You just had one of the best days of your life. You officially signed the big contract. You now have more money than you ever thought possible. More money in a year than most make in a lifetime. What if I told you 78% of professional athletes go broke within a couple years of retiring? I know what you are thinking...that would never happen to me. The reality is, it could be you if you don't plan from the start. In this blog, I am going to walk through the reasons professional athletes go broke. From Stoked to Broke - The Reason Professional Athletes Go Broke Professional athletes get paid handsomely and for good reason. 123.4 million people watched Super Bowl LVIII - the most watched production in the HISTORY of television. So yeah, professional athletes who draw that much attention should get paid. But why do so many go broke so quickly? First, it is important to realize your career as a professional athlete does not last as long as you think. We read about guys that have played forever...Derek Jeter, Lebron James, Peyton Manning. This is not the norm as most believe. An average career in most professional leagues does not last long. MLB = 5.6 Years NBA = 4.8 Years NFL = 3.5 Years It is a cutthroat business. My colleague, Jacob Turner, is no stranger to this. If you don't believe me, check out his story. Unlike most, Jacob played for 11 years in professional baseball. His healthy perspective on sports and finance led to his financial success today. As he puts it, "Money is a tool we all need in life but putting it in proper perspective is key." Most know they can go broke if they are not careful. They hear it from agents and teammates. They hear stories and see headlines. But it still happens. Despite all the warnings, professional athletes still fall into the trap. Why? Well, let's break it down. Common Mistakes That Lead to Bankruptcy There are no one size fits all stories when it comes to athletes and money. But there are many reasons professional athletes retire with no money. I am going to outline 5 that I see the most often. Sudden Wealth Syndrome Pressure to Support Others Poor Investments or Business Ventures Lifestyle Inflation Financial Mismanagement & Lack of Planning Sudden Wealth Syndrome Your dream of becoming a professional athlete is now real. You just signed your name for a ton of money. With that can come a lot of distress. You went from having no job, to signing a professional contract with large sums of money tied to your name. Oftentimes, this can lead to what we call Sudden Wealth Syndrome. While not a psychological diagnosis, Sudden Wealth Syndrome is a term that describes issues, stress, confusion and money mismanagement when coming into sudden wealth. To put this into perspective, the No. 1 pick in the NFL draft will SIGN his name for ~$27 million. The 31st pick (last pick in the 1st round) earns a signing bonus of ~$6 million. That is a ton of money and doesn't even include their actual salaries! Do you know what the minimum NFL salary for 2024 is? ...$825,000... Do you know what the average salary in the United States for 2024 is? ...$63,795... No wonder Sudden Wealth Syndrome is becoming more prevalent for professional athletes. Pressure to Support Others Another common reason professional athletes go broke is the pressure to support others. You are sitting there on draft night with all your loved ones. They have been there through the ups and downs. Your parents probably sacrificed everything to make sure you fulfilled your dreams. Your friends are now reaching out to you to congratulate you. It is not uncommon to want to give back to the community that gave you an opportunity. Oftentimes, professional athletes feel the pressure to give back to those around them. While admirable, it is important to keep things in perspective. I am not saying don't spend some of the sudden wealth to celebrate and support loved ones. But you need to understand that it can become a habit if you are not careful. The key is distinguishing between one-time purchases and lifestyle ones. The pressure to support "your crew" can become overwhelming without a plan. Poor Investments or Business Ventures Let's say you are thinking about your future and want to put your money to work for you. That is a great first step! But understanding what you should focus on is super important. Another main reason professional athletes go broke is their investment decisions. If you go on the internet, you will read headlines like: "Sports star headlines new investment platform." "MVP becomes part owner of a new sports franchise." "Top athlete among new investors in a rising brand ." It all sounds nice and dandy. What could go wrong? A LOT... Especially if you are new to the investment space. While I won't get into it here, I highly suggest reading The Moment Guide To Athlete Wealth Management. This will outline everything you need to know about investing as a professional athlete. Lifestyle Inflation I have outlined a few common mistakes professional athletes make that lead to bankruptcy. The number one reason professional athletes run into financial trouble is this: Lifestyle Inflation Lifestyle inflation is the idea that as you make more money, your spending continues to go up. This could include: Buying more cars Spending more on luxury items Upgrading to more expensive homes Let's face it, you are going to be surrounded by people who make a lot of money and also spend a lot of money. Spending money on the things above is not inherently bad. You should spend money on things that make you happy. However, knowing your limit is important. Morgan Housel has one of the more fascinating quotes about spending money. He states: "One of the most important financial skills is getting the goalpost to stop moving." In other words, spend less than your income grows. When you get in the habit of spending money, it is hard to stop. This is where lifestyle inflation creeps in. It can take over your life. You earned the money by your hard work. Don't let your lifestyle today dictate your future. Financial Mismanagement & Lack of Planning As a professional athlete, you put together plans constantly. You gameplan the opposing team. You eat right for optimal performance. You prepare your bodies to have the strength to be the best. You work with your teammates to implement the plan. Why does this have to be any different when it comes to your finances? One of the most common reasons professional athletes fall into financial trouble is a lack of understanding of their finances. You may have never been educated You may not know what to ask You may not know how to save or how spending impacts your future You may not even know how to emotionally deal with financial success Unfortunately, all of these things play a role in professional athletes going broke. So what can you do? Step 1 is enjoying your moment and celebrating with loved ones. You put in the hard work and deserve to congratulate yourself. Step 2 is not letting it snowball into an eventual problem. Step 3...well, that is where we come in. At Moment Private Wealth, we work with professional athletes to ensure they can hang up their cleats with peace in knowing their financial future is secure. ___________________________________________________________________________________________________________ If you are a professional athlete looking for a financial team that specializes in you, schedule a call, and talk with a Moment founder. 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 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.

