be solved. You see, retirement planning for professional athletes is an endless Rubix cube. The range of outcomes for players is endless but there are certain frameworks to guide your decision. As a professional athlete, your financial team needs to understand both the elements of retirement planning for professional athletes ~ emotional and numbers. Let's dive into both ⬇️⬇️⬇️ Retirement Planning (Emotional Side) What makes the news is when a former professional athlete is facing financial troubles post-career. Yet, what often doesn't make it is the fact that those troubles stem from the emotional side as much as the numbers themselves. Let me say it out loud for everyone, transitioning to a post-career life for us as professional athletes is hard. Like really really hard... I say that because you shouldn't feel alone in this journey. It is hard for everyone and anyone who says otherwise probably isn't giving you the whole truth. For me, it took months of thinking, a few years of checking boxes I didn't want to, and pushing through many days of doubt to be in the place I am today. That place is filled with purpose, hope for the future, and a business exploring one of my passions. Here are the three biggest emotional challenges I had to navigate (and how to think about each). When To Stop I remember when I first got drafted, a fresh faced 18 year old in locker rooms with journeymen in their mid-thirties. I thought one of two things ~ "I can't believe those guys are still playing" or "That will never be me". Fast forward 11 years and I was that guy... a journeyman heading to South Korea looking to further my career any way I could. At the end of another subpar season, I found myself asking that dreaded question, "Should I stop or keep going?" You see I had seen guys continue for years only to find themselves in independent ball essentially paying to still play yet on the flip side I had seen many of those same guys revive themselves. For me, it comes down to this simple question: "Is my heart still in the day to day grind it takes?" If it is then keep going, you have plenty of time "to do normal life". If it isn't then be real with yourself, you can have an incredible second chapter. You see stopping your playing career is a personal choice. I stopped at 29 when I had certainly had more physically in the tank yet mentally my heart wasn't there anymore. I would have been doing myself and the game a disservice by continuing on. Shutting Off The Tap We were in San Francisco and I remember checking my bank account and seeing my first two-week paycheck hit as a big leaguer ~ tens of thousands of dollars. I remember thinking...so in two more weeks I will get this again. The money tap was flowing and it can quickly create a false sense of reality as a professional athlete. One of the biggest challenges many athletes face (me included) is when the tap shuts off and you start pulling money from your nest egg. I cannot stress this enough, you need to work with your financial team to gain a clear understanding of how you will access money in the next stage. For us at Moment, we think about athlete's money in three buckets: War Chest Growth Portfolio Aspirational Bucket I will tell you this now, no matter what the numbers say, it will feel weird not making a paycheck. You need to be ready for that and clarify what money is in which investments. What Is Next Remember how I posed the question, "Is my heart still in the day to day grind it takes?" Well, the biggest reason most athletes play on even when the answer to that question is no is that answering ~ "What is next?"....... is even scarier. I have to think it is a bit like a college student ready to graduate without a clear job lined up. The jaws of life are staring you in the face and the only thing for certain is uncertainty. Here is my 5 step framework for determining what is next: Dip Your Toe In ~ You do not have to have the next several decades of your life figured out weeks after moving on. You do need to be taking baby steps in that direction though. Lean In ~ The biggest mistake I see athletes make here is failing to be vulnerable. Look you don't have it all figured out and the minute you let those around you know...they want to help. Be Curious ~ Make a list of everyone in your network that you deem "successful". Ask them if you could buy them lunch and learn more about their story. Remember step 2 (lean in) and ask them this question, "If you could do it all over again, would you?" That one question will provide you incredible insight into their current role, the path to get there, and if it is something worth exploring. Skills Over Money ~ If you can swing it financially, take the first role that allows you to gain skills not the one with the highest comp package. You will thank yourself in a few years. Go All In ~ It will take work (a lot of it). There is no easy path to carving the second chapter as a professional athlete. You need to find something you can commit to (just like you did sports). The frame in which I think about the second chapter is this: Imagine sitting around the fire pit in 20 years and the conversation turns to what you do. I want to be talking about what I am doing now, not the stuff I did (while still