I remember when I first signed. I thought I was invincible. I was 18 with millions of dollars coming my way and a clear path toward achieving my dream. Protecting my downside was the last thing on my mind. Yet, risk management for professional athletes is one of the biggest keys to building wealth. I talked all about why downside protection is important in our guide to athlete wealth management but it is also critical for all aspects of your life. The reason why is simple ~ Google your name. You will have more publicly available information than 99.9% of the population. That my friends, makes you a target. You are a walking dollar sign for the person with bad intentions. The good news is you can protect yourself. In this blog, I am going to talk through all the ways professional athletes can protect themselves through risk management. Risk Management for Professional Athletes Risk management has a fancy ring, so let's think about it a bit simpler. What are all the things that could go wrong? What do we have to lose if they do go wrong? What are the odds of that thing going wrong? What are the ways to protect myself in the event they do? Risk management is answering those questions. Look everything in life has risks but there are certain risks for professional athletes that can be avoided. The three biggest risks are something happening to things you own, your life, and your career. The three types of insurance we are going to discuss to protect against them are: Property & Casualty Insurance Specialty Insurance Life Insurance In athlete wealth management, you want to ensure you have a financial team that understands the nuances of what coverages professional athletes need. Property & Casualty Insurance Everyone always thinks of the big risks but I am always thinking about the small ones (that could become big). This is where property & casualty insurance comes in. This is coverages for things like: Cars Homes Excess Liability You know all the things that you think, "That won't happen to me." Before you gloss over this section understand this, property and casualty insurance is not created equal. As in just because you have car insurance doesn't make it all the same. As a professional athlete, you want the best coverage for the best price ~ not the lowest cost. - Car Insurance Risk Protected: Car insurance covers your vehicle, any affected vehicles, medical payments, and further liability. Key Factors: Car insurance typically reads like this amount covered per person/amount covered per accident/amount covered in property damage. Each state has a minimum coverage amount required by law. These amounts are often very low and athletes should consider far higher amounts. Example: If your car insurance reads 100/200/50 that means you have $100,000 per person in the event of an accident, $200,000 total per accident, and $50,000 in property damage. Let's imagine for a second you run into a new $110,000 Cadillac Escalade and total it. You would be potentially out of pocket $60,000 since your property damage is only $50,000. What I Have: As with everything we do, I eat my own cooking. The same thing I recommend to our athlete clients is what I do. I have 500 across the board for my car insurance. This means I have $500,000 per person, $500,000 per accident, and $500,000 in property damage. - Homeowner's Insurance Risk Protected: Your home is one of your biggest financial assets, homeowner's insurance protects both the structure and the contents. Key Factors: While there are a million factors to consider here I want to focus on just two. The replacement cost and the type of policy. Remember not all insurance policies are created equal. Your homeowner's policy will have a stated replacement cost. This means if your house burns to the ground this is the maximum the insurance company will provide you. It will also most likely be one of two types of policies, an HO3 or an HO5 policy. An HO5 policy is a higher-end policy that provides the homeowner with specific details that would be redone the way they were (think high-end brickwork or landscaping). ***There are endless clauses athletes need to ensure are correct for proper coverage. This is why we always review our client's policies. Example: If your replacement cost is $1,000,000, something happens, and the cost to rebuild exceeds that amount you will be out of pocket for the difference. What I Have: I have an HO5 policy that covers my home for more than the state value. The reason is simple, the additional benefits/peace of mind outweigh the slightly higher costs. *** Athletes should also have a renter's insurance policy for in-season rentals. - Excess Liability Risk Protected: Excess liability coverage or umbrella coverage is an overachieving form of insurance that covers your risk above and beyond your other policies. Key Factors: My belief is nearly everyone should have an umbrella policy as they are a cost-effective way to cover big risks. For many of our professional athletes, their policies are near their total net worth. Example: If you were to have a car accident causing serious injury and were sued. Your auto policy might cover you up to $500,000 but any judgment above and beyond that would be your responsibility. A properly structured umbrella policy covers that excess risk. ***For professional athletes you need to have your financial team that does a deep dive into any exclusions a policy might have. What I Have: I have a $10,000,000 umbrella policy as it is one of the most cost-effective ways to protect my family's wealth. Life Insurance In athlete wealth management, one of the biggest red flags athletes face is getting pitched life insurance they don't need. Say it with me, "Life insurance is a tool to solve a need." You have to have a need first. My number one rule for athletes is this: If you don't understand the costs, fees, and structure don't do it. I start with this because there is a lot of money to be made selling life insurance. With any solution that makes the professional a lot of money, it will be misused. Now this does not make it a bad product ~ I would say the vast majority of professional athletes will need life insurance at some point. The key is finding a true pro that specializes in risk management for athletes. Done correctly there are incredible use cases for life insurance. To illustrate when life insurance is needed, consider my personal use case: I went from having no one depending on me (draft day) to being married with four beautiful kids (10 years later). I want them to be protected should something happen to me. That is the goal of life insurance ~ transfer the risk from you to the life insurance company. Two Key Types: Term Life Insurance - This covers you for a certain period (think 10, 20, or 30 years). Permanent Life Insurance - This covers you for your entire life (assuming premiums are paid). What I Have: I have two term life insurance policies that would provide my family enough money to live the same lifestyle today if I wasn't here. I don't own any permanent policy as I currently don't have a need that a permanent policy would solve. There could be a need in the future in which a permanent policy could make perfect sense. Insurance is just that, insurance. You will be pitched countless "insurance ideas", always revert to rule number 1 ~ If you don't understand the costs, fees, and structure don't do it. The starting point for life insurance is determining your need. What risk do you want to eliminate? Then determine the best solution for you to solve that need. Specialty Insurance The single biggest risk any professional athlete faces is a career-ending injury. Your body and your skillset are your ability to earn income. While a typical high-earner might get a disability policy, your potential options need to be (and are) hyper-specific to you. Disability policies for professional athletes come in two types: Permanent Disability - An injury occurs that does not allow you to continue to play your sport. Temporary Disability - An injury occurs that does not allow you to play your sport for a certain period. There is incredible nuance in these policies, structuring, and costs. Professional athletes need an expert in athlete wealth management to determine the best options. The second form of specialty insurance athletes should consider is loss of value policies. A loss of value policy covers an athlete if they don't receive the future contract they expected. ***These often come into play before the draft or a contract year. Just like with disability policies, it is important athletes understand all the costs, structures, and provisions in a loss of value policy. These policies are one-off policies customized to the specific athlete. The language stated in the contract is key to understanding what needs to happen for an athlete to get paid. Specialty insurance for professional athletes is hyper-specific to an athlete's situation and not every athlete needs these coverages. The key is understanding your options, risk factors, and ways you could transfer that risk. No one thinks it will happen to them until it does (insert the risk). Yet, each year we see athletes face lawsuits, accidents, and other liabilities. The key is answering these four questions: What are all the things that could go wrong? What do we have to lose if they do go wrong? What are the odds of that thing going wrong? What are the ways to protect myself in the event they do? One of my favorite lines is ~ plan now or regret it later. That couldn't be more true when it comes to risk management for professional athletes. 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 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. 2. 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. 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.