cool) 20 years ago in professional sports. Athletes do not underestimate the emotional side of retirement planning. Moving on from your sport will hit you like a ton of bricks ~ that is normal. Just understand it is up to you to start carving out the next chapter. Retirement Planning (Numbers Side) The first few years of retirement as a professional athlete are everything. If you can nail the first 3-5 years it will compound for decades into the future. The reason is simple ~ establishing a clear framework for saving, spending, and investing money in this next chapter is everything. If I have learned anything guiding professional athletes into retirement it is this ~ no two situations will look the same. On top of that, your situation will continue to change and evolve through the years. While there are countless things for professional athletes to consider with retirement planning, here are the three key building blocks. The Snowball Picture this....you are pushing a snowball up a mountain, as it nears the top it is heavy, hard work. Yet as it peaks the cliff it starts tumbling down the other side picking up snow along the way. The hardest thing to do in wealth building is to create the initial snowball. Do that while you are playing and watch it pick up speed into retirement. The number one thing I want you to understand as a professional athlete is you will need more money in your snowball than you think. Remember our goal is to keep the snowball intact (and growing) while you in retirement. To do that, we need to determine the "safe withdrawal rate" or how much money we can use every year without our snowball getting smaller. A good baseline for a professional athlete is 3% per year. Example: For every $1,000,000 an athlete has saved they could spend $30,000 per year without touching the initial principal. ***There are endless scenarios here that are specific to each athlete but I want you to understand this point ~ you need more than you think. Inflation is real. Your time horizon is long. The nest egg needs to support your entire life. The Tax Game As a professional athlete, your largest lifetime expense is your tax bill. Chances are you have been camped in the top tax bracket (37%) for much of your playing career. Well, the good news with retirement is those big tax bills are about to come down. Your income will drop (at least at the start) giving you the optionality to position your money for the future. Some of the most common moves we see our athlete clients use when nearing or in early retirement are: Roth Conversations Taking Capital Gains Repositioning Investments Bunching Together Donations (end of career) Switching Bond Incomes (tax-free vs taxable) The list is endless so understand that you have the opportunity when nearing or in retirement to save serious money off your lifetime tax bill. It is why I can't stress enough working with specialists in athlete wealth management. Understand this ~ not all investments and investment accounts are the same. They are each taxed differently, treated differently, and should be positioned differently. Doing this right early in retirement will help you keep more of your hard-earned money. Source of Income We serve athletes across the spectrum of earning money in the second chapter. Some want to Some need to Some have the option to Whether you are an athlete retiring with six, seven, eight, or nine figures in your nest egg you need to understand sources of income. The two biggest reasons are this: Taxes matter Supplemental income matters Income coming from your investments will be taxed at capital gains rates. Income coming from traditional sources (W2 and 1099) will be taxed at ordinary income rates. Capital gains rate max out at 20% (plus 3.8% NIIT) Ordinary income tax rate maxes out at 37% (federal) How you are "earning" the money you will ultimately spend in retirement depends heavily on how it is taxed. The second piece is supplemental income. We know we will have some (or most) of our income coming from our nest egg. Yet many athletes underestimate how big of an effect supplemental income can have. Example: An athlete with $10,000,000 saved has a baseline spending of $300,000 per year. If he earns $50,000 in supplemental income for work in retirement that increases spending by nearly 20%! Athletes I say this because I run across clients who think, "Oh a little extra income won't make a difference"...it does! The types and amounts (even if small in your mind) make a huge difference in retirement planning for professional athletes. You see when you retire from professional sports, this weird thing happens. Everyone around you assumes opportunities will be plentiful, yet the reality is your phone has never been more silent. That is why retirement planning for professional athletes is about as tough as hitting a breaking ball spinning at 3,000 rpm (for those non-baseball people that is an elite breaking ball). You see one thing only to realize it is going in a different direction. Time and time again, I see professional athletes overwhelmed by the process without a place to turn. Frankly, that is one of the biggest reasons I founded Moment Private Wealth ~ To help professional athletes navigate the same complexities I faced before, during, and after my playing career. If you take one thing away from this post, take this ~ your "retirement" from sports is just the entry into a second chapter of your life. One that can be as big as your first chapter. It starts with understanding that this is the starting line, not the finish line. If you are a professional athlete looking for more confidence in your retirement schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Are you a fiduciary? Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors? We are specialists in working with professional athletes and entrepreneurs. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third-party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Clients can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team? We believe in the power of the team. For most of our clients, their team consists of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. How do you choose investments for clients? As independent financial advisors, we can gather research and make recommendations based on all available options. We determine clients’ portfolios in partnership with some of the largest asset managers in the world. Each quarter, we have calls with teams of CFA (Chartered Financial Analysts) to ensure our clients are receiving the most up-to-date strategies and recommendations. What does your average client look like? Our clients are nearly all athletes and entrepreneurs. Our average client has a net worth greater than $10M. The strategies, solutions, and planning that we implement have a high-net-worth and ultra-high-net-worth client in mind. Why should I consider hiring Moment Private Wealth? Great question! But first, let us explain why you shouldn’t hire us. If you’re looking for an advisor who will pitch shiny object investments or be a “yes man” you are in the wrong place. Why? Because we believe in being truth tellers and only giving advice that we take ourselves. The investments, strategies, and planning we do are all things our advisors do with their own money. If you are an athlete or entrepreneur interested in things like lowering your tax bill, investing smarter, and finding a trusted partner we might be a good fit. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

When I was a kid one of our family activities was going camping, and I quickly determined my favorite part of camping. Playing with fire. I loved every aspect of the fire. Starting the fire, stoking the fire, burning things in the fire.  You get it… I was that kid at the campsite. It was all fun and games until one day I left the fire unsupervised and caught the campsite on fire. Debt management for entrepreneurs is the same as a campfire. You start off respecting the fire until you grow too comfortable and get burned. Managing debt is an invaluable part of financial planning for business owners. It is a tool that can be used to accelerate growth, but it can also be a burden that eventually burns your business to the ground. In this blog, we are going to look at all of the areas you need to be aware of when it comes to debt management for business owners. Debt Management for Entrepreneurs Debt is a tool to incorporate into your business and personal finances.  If you understand how to use it properly it will provide the leverage you need.  Used improperly it will get you stuck in a rut that can feel impossible to dig out of. We are going to break our thoughts into two distinct categories. Personal Debt: Credit Cards Mortgages Business Debt: Lines of Credit Bank Debt Let's dive in. Personal Debt I am a believer that all debt is not bad. There are others out there that would tell you all debt on the balance sheet is bad. The Dave Ramsey followers. The reality is if all people listened to this advice families collectively would be in a better spot financially. Why? Because most people take on too much debt and do not have earning ability to pay off that debt. We are writing this blog with the understanding that you have excess income and a decision to make on how to allocate those funds.  One of those decision points is what to do with debt on your personal balance sheet. Let’s start with the most straightforward debt discussion. Credit Cards: Credit cards are an amazing tool when used properly. The first step to using credit cards is to rename them.  I prefer to use the term deferred payment cards over credit cards. This is exactly how this tool should be used. Every month you defer your payment until the end of the month. At the end of the month, you pay off the credit card in full. Under no circumstance should you leave a balance on your credit card. There are two primary reasons why. Interest Rates – Typically these cards will have interest rates over 20%.  Paying this much in interest is NOT a good financial decision. Credit Score – Every day you don’t pay off your credit card you hurt your credit score. Your credit score is what allows you to get better terms on debt you may need such as a mortgage or car loan. Credit cards are a fantastic tool to earn rewards and points. They must be used responsibly. They cannot be used to fund the life you want to live. Abusing credit cards in this way will only get you in trouble. Mortgages: Your first big debt was likely the mortgage you took out on your home. I know this was the case for me and my family.  