Every year in our business we lay out our goals for the upcoming year. During this process, we review the progress we have made toward our long term goals. Without a roadmap and clear goals, we will always move the goalpost. I imagine you have gone through this same process with your company. Constantly wrestling between wanting to push your team to the next level while celebrating successes along the way. Financial planning for business owners is a process to help you hit goals in your personal financial life. As specialists in wealth management for business owners, our goal is to create, implement, and monitor your financial plan. In this blog, we are going to look at the frameworks we use to secure your financial future without moving the goalpost. Financial Planning for Business Owners Financial planning is one of the simplest topics to understand but a difficult topic to execute. When we work with business owners we break down financial planning into three areas. Create Implement Monitor Let's look at each. Create Creating a financial plan starts with you. We need to dive into what you value and want to prioritize. What questions are we thinking about when creating a plan? What does success look like for me and my family? Am I spending my time in areas that give me energy? What will it take to allow me to be financially secure? Each of these questions will provide unique answers and those answers will be our framework. Let's look at an example. "What does success look like for me and my family?" Business Owner 1 "Success for me is passing our business down to my children. My goal is to run the company for the next five years. In the following five years, I plan to transition the business to my children." Now let's contrast this with another answer we have seen. Business Owner 2 "Success for me is spending more time with my spouse and kids now. I am burnt out and exhuasted. If possible I would like to sell my company in the next two years." These two owners have a similar goal of exiting their businesses but will have different financial plans. Once we have answers to these questions we can start to set our course with our goals. When we set these goals we want to use the SMART goal setting approach. Specific Measurable Attainable Relevant Time Bound My encouragement to any business owner going through this process is there is no "right" answer, but there is one big mistake they must avoid. Avoid This Big Mistake When creating a financial plan there is one mistake you MUST avoid. That mistake is making it all about the money. Working with business owners has allowed me to see that money has a decrease in benefits after your goals are met. The bills get paid. The new car gets bought. The kid's education gets paid. The dream house gets built. Don't hear what I am not saying. Many aspects of life require money, but if you make it the end all be all you will never be satisfied. Once we have our goals set it is time to implement them. Implement The implementation of your financial plan will be more tactical than the creation. This is where we get into the nitty-gritty of how we will meet your goals. During the goal-setting process, we will have determined a few of these basic questions. What does it cost to live the lifestyle you desire? What are you spending to live your life today? How do you want to spend your time today and in the future? How do you define winning in your business and personal life? What is the range we can sell the business for (if applicable)? Our goal is to provide optionality and clarity to your financial plan. Our team is going to run the analysis to help you answer these key questions. How much money do I need to save annually to meet my goals? How much money do I need to have saved to live my ideal life? How will we meet my goals on my timeline? What levers do we need to pull to win the game? When we create this plan we use a combination of tools at our disposal, but the one business owners find the most helpful is our stress test. If you have run a business for any period of time you know things never go "as planned". There is always some variable you accounted for incorrectly. We see the same occur for client's financial plans. This is why we stress test client's financial plans for these common variables. What if I live longer than I expect? What if inflation is higher than expected? What if I decide I want to spend more money? What if my health care costs are higher than I thought? What if my portfolio returns a lower rate of return than expected? This process gives business owners peace of mind that they have a roadmap that will allow them to have personal and financial success. At Moment not only do we help you build the roadmap but we are the financial partner that implements it for you. As you know any good plan comes with changes. That brings us to the last step of financial planning for business owners. Monitor Plans change. This can go for anything in life. I think back to the first time I took my family to Disney World. We booked the trip in January. Where we live in the midwest it gets cold in the winter. This means every time we book a trip for the summer we are never concerned about the heat. This all changes when you show up at Disney World in 95-degree Florida heat with three kids under six years old. I can distinctly remember telling my wife I don't care what it costs to eat lunch inside we have to get out of this heat. The great thing about having a team that specializes in wealth management for business owners is that we get it. We are here for those changes. Typically these changes come in two forms. The changes in your control and the changes out of your control. In Your Control: Changes that are in your control are more fun to plan around than those out of your control. Let's look at these first. You decide you want to spend more money now vs later in life. You decide you would rather continue running your business vs selling it. You decide you would rather spend more time with your kids and less time in the business. When changes like these occur our team will perform a new analysis to ensure we make the necessary changes to keep you on track. Out of Your Control: These are the less fun things to plan around, but the reality is they happen. Everything isn't roses and rainbows and it pays to have a team in your corner that gets it. Business valuations decrease in your industry. A key partnership changes and affects the company's bottom line. Your cost of goods sold increases due to inflation and it affects your profits. Although no business owner ever wants these situations to occur the reality is that they do happen. Our job is to show you what these changes mean for your financial plan and provide you with the information to make an educated decision. Business owners hire us to get the answers that they need and this is not always what they want to hear. This is where hard conversations have to happen. The important thing to remember in these conversations is that life is all about tradeoffs. Here are a few examples of tradeoffs we have seen in the past. Working less today with the tradeoff of spending more time with your family. Making less today with the tradeoff of spending more time on projects that give you energy. Working more today to meet your financial goals earlier in life. These are three of the tradeoffs that we have seen when constructing a comprehensive financial plan for business owners. Our job as a financial advisor is to be the guide to help you create, implement, and monitor your financial plan. ----------------------------------------------------------------------------------------------------------------------------- Our goal at Moment Private Wealth is to help you reach your ideal outcome. This is why we help construct financial plans 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 your financial plan, 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. 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 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. Does Moment Private Wealth help you 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. Can Moment Private Wealth help business owners with succession planning? Yes, this is part of creating a roadmap for your goals. Having first-hand knowledge of selling a business will allow you confidence throughout the process. Many business owners get one chance to sell a business. Having a firm that can help is key. 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.