Mortgages are our first look into the grey area.  Before we talk about how to make this decision let's take a look at the different types of mortgages available. Fixed Rates: Fixed-rate mortgages are the most common home loan. Typically these come in 15 and 30-year terms. This means the bank will give you a loan that you have the right to pay off over the course of the term. The bank will amortize the loan over the course of 30 years. Variable Rates: Adjustable rate mortgages (ARMs) come in all different terms.  These are common for business owners or families with income that varies. Banks love consistency they don’t love variability.  The rates on these mortgages will fluctuate at the end of your ARM term. For example, if you have a 7-year ARM your rate will move up or down after the 7 year period. How do we decide what to do with our mortgage? We look at these three factors. Interest Rates Liquidity Needs Peace of Mind Interest Rates: If you have a mortgage that was locked in a few years ago you probably have a 3% mortgage.  We are going to be less likely to want to pay this off now that rates have gone up.  The other consideration with your interest rates is how long you have been paying on your loan.  If you have a 30-year loan the amount of interest you are paying in year one is dramatically different in year 30. Consider this chart when we look at the amortization effect on payments being made at the beginning of the term vs the end of the term. Each payment made is $5,995.51 per month for 360 months, but depending on the date the amount of interest is significantly different. Payment 1 - $5995.51 Principal - $995.51 Interest - $5,000 Payment 360 - $5,995.51 Principal - $5,965.68 Interest - $29.83 This concept must be taken into account when considering paying off a mortgage. Liquidity Needs: When it comes to business owners the one thing you can’t run out of is cash.  We are always monitoring this when we look at paying off big pieces of debt like a home.  The last thing we want to do is pay off our mortgage only to realize we need the money out of our house.  This is part of the goal-setting process when we look at financial planning for business owners. Peace of Mind: This part of the decision is the nuance.  We have clients who are simply not comfortable having debt.  There is nothing wrong with that.  This often comes from personal experiences in their life.  The right decision isn’t always the one the spreadsheet tells you to make. Peace of mind is a factor that should be considered when you are looking at debt. So remember there is both good debt and bad debt on your personal balance sheet. The key to making the best decision is combining what the spreadsheet tells you with the heart.  This nuance will look different for each family. There is no one-size-fits-all. Business Debt Debt inside of your business and debt on your personal balance sheet shouldn’t be treated the same. Before you tell me I am wrong here me out.  Debt on your personal balance sheet will never make you money. Debt on your business balance sheet CAN make you money. The key to business debt is understanding that even though it can make you money it doesn’t always make you money. I have seen both sides. I have seen debt turn a small business into an empire, but I have also seen businesses go up in flames because of leverage (remember to respect the fire). This framework can help you ensure your business doesn’t go up in flames. Line of Credit: The line of credit (LOC) is your friend in business.  Typically they cost nothing to set up and give you quick easy access to capital.  The mistake most business owners make is they don’t set up a line of credit until they need it.  This comment is all too familiar. “Why would I need a line of credit we are cash flow positive every month.” If this is how you would respond to my question it means it is time to evaluate your LOC. The good news is that banks love giving out lines of credit when things are going well. You will hear me say this time and time again. The one thing you cannot run out of in business is cash. A LOC is your last line of defense. As you read this and think... this sounds great what's the catch? Here it is. With fast and easy comes better bank terms. With any negotiation, if you choose easy it typically means you aren’t getting the “best” terms.  This is the case for a LOC when it comes to interest rates.  Typically a LOC is going to have a floating interest rate that will increase or decrease as the fed moves rates. Business owners need to be aware of this. With the recent changes in interest rates, we have seen business owners burned by this. They have taken out a LOC and analyzed the payments they need to make to get it paid off. In their head, they believe the LOC will increase profits and have the debt paid off in no time.  What they didn’t keep in mind was the increase in debt service with the Fed raising rates. This is the situation that can get many owners upside down on debt. To recap a LOC is your friend and you should have one. If you don’t this should be an action item after reading this blog. Bank Debt: Traditional bank debt can be a wonderful tool for a business owner.  