You have the greatest superpower paired with a laundry list of disadvantages. Welcome to investing for professional athletes. Let's start with the good. You have time. The average athlete has their peak earning years in their early to mid 20's. That means you have decades to invest those earnings and let them compound. No seriously consider what that provides you, here is a visual of that power: You know you can't have the good without the bad, so here it is: You have little (or no) experience, you have a target on your back, and if done poorly there is little time to recover. In this blog, I am going to walk you through everything you need to know about investing as a professional athlete. Investing For Professional Athletes To understand where we are going, you need to understand where I am coming from. I have walked in your shoes. I earned millions, knew nothing, feared messing it up, and managed to retire with enough money to create financial optionality. That is what you want as an athlete ~ financial optionality after your playing career is over. The 4 questions we are going to answer today: Where do I start? What should I focus on? How much risk should I take? How do I connect my investment portfolio to my life? There are infinite things you "could" consider but what we want to focus on is what you "should" consider. Where Do I Start? The best decisions start with the end in mind. So what does the end look like? Well in a perfect world, what do you want to accomplish with the money and investments you have? No seriously, stop and write down everything you think you want in the future. Here is an example: $15,000 a month $1,000,000 house New car every five years Charitable giving each year Two family vacations a year There is no wrong answer here, this is your money and it should be personal to you. My one recommendation is to make it specific. See how I said, "new car every five years" not "a new car". The more specific the goal the clearer the plan to get there becomes. Once you understand where you are going let's talk about how to get there. The foundation of investing money is this ~ the more risk you take, the higher the expected rate of return you should receive. Stuff money under the mattress ~ the return is zero because the risk is zero (actually some risk there). Invest in an established business ~ the return should be good because there is risk in that. Invest in a startup ~ the return better have a chance of being great because of the risk. You can see here how the more risk taken in your portfolio the higher the rate of return has been. The key for professional athletes is to understand how much risk one should take. I always fall back to my favorite Warren Buffett line ~ "Do not risk what you have an need for what you don't have and don't need." Remember how we wrote down specific goals, well the next step is gaining a better understanding of how much risk we need to take to produce the return necessary for those goals. That is the starting point of investing. What Should I Focus On? The investing headlines for professional athletes read like a high-powered Venture Capital firm. "Star player invests in this." "MVP launches his own brand." "Top athletes buy a sports franchise." What if I told you those are the wrong things to focus on? Well, here it goes ~ those are the wrong things to focus on. They don't affect you No two situations are alike The focus should be on substance, not flair If I could put one thing on a billboard for athletes to read when it comes to investing this would be it: You should focus on your years of return not your yearly return. Take two athletes: Athlete 1: Invests in the latest high-flying investments. He has some incredible years but also fails to protect his downside losing as much as 20% of his capital in a year. To recover that 20% loss he needs a 25% gain. Athlete 2: Invests in established businesses. He has some good (not incredible) years but also properly protects his downside losing only 10% of his capital in his worst year. To recover that 10% loss he needs a 11% gain. Protecting the downside is as important (oftentimes more important) than the potential upside. Remember your greatest superpower is time. To use that superpower you need to stay in the game. Consider this ~ Warren Buffett is worth an estimated $130,000,000,000 and more than 99% of his net worth was made after his 50th birthday. He didn't magically become a better investor, he let time do the heavy lifting. 10x10 = 100 10x10x10 = 1,000 10x10x10x10 = 10,000 10x10x10x10x10 = 100,000 See how powerful compounding is? The rule of 72 states that 72 divided by your rate of return = the amount of time it takes for your money to double. Example: 72/8 (rate of return) = 9 (years it takes for your money to double) *$1,000,000 initial investment doubling every 9 years looks like this: $1,000,000 to $2,000,000 $2,000,000 to $4,000,000 $4,000,000 to $8,000,000 $8,000,000 to $16,000,000 The most important double is always the next one. So instead of focusing on a flashy yearly rate of return focus on your years of return. How Much Risk Should I Take? There is risk with everything we do in life. Investing money - there is risk. Driving down the street - there is risk. Eating food at a restaurant - there is risk. Yet just like wearing your seatbelt or making sure your food is cooked, there are ways to reduce risk in investing. The first and most important step for professional athletes is to understand how much risk to take. At Moment, we think about this in terms of how much money we need to have in each bucket. Bucket 1 - War Chest (safest) Bucket 2 - Growth Strategy (riskier) Bucket 3 - Aspirational Strategy (highest risk) To find the answer you need to consider three factors: Spending Ability to take risk Desire to take risk ***To better illustrate this we are going to use a hypothetical athlete, Bryce. Spending Before you invest you need to understand what it costs to be you. This is all the costs involved with living your lifestyle. Bryce spends $20,000 per month or $240,000 per year. This includes: Food Travel Donations Entertainment Housing Costs Transportation Costs Investments are fuel for our lives, which means we need to position our investments around the fact Bryce is spending $20,000 per month. Ability To Take Risk Ability to take risks means can an athlete invest in a way to grow his portfolio while still maintaining his lifestyle. The inevitable part of investing is on average the stock market is down in value one out of every four years. There has to be enough money in our war chest (safety bucket) to sustain those downturns. Bryce has saved $10,000,000 during his playing career. What I like to consider is how many years of spending ($240,000 per year) we want to have in our war chest. Our baseline for professional athletes is between 5 -7 years. This means we need $1,200,000 to $1,680,000 in our war chest. So Bryce has the ability to take risks with the additional ~ $8,500,000 he has saved. That leads us to should he? Desire To Take Risk This is as much art as it is science. As specialists in athlete wealth management, it is our job to help lead athletes through a process to determine how comfortable they are taking risks. While we know the more risk we take the higher our expected rate of return should be, the biggest key is sticking to the plan we set out. This means that even in those years when the portfolio is down an athlete is comfortable with the level of risk taken. While Bryce has the ability to position nearly $8,500,000 towards growth, given his current spending, and risk tolerance he prefers to take a more conservative approach. The agreed-upon strategy includes a total of $3,000,000 in his war chest and $7,000,000 positioned towards growth. Enough risk to reach his goals and enough downside protection to allow Bryce to sleep at night. See how spending, ability to take risks, and desire to take risks all play a factor in investing for professional athletes. If spending goes up, the ability to take risks might go down. If the ability to take risks goes down, future spending might need to go down. How Do I Connect My Investment Portfolio To My Life? You know those athlete headlines we talked about, remember how they don't apply to you? Investing and the returns you earn are fuel for your life. They are not meant to be campfire stories or headline news. They are meant to help you, your family, and the people you want to support. So connecting your investment portfolio to your life is key. It needs to be specific to you. It is a combination of all the things we have discussed: Where you want to go Focusing on the right things What you are trying to accomplish How much risk you can and should take Answer those questions, understand how they all work together, and then build your investment portfolio. It is a surefire way to make sure your investments connect to your life. - The investment mindset needs to be what is a good rate of return I can sustain for the longest possible period? Yet time and time again, we see athletes trying to hit home runs when all you need is singles and doubles. It is critical to have a financial team specializing in wealth management for professional athletes. You have one chance to do this right ~ make the most of it. If you are a professional athlete looking for a financial team specializing 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 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.

Picture this you are at the baseball game and they are selling 50/50 tickets. Your son asks you if you could buy a ticket. After buying him one of the tickets your son immediately starts explaining what we will do once we win. You know as his Dad there is a low probability of this happening. We call this concentration and it is how you get wealthy. Eventually, there needs to be a shift in your thinking. Instead of trying to hit another home run you refocus on protecting wealth. The 50/50 has low odds but a great reward. The charity that gets the other half of the 50/50 has a 99% chance of success. Our goal is to move you from the kid buying the 50/50 to the charity collecting the 50/50. Said another way the charity is positioned in a win-win situation. As specialists in wealth management for business owners, this is our goal. In this blog, we are going to look at the frameworks and strategies to steward wealth for generations. Investment Management for Business Owners Chances are you have been measuring the success of your investment portfolio wrong this entire time. Most business owners I speak with want to know what the return on investment is within the portfolio. After all, this is how you have measured the success or failure of the investments you have made in your business. A better question to ask. Will this investment portfolio allow me to meet my goals? Returns are important, but returns in a vacuum are an impossible measure of success or failure. Investing money should always tie back to your goals. Here are a few goal examples that illustrate this point: My goal is to invest for the next generation (30+ years). My goal is to invest in a way that gives me cash when needed (business acquisition). My goal is to sleep well at night knowing that my current needs will be supported (lifestyle goals). See how that works? Goals first then decide on the investment strategy to reach that goal. Let's look at the framework we use to construct an investment portfolio for business owners. We simplify investment portfolios into 3 strategies. The War Chest – The money that we have for peace of mind The Growth Strategy – The money you have set aside for long-term investments The Aspirational Strategy – The money you have allocated for higher-risk strategic investments Let's look at the factors we consider in investment management for business owners. What is an Investment Portfolio? Before we dive into our three strategies let's define what an investment portfolio is. Your investment portfolio is a combination of all the assets on your balance sheet. This includes the following: Real Estate Business Equity Private Investments Stock Market Investments Families often make the mistake of thinking about an investment portfolio as the assets that an advisor manages. This is a mistake. As a business owner you know your largest asset is your business. Now that we know what is included in an investment portfolio let's dive into the three strategies your assets can fall into. The War Chest You have done the hard thing and won the money game. When you win the money game you want to protect what you have and make sure you never lose it. Remember, building wealth and keeping wealth are two completely different skill sets. The assets that you need for peace of mind will be allocated to the war chest. Now how do we determine how much money goes into the war chest?  My favorite answer: It Depends. These three questions will help determine what needs to go into the war chest. How much does it cost to live my lifestyle? How heavily am I relying on my investment portfolio to fund my lifestyle? What are my known capital needs in the next 5-7 years? Why are these the magic questions?  First, our war chest is the money we need to have no matter what. Typically in this bucket, we will put 5 to 7 years' worth of your living expenses. Why this magic number...most market cycles happen in a 5 to 7 year time frame.  We want to have a bucket of safe assets that can protect us from unknown risks in the world. This war chest is our peace of mind. What types of investments go into our war chest?  These are typically investments that we are generating yield from and have little to no volatility. Money Markets Municipal Bonds Corporate Bonds Government Bonds Private Credit These are the types of investments we will look to place in the War Chest. Now that we have our war chest let's move on to the growth strategy. The Growth Strategy The next strategy we look to fund is our stay-rich money.  Remember if you are reading this you probably have won the money game or are on your path to winning the money game.  Our job isn’t to get you rich again our job is to keep you rich. The way we do that is by focusing a portion of the portfolio on growth.  How do we determine what we should have in this strategy? How much does it cost to live my lifestyle? How heavily am I relying on my investment portfolio to fund my lifestyle? How much risk am I willing to take? Note that the first two questions are the same as the war chest. Without knowing these answers it is impossible to build a tailored investment portfolio.  The key to the growth strategy is risk.  The reason we have 5-7 years of living expenses in our war chest is to allow us to let our growth assets have the right amount of time to grow. 75% of the time the market goes up, but this means that 25% of the time it does not. We never want to get over our skies and end up needing money from our growth strategy when the market has dropped. Think about the great financial crisis of 2008-2009 or COVID in 2020.  This was a time to rebalance into your growth strategy, not a time to cash out from the stock market.  Those who stuck with their growth strategy ended up in a much better place than those who panicked. What type of investments go in bucket two: Diversified Public Equities Public Real Estate Equities Public Alternative Investments These investments are going to have higher expected returns with more risk than our war chest. The amount of money that goes into each strategy will be specific to you. Make sure you have a portfolio that is tailored to your needs. Aspirational Strategy The last bucket we fund is the aspirational strategy. This is the money that you don’t need to fund your goals in life. A properly funded war chest and growth strategy will fund our goals in perpetuity. The aspirational strategy is the money that we are allocating to get outsized returns and are fine putting at risk. What questions will guide you to the right amount of money in the aspirational strategy: How much does it cost to live my lifestyle? How heavily am I relying on my investment portfolio to fund my lifestyle? Can the war chest and growth strategy support my lifestyle in perpetuity? Once you have answered these questions you can determine how much money to allocate to the aspirational strategy.  Now we have a decision to make. This decision is client-specific. How much of my excess do I want to put at risk? Are you going to buy another business? Do you want to invest in Venture Capital or Private Equity? Some entrepreneurs want to protect assets while others want to focus on maximizing returns. Remember there is no right answer to the exact amount that can go into the aspirational strategy but there certainly is a wrong answer. The Wrong Answer: You overfund the aspirational strategy and get greedy risking the money you need to meet your goals. So what types of investments go into bucket three: Private Equity Investments Venture Capital Investments Private Real Estate Deals Buying a Private Business Each one of these investments has a higher expected rate of return than our war chest or growth strategy. Remember return doesn't come without additional risk. So remember investment portfolios for business owners are unique. The investment portfolio is a tool in your toolbox to help you meet your family's goals. This is not a one size fits all equation. When you are constructing your portfolio start with the end goal in mind. As you think about your portfolio today ask yourself this question. On a scale of 1 to 10, how confident are you in your investment portfolio meeting all of your family's goals? If the answer isn't a 10 schedule a call to get a second opinion. ----------------------------------------------------------------------------------------------------------------------------- Our goal at Moment Private Wealth is to help you reach your ideal outcome. This is why we help construct portfolios 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 your portfolio, 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. 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 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. Does Moment Private Wealth help you 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. Can Moment Private Wealth help business owners with succession planning? Yes, this is part of creating a roadmap for your goals. Having first-hand knowledge of selling a business will allow you confidence throughout the process. Many business owners get one chance to sell a business. Having a firm that can help is key. 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.