Unlike a LOC bank debt can provide you with a stable structure and a known cost.  Let’s look at the uses of bank debt along with factors you should consider. Uses: There are two primary uses for bank debt. Internal Growth External Growth Internal Growth: Businesses that grow typically need cash to grow.  I saw a recent example of a business owner who completed a large real estate build-out to set up their business for the next stage of growth. It would have taken years to build up enough cash to do this without debt. This is a great example of a responsible use of debt for internal growth. There was a clear vision that required capital to get there. A key understanding when using bank debt for internal growth is being a great storyteller. Banks don’t hand out millions of dollars hoping you will pay them back. They had out million-dollar checks to the businesses they believe will pay them back. If you are a business owner looking to grow understand that part of your role is to tell a great story to your bank. This will allow you to get better terms on the debt that you take. External Growth: Many of the best businesses in the world have used outside capital to grow externally through acquisitions. This has been the flavor of the week for the last few years with acquisitions becoming more mainstream. When you are looking at completing an acquisition the first step is understanding how you will fund the acquisition.  In a normal transaction, traditional banks will lend up to 2X EBITDA for senior debt. Senior debt is a fancy banking term that simply means the bank has priority to get paid first. Giving this right to the bank will allow you to pay them a lower interest rate than junior debt. It is typical for a transaction to have multiple levels of debt.  As you go further down the debt stack you will typically have to pay a higher interest rate.  These are economic factors to consider when looking at an acquisition. This is why you often see companies bring in “investors”. Investors will provide you capital for equity in the business which will reduce the economic stress the debt service may put on the business. Bank debt is a great place to look for building your businesses in the long term. It is the most tested way to get large amounts of debt for running and growing your businesses.  Understanding the game the bank is playing will allow you to get the best terms for your businesses. When evaluating your business debt or personal debt let this be your one takeaway. There are a million ways to skin the cat when it comes to debt.  The key to managing your debt is being disciplined and having a plan. The key to getting burned is taking on too much debt with no plan to pay it back. ----------------------------------------------------------------------------------------------------------------------------- Our goal at Moment Private Wealth is to help you reach your ideal outcome. At Moment Private Wealth we specialize in helping business owners have a plan for their debt. If you are an entrepreneur who is concerned about debt, schedule a call to talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Are you a fiduciary? Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors? We are specialists in working with professional athletes and business owners. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes and business owners. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third-party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Clients can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team? We believe in the power of the team. For most of our clients, their team consists of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. How much debt should I have in my business? Debt in your business is a tool that should be leveraged carefully. Without a proper debt management plan you could find yourself in trouble.  Your plan should include how you are going to pay off your debt.; What does your average client look like? Our clients are nearly all athletes and business owners. Our average client has a net worth greater than $5M. The strategies, solutions, and planning that we implement have a high-net-worth and ultra-high-net-worth client in mind. How do I pay less in taxes? Taxes are going to be your largest lifetime expense. Our goal is to help you pay the least amount possible and never leave the IRS a tip. Our team of specialists understands this and works to reduce your taxes today and in the future. Should I pay off my mortgage? Paying off your mortgage is an art, not a science. The key to this answer is understanding the science behind your mortgage and the art of knowing what is important to you. Why should I consider hiring Moment Private Wealth? Great question! But first, let us explain why you shouldn’t hire us. If you’re looking for an advisor who will pitch shiny object investments or be a “yes man” you are in the wrong place. Why? Because we believe in being truth tellers and only giving advice that we take ourselves. The investments, strategies, and planning we do are all things our advisors do with their own money. If you are an athlete or business owner interested in things like lowering your tax bill, investing smarter, and finding a trusted partner we might be a good fit. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

The elevator stopped and out I stepped onto a full floor overlooking Miami Beach. The view was epic but my mind couldn't take it in. I was there to "do my estate planning" ~ whatever that means. I sat down with my finance, watched a high-flying attorney walk in, and proceed to talk over my head for the next hour. I left that meeting feeling confused, a bit overwhelmed, and with a stack of documents I was supposed to review. I remember thinking, review what exactly ~ I have no idea what I am looking at. That was my first experience with estate planning as a professional athlete, ya not so great. Well since then I have been to countless estate planning meetings both for myself and for our clients. In this blog, I am going to talk through six things professional athletes should consider for estate planning. Don't worry, by the end you won't wonder what "estate planning" means like I did in that fancy conference room. Estate Planning for Professional Athletes Instead of thinking about estate planning as this big scary term consider this ~ all it really is protection and direction for the things you care about (assets, people, investments...). Picture a parking garage, where you get to put all of the things you care about. Come a big storm, your things are protected. Then picture if any of those things ever want to leave you have an attendant at the gate with a roadmap of where they should go. Come a time of change, your things have direction. I want you to remember those two terms ~ Direction and Protection. Life is full of surprises, let me tell you. If you had told 18-year-old me everything that was about to ensue in my sports career over the next decade I wouldn't have believed you. Yet even with all of those surprises, everything my wife and I worked hard to build has been protected and had direction (there are those two words again). This was due to proper estate planning. Not only that, we have a clear path to where the things we care about the most will go when we are not here. Ya, no fun to think about but the fact is we will all die. My favorite slogan certainly applies here ~ plan now or regret it later. In athlete wealth management, you want to ensure you have a financial team that understands the key components every athlete should consider when it comes to estate planning. Here are six ⬇️⬇️⬇️ 1. Revocable Living Trust What is it? A revocable living trust is the roadmap for all the things in your financial life. It is a legal document that you have drafted that allows you to put in nearly any direction you want. Direction for who gets your stuff Direction for how they get your stuff Direction for factors need to be met to get your stuff The beauty of a revocable living trust is you can change it at any time. It is the ultimate building block in estate planning for professional athletes. Why it matters? It matters for a few reasons: Provides further direction and avoids probate Provides additional protection (trust owns it, not you personally) Provides additional privacy (things can be titled in the name of the trust) Consider this, a typical bank account has your name on it and should be followed by a beneficiary. A beneficiary is the person that the account goes to if you die. It provides no further clarity if that person isn't there or is not able to receive that money. The good news ~ they have a built-in plan for that, it is called probate. The bad news ~ probate is the government's plan for your money (it is public and expensive) You want to avoid probate at all costs and a revocable trust is just the tool to help you do that. ***Pro Tip: A revocable living trust is a legal document. In order for your assets to be protected by that document you must properly retitle those assets after completion of your Trust. As financial advisors for professional athletes, we ensure all accounts and assets have the proper tilting after completion. 2. Pour-Over Will What is it? Remember how our revocable living trust is our foundational roadmap for all our important things? Well, consider our pour-over will to be an extension of that. It allows you to provide direction to things that can't have official tilting like investment accounts. It works in conjunction with your trust. Things that are not tilted in your trust but noted in your pour-over will flow (or pour over) into your trust upon your passing. Why it matters? It matters for a few reasons, chief of which probably being one you are not thinking of. The last thing you want is family and friends arguing over family heirlooms. That is where a pour-over will comes into play. You can put things like: Priceless Art Family Jewelry Career memorabilia ***Pro Tip: A pour-over will is one of those documents that we recommend updating the most often. As new favorite possessions come up, you want to make sure you are providing direction around who gets what. After all, you don't want family fighting over a World Series ring. 3. Healthcare Directive What is it? Think of a healthcare directive as a document outlining what you want to happen and who you want to make medical decisions should