Professional athletes are constantly the center of attention. TV, social media, podcasts...you name it. With this attention comes a responsibility. Sports give professional athletes the stage to be something bigger than themselves. This impact can go beyond their play on the field. In this article, I am going to break down how professional athletes can start a foundation. What is a Professional Athlete's Foundation? To begin, we need to understand what a foundation is: A foundation is an organization that supports charitable or giving activities. Foundations make an impact for the common good of others. These giving activities can include: Education Culture Religion Sports Rare Diseases Simply put, they are charitable organizations with the goal of shining light on areas of need. A foundation can be created individually or as an organization. If done as an organization, it can include: Family - i.e. The Moment Family Foundation Corporation - i.e. Moment Private Wealth Foundation Team - i.e. Moment Private Wealth Team Foundation There is no right or wrong way to give back. A charitable foundation gives the athlete the framework to do so. Below is a step-by-step guide to starting a foundation. The Steps Needed to Start A Foundation Starting a foundation as a professional athlete is a meaningful way to give back to society. It can positively impact on the world. The key is having a qualified team specializing in athlete wealth management to ensure the proper steps and actions are taken. Here are the steps a professional athlete should take when starting their foundation: Find Something You Are Passionate About Define Mission and Goals Research Areas of Need Create a Brand Hire Board of Directors Outline Programs Develop Budget and Fundraising Plan Build Relationships and Partnerships Engagement Evaluate and Grow Find Something You Are Passionate About Step 1 is determining the cause or issue you are passionate about and want to support. The foundations that thrive are the ones that spark an interest in making a change. It is a place that grounds even the best athletes to focus on something that goes beyond the sport they play. Consider something that is personal; something that hits home. Think about what others value or a place of need in the area you live. Here are a few specific examples: Autism Cancer Access to Athletics Catholic Charities Foundations for change start with a platform and a passion. Define Mission and Goals Step 2 is defining your mission statement. Every foundation needs to have a defined mission, unique to their goals and easy to identify. Here is our mission at Moment Private Wealth: Help professional athletes and high-growth entrepreneurs build and protect wealth. A foundation needs something similar. This mission statement is the gameplan for the foundation. It is the playbook for change. Research Areas of Need Step 3 is thoroughly researching areas of most need. Look around the area. Where is society hurting? Where is positive impact needed? Once narrowed, find a foundation you admire. What are they doing well? How can it be replicated? With the right research, athletes can create a foundation that will have an impact. Create a Brand Step 4 is creating a brand. Most, if not all professional athletes already have a personal brand. Michael Jordan, Tiger Woods, Lebron James...you know their personal brand. A personal brand creates an identity and tells a story. A foundation also needs a brand. This is the identity of the foundation. Create a name, a logo, a website, and other marketing tools that spread awareness. The brand needs to align with your mission and goals. The closer these align, the more it will attract supporters. More importantly, these supports will help raise awareness of your cause. Board of Directors Step 5 is hiring a Board of Directors. Most, if not all non-profit organizations need a Board of Directors. This is an important step in starting a foundation. The board of directors is the strategy behind the foundation. Think of them like the coordinators in football. They put together the strategy that goes into the game plan. Make sure the board is committed to your cause. They will provide guidance and support the foundation's activities. Outline Programs Step 6 outlines the programs and initiatives of the foundation. The programs and initiatives carry out the foundation's mission. These are the events where the mission is implemented and value is created. Think of giving back to the community events. Visiting kids in the hospital with rare diseases. Starting sports camps for those that cannot afford it. The programs add value to the mission of the foundation. Develop a Budget and Fundraising Plan Step 7 is developing a budget and fundraising plan. Like any company, fundraising is one of the hardest, but most important steps in the process. It starts with creating a budget. Specifically, the resources needed to operate the foundation. These include: Donations Grants Sponsorships Partnerships Budgeting and fundraising are the bloodline of any organization. Without it, the programs won't exist. Build Relationships and Partnerships Step 8 is building relationships and partnerships. Everything in life is built around relationships. A professional athlete's foundation is the same. It starts with the board of directors and those you want to support your mission. This could be family, friends, teammates, coaches, or business partners. Who will join you in spreading awareness for your cause? Further, create relationships with donors, volunteers, and supporters who believe in the mission. These people can grow and impact the goals of the foundation. No foundation is built by one person. It takes a village to raise awareness. Engagement Step 9 is engagement. Effective foundations engage with those around them. This could be a specific community or the city a team plays. Engage those around the community that care and understand the cause. People will support the foundation because they support the athlete. Another way to engage is to get involved with other foundations. A professional athlete helping a fellow athlete's foundation brings more engagement. Engagement leads to further contributions and impact. Evaluate and Grow Step 10 is measuring the impact of your foundation. The foundation has been created. The board of directors have helped build the strategy. The programs have been outlined and initiated. The next step is evaluating the impact of the foundation. Remember, the programs and initiatives carry out the foundation's mission. The foundation should bring awareness to the cause. Evaluating the impact will help the foundation grow. Influence Beyond the Field The foundation is off and running. Board of Directors in place. Programs are outlined. The goal of the foundation is impact and positive change. However, it is worth mentioning the numerous benefits for a professional athlete. Social Impact - A foundation is an opportunity to make a positive impact in the community. It starts with the platform and resources afforded an athlete. An athlete's impact can change communities in most need. Brand Building - Professional athletes are constantly in the public eye. With that comes brand recognition and a public image. Philanthropic giving can strengthen an athlete's reputation in a positive way. In turn, an athlete can differentiate themself from peers. Personal Fulfillment - This goes without saying...foundations can be personally fulfilling. Helping others can provide a sense of purpose and satisfaction. More importantly, an athlete has the opportunity to make a difference in the world. Community Engagement - An athlete can have an impact in their own back yard. A foundation is an great way to give back to the local community. Networking Opportunities - Growth comes in numbers. That starts with a network of people. A foundation is a platform to raise that awareness and grow in numbers. With others, the impact can spread to a broader group of those in need. Tax Benefits - A foundation is another way for a professional athlete to save on their taxes. While this isn't the sole purpose, it certainly plays a role. Depending on the foundation, there are many ways to save on taxes. Consult your tax professional. Inspiration for Others - Impact comes in many forms. Inspiration is one that gets overlooked. Professional athletes have the opportunity to lead by example. This starts with inspiring others. Philanthropic Legacy - A legacy is something passed on. A professional athlete's legacy can last beyond the playing field. Starting a foundation is a great way to build that legacy. Look around the community. I guarantee there are people and places in need. Unfortunately, time is undefeated. There will come a day were the helmet or cleats will no longer be worn. That doesn't mean a professional athlete's impact has to be over. Consider starting a foundation. This could be the beginning of a legacy that could last for forever. ------------------------------------------------------------------------------------------------------------------------------ If you are a professional athlete who is looking to better understand what it takes to start a foundation, schedule a call, and talk with a Moment founder. Frequently Asked Questions Here are some answers to questions I received frequently about Moment Private Wealth. 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 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. Does Moment Private Wealth help you 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. Can Moment Private Wealth help business owners with succession planning? Yes, this is part of creating a roadmap for your goals. Having first-hand knowledge of selling a business will allow you confidence throughout the process. Many business owners get one chance to sell a business. Having a firm that can help is key. 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.