you not be able to. Look it isn't fun to think about this scenario but we either plan now or regret it later. The two key components are: Directive - What directions are you specifically giving? Power of Attorney - Who can provide direction to healthcare professionals on your behalf? Why it matters? While no one wants to talk about this stuff, the reality is you either make the plan or the government makes the plan for you. Upon turning 18, should there be no directive or power of attorney in place it can be left up to the hospital or physician on the next steps. I don't know about you but I wanted a trusted person in place to execute my wishes if I can't. ***Pro Tip: This needs to be someone that you trust but also has the emotional ability to act on whatever your wishes are. The reality is if your healthcare power of attorney or directive is kicking in, the situation is not going to be stress-free. 4. Financial Power of Attorney What is it? We just talked about the medical power of attorney and the financial power of attorney serves in much the same way ~ just for your money moves. This is someone who can pay bills, make financial decisions, and serve in a capacity you would want should you not be able to make financial decisions. Why it matters? Again, this isn't fun stuff to think about but it matters. As an athlete, it is paramount that you spend the proper amount of time determining who should be in this role. This person will have the ability to execute on your behalf. We have all seen the stories of athletes getting taken advantage of and often it is because they unknowingly gave power of attorney to someone. ***Pro Tip: The financial power of attorney can be a family member or close friend. I recommend considering a combination of someone wise with money and that you have the ultimate trust in. Remember you can always adjust this in the future, so choose for today not 10 years into the future. 5. Guardianship What is it? Guardianship is the legal term for who would care for your children (if still minors) if you were not able to. It also can provide that individual with details of how you want them cared for: Educational Desires Access To Certain Funds Guidelines For Raising Them It is a massive decision who is placed in this role for a professional athlete. Why it matters? I don't know about you but my four kids mean everything to me. The care of them if I wasn't there is of the utmost importance to me. For my wife and I, this was one of the biggest roles we had to think about in drafting our current estate plan. ***Pro Tip: You can make adjustments to this in the future. I say that because we often have athletes who think one person is the right fit today but might not be in the future. That is ok, this can be adjusted in the future. The key is making sure you have a financial team that is reviewing these documents on a regular basis. 6. Estate Taxes What is it? You pay taxes when you make money...and you thought that was it? No, no, no the government actually imposes a tax on dying if of a certain net worth. As it stands in 2024, an individual with an estate (all your assets plus life insurance) over $13.61M will owe estate taxes. Today that estate tax rate ranges up to 40%! Let me say that again... if your assets + insurance benefits total more than $13.61M in 2024 you will owe a tax for dying ~ a significant one at that. Why it matters? It matters for a host of reasons as a professional athlete. The estate tax laws are always changing. You can build a significant net worth at a young age. That $13.61M number is set to get cut in half by 2026. Proper estate planning can reduce or eliminate estate taxes ***Pro Tip: The sooner you start planning for potential estate taxes the better off you are as a professional athlete. You can start to get compounding growth (investment returns) outside of your estate. Said another way ~ you can grow your money clear of estate taxes if planned for properly. My promise to our professional athletes is they will never walk into an estate planning meeting like I did. Deer in the headlights, wondering what is going on here. We coordinate, educate, and are in everything estate planning meetings with our clients. It is our job to take legalize (you know what the lawyer says) and help it make sense. After all, we either plan now or regret it later. If you are a professional athlete looking for a financial team specializing in you schedule a call and talk to a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. 1. Does Moment Private Wealth help athletes with estate planning? Moment does not draft estate documents but we do help coordinate, advise on, and execute estate planning strategies for professional athletes. 2. Who does Moment Private Wealth use for estate planning? Moment has a vetted group of nationwide estate planning attorneys to help clients draft and execute on their estate planning needs. 3. Are you a fiduciary? Moment Private Wealth serves clients as a fiduciary 100% of the time. 4. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. 5. How are you different than other financial advisors? We are specialists in working with professional athletes and entrepreneurs. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.