The excitement turned to sheer horror when I realized what I was going to be paying in taxes. Let me take you back. I had just signed my first professional contract and my mom sat me down to talk through taxes. You see my mom had an accounting background so she was quick to point out that taxes mattered. She showed me how more than 40% of my signing bonus would be heading to Uncle Sam. As a professional athlete, taxes are your largest lifetime expense. The good news is with proactive planning and a specialist in athlete wealth management you can reduce your lifetime tax bill. In this guide, I will walk you through how to think about taxes, types of income, tax strategies to consider. Said another way, I will show you what tax planning for professional athletes should entail. Tax Planning For Professional Athletes According to Statista the average salary for the four major sports leagues is north of $4,000,000. The top federal tax rate is 37%. This means the average athlete is paying more than $1,000,000 in yearly taxes. To understand how to think about taxes we must first understand how they work. The current federal tax brackets are listed below: Each taxpayer pays a certain rate based on their filing status. You can either file as single, married filing separately, head of household, or married filing jointly. Once you determine your filing status you pay each tax rate up to a certain amount. Think about this like filling up buckets of water. Once one bucket is full, the water (money in this case) flows to the next bucket. Example: If you make $1,000,000 in a year and you file single. You will pay the following rates: 10% on the first $11,600 12% on the next $35,550 22% on the next $53,375 24% on the next $91,425 32% on the next $51,775 35% on the next $365,625 37% on the last $390,650 While you are in the top tax bracket (37%), you don't pay 37% on every dollar that you make. In this scenario, you pay just a little more than 33% of your $1,000,000 of income. In addition to federal income taxes, you will pay state income taxes as a professional athlete. State income taxes range from 0% up to more than 13% in 2024. State taxes for professional athletes work like this. For all the money that you earn on the field, you will pay tax in the state in which you earned the money. In addition, if your state of residence has a higher state income tax than the state you play, you will also owe taxes there. Example: You are a California resident and your team is playing several games in St. Louis, Missouri. You will owe 4.80% of Missouri state tax plus 8.5% to California. This is due to California having a 13.30% state tax. If instead, you were a resident of Florida, you will still pay the Missouri tax for the games played but no state taxes above that. As a professional athlete, you don't need to be the expert but you do need to be educated. Gaining a better understanding of tax planning for professional athletes can greatly benefit you. After all, it is your largest lifetime expense. Types of Income To understand taxes you have to understand the types of income you can make as a professional athlete. 1099 Income - This is the money that you make off the field (endorsements, signings, sponsorships). There is far more optionality with this type of income than on-field income. Professional athletes can deduct most costs incurred with earning this income. Example: If you are an autograph signing, you can deduct all travel expenses required to facilitate the autograph signing. 1099 income is also taxed in the athlete's state of residence. Example: If you are a Florida resident and you make $50,000 in off-field income there will be no state tax due on this money. You will still pay federal income taxes on this money. This is another reason why your state of residency matters. W2 Income - This is the money that you make on the field (salary and bonus from the team). With W2 income you will be taxed in each state that you earn the money. If you are playing a game in California you will owe federal and California state taxes for that game. The key is understanding the nuance of tax planning for professional athletes. Remember our earlier example: Example: You are a California resident and your team is playing several games in St. Louis, Missouri. You will owe 4.80% of Missouri state tax plus 8.5% to California. This is due to California having a 13.30% state tax. If instead, you were a resident of Florida, you would still pay the Missouri tax for the games played but no state taxes above that. In this example, you see how it pays to consider being a resident of a low-tax state. It provides you as the athlete the most optimal tax situation. As with everything, taxes shouldn't be the sole driving factor but it can save professional athletes hundreds of thousands or millions of dollars in lifetime taxes. Current Year vs Future Year Tax Benefits In athlete wealth management, we are always thinking about the current year versus the future year's benefits. Much of this depends on what tax rate you are in as an athlete. Current Year - This means you are getting a tax benefit in that given year. Future Year - This means you are getting no current year tax benefit but you will get a future year one. Consider the athlete wealth arc ~ it is sharp ups and downs. With that comes increasing tax rates followed by decreasing tax rates. As an athlete, you have to focus on reducing your lifetime tax bill, not your yearly tax bill. This means sometimes making decisions that are future year ones in the current year. Said another way ~ to pay the lowest amount of lifetime taxes might mean paying more in the current year. Example: If you are receiving a large signing bonus or in the middle of a free-agent contract you might want to focus on the current year. The reason is simple you will be in the highest possible tax bracket (37% federal) tax bracket). If you are in year one of retirement or in the minor leagues your income will be far less. This is when you will want to focus on future year tax benefits. The reason is simple you will be in a lower bracket (10 - 24% federal tax bracket) The IRS sets the rules of the tax code but you get to choose how you maximize those rules. The single best framing to view this through is current year versus future year tax benefits. This requires proactive planning on the part of your financial team. You need to have a specialist that understands your situation today and where you are headed in the future. We have helped clients save hundreds of thousands of dollars through proactive tax planning that otherwise would have been missed. Tax Strategies The challenge with professional athletes is there is no one size fits all when it comes to tax planning strategies. Yes, we want to reduce your lifetime tax bill but we also want to always ensure those strategies are getting you closer to meeting your specific goals. You will hear countless tax strategies in the locker room ~ it does not mean they are right for you. Step one is understanding what you are trying to accomplish. Step two is determining what your current and future situation looks like. Step three is combining those first two steps to execute the correct strategies. See how that works? Chances are what you implement is going to be different than our teammate. Here are some of the most common strategies athletes need to consider: State Residency Legacy Planning Charitable Giving Contracts Structures Tax Efficient Investing Retirement Accounts Duty Day Calculations Tracking Deductions/Expenses Example: You are earning $1,000,000 in taxable income. Maximize your 401(k) contributions. ($23,000 tax deduction) Changed state residency from Missouri to Florida. (~$50,000 tax savings) Contribute 5 years of giving or $50,000 to a Donor Advised Fund. ($50,000 tax deduction) You can see how quickly your tax bill can be reduced by considering the right strategies to use in a high-income year. This is only scratching the surface of what should be considered as a professional athlete. The thing to remember is your situation is unique, you need a specialist in athlete wealth management to optimize it. My advice is to ensure that you have a financial team that is proactively looking at all the tax planning options for you as a professional athlete. I have seen time and time again professional athletes come to us after unknowingly leaving money on the table. Look there is no way around paying taxes but you can plan around them. The IRS sets the rules of the game but you get to determine how you play the game. Done right it can save you thousands, done poorly you can leave the IRS a massive tip. If you are a professional athlete looking to reduce your lifetime tax bill 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. Are professional athletes taxed in each state they play? Yes, athlete pay taxes on their salary or W2 income in each state they play. Signing bonus money and off-field income is taxed in a player's state of residence. 2. What types of income do professional athletes earn? Professional athletes earn W2 income and 1099 income. W2 income is what is earned from salary, we call this on field income. 1099 income is what is earned through endorsements, we call this off-field income. 3. What can professional athletes do to reduce their tax bill? The number one thing professional athletes can and should do is plan ahead. Proactive tax planning with your financial team can save athletes significant money on their lifetime tax bills. 4. What types of retirement accounts should athletes consider? The large majority of professional athletes will have access to a 401(k) through their team. This provides athletes with a tax deduction on money contributed. In addition, athletes should consider Roth IRAs, Sep IRAs, and Solo 401(k)s to further reduce their lifetime tax bill. 5. How does Moment Private Wealth help athletes lower their tax bill? Tax planning for professional athletes is one of the biggest things we help our clients with. It is key for professional athletes to have specialists in athlete wealth management to optimize their tax situation. *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.

“You are doing great.” This was the line my financial advisor used to tell me as an 18-year-old kid. I was a kid who had just received millions of dollars overnight, had zero understanding of money, and was craving more. Quite frankly, I was searching for more than “you are doing great”. I wanted the confidence to understand what I could spend or better yet what I should spend. You see even then I knew that money was a tool, all I could think about was running out of it. So, instead of spending it ~ I spent nothing. In this guide, I am going to walk through financial planning for professional athletes. You know the one that I always wanted as an athlete. How to think about saving How to think about spending How to deal with the emotional side of it How to deal with the uneven incomes sports provides Financial Planning for Professional Athletes Saving Money as an Athlete Let me make one thing clear, traditional financial advice rarely applies to professional athletes. Now sure, some basic concepts still apply athlete wealth management requires strategies different than 99.99% of the population. With that how we approach saving money should differ too. Consider this, our goal in saving money is not to hit some random number but instead it is to hit a crystal clear goal. So, do this exercise with me ~ Write down everything you think you want in your future life. Car House Vacation Charitable Giving Lifestyle Spending Legacy Planning & Goals What does that number come to every year? It doesn’t need to be exact but let’s say it comes to $300,000 per year. The number matters less than the fact that we just crystallized our future goal. You see now we don’t just have some random percentage or dollar amount. We have a clear goal. With that goal, we can start working backwards towards what we need to save to achieve it. See how that works. Example: Spend $300,000 forever Current contract is 4 years at $5,000,000 per year ($20M total) Safe withdrawal rate (trying to avoid touching the principal) of 3% Taxes, agent fees, and reward purchases leave us with $10,000,000 So while you could say well save all of it, a more reasonable approach is to understand the pros and cons of each. You could spend less today and more in the future. You could spend more today and less in the future. You could spend more today and generate additional income in the future. Do you see how personal this should be for an athlete? Yet, the building block is understanding what we want to spend in the future. The last thing you want to do as an athlete is to play out that $20,000,000 contract with no sense of what your future goals look like. Spending Money as an Athlete The spending is out of control but not always like you think. You see, I see professional athletes go one of two ways with spending. You either spend everything or you spend nothing. Much of that mentality is based on an athlete’s experiences, upbringing, and mindset around money. Think about spending like a seesaw. We want to keep the balance and stay away from the far edges. The goal is not to spend nothing but it is also not to spend everything. It is kind of weird actually, you can buy anything but that doesn’t mean you can afford it. I think about spending in two buckets – rewards purchases and lifestyle purchases. Reward Purchase – This is a one-time purchase rewarding yourself for years of work. Example: You sign a new contract and you buy the watch, car, or vacation you always wanted. Lifestyle Purchase – This is an ongoing purchase you can afford for years. Example: You enjoy taking your family on vacation each year around the Holidays. Step one is distinguishing the difference between the two. Step two is understanding what things you can afford in each category. Step three is acknowledging which purchases mean the most and whether you can sustain them. I want our athletes to feel good about spending money, they have earned it. I also want them to understand that there is a lot of life to live after a career ends. The time to start planning around their spending is at the start not at the end. Remember we want the seesaw to be balanced. Approaching Uneven Incomes I remember the first time I saw teammates check for over $1,000,000 for a two-week period. My jaw about hit the ground. As a professional athlete, you can earn substantial income typically condensed into certain periods in time. Each professional league pays players on different schedules but still the vast majority lump salaries into the playing season. This means months with steady income and months with no income. Compound this with the fact that your yearly salary is often far from guaranteed. Free agent contracts for multiple years are few and far between and even those come to an end. You need to be planning for this. The best way to do this is through building up your war chest. This is the bucket of money that is positioned for the here and now. This should be a combination of cash and ultra-safe investments. The goal of this money is to: Sustain Lifestyle Spending Provide You Peace of Mind Allow Other Investments To Grow Said more simply, this bucket allows every other aspect of your money to work properly. Spending can continue, investments can grow, and you can have peace of mind in the unknown. Emotional Side of Money I will never forget the day I signed my first big contract. Excitement turned to anxiety when I started considering all the aspects that came with having millions of dollars. For my movie buffs, I can’t help but think of the Spiderman quote, “With great power comes great responsibility.” I knew from the start if I did it right this money could set my family up for generations. I also had no experience, no idea how to actually do that, and had never dealt with money. So, ya that anxiety you might feel around, “Am I doing this right?” ~ It is normal. The reason money is emotional for professional athletes comes down to one thing, not understanding it. Think about it, do you have anxiety when you walk onto the field for a big game? Nervous excitement sure but once the game starts you get into your flow state. That happens because you have prepared, understand the situation, and have executed your sport thousands of times. This money thing is the exact opposite. So how can you get to the point where you feel that same flow state around your finances? Ask Questions Hire Trusted Advisors Ask Questions Determine Your Future Goals Ask Questions Execute On The Plan You Develop Ask Questions See the theme? Ya, you need to ask questions. The hard part is knowing what questions to ask. The truth is that comes with time in meetings with your financial team but start with “What questions should I be asking”? Remember your financial team works for you, part of the fee you are paying them should be to educate you on why you are making the moves you are. As financial advisors for professional athletes, our goal is to give athletes one takeaway each time we meet. _____ Athletes, your financial advisor telling you, “You are good” is not enough. You don’t need to be the expert but you do need to understand what is going on. It will give you confidence. It will set you up for future success. It will allow you to avoid future financial regret. It will help you set your family up for generations to come. When it comes to financial planning for professional athletes you need advice as specialized as you are. If you are a professional athlete looking for 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 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. Client 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.h *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 2010, George Steinbrenner the owner of the New York Yankees, avoided paying $500,000,000 in taxes. The best part about this story is that his estate plan saved him these taxes, not a tax planning strategy. The Steinbrenner family had a simple strategy. Create a tailored plan for their family and have a team that could help them execute. Estate planning for business owners can be complicated and confusing. We are going to simply it today. In this blog, we are going to cover 1 of the 5 areas every business owner should have covered. Today's topic is the 6 key components of every estate plan. Interested in the other 4 areas check out the complete guide to business owners. What is an Estate Plan? Your estate plan is simple. It should accomplish 3 primary goals. Give direction to your assets in advance. Give direction for how to take care of yourself and your loved ones. Save money on estate taxes. Everything we do in life is amplified when emotions are heightened. Unfortunately, death is undefeated and when that time comes emotions will be higher than normal. I want you to think about your estate plan like a contingency plan in your business. The idea of a contingency plan is to ensure the train stays on the tracks if things go haywire. Your estate plan is your contingency plan for the assets you own and the people that you love. The great thing is that these 6 tools can save you and your family all kinds of headaches. Let's dive in. Estate Planning for Business Owners 1) Revocable Living Trust Your trust is going to be the most important tool in your toolbox. First, what goes into a trust? Think about this as anything with a physical title. Examples of this are brokerage accounts, homes, and cars. Assets with a title are meant to go in your trust. This is important for two primary reasons. To Avoid the Probate Process To Give Direction to Assets The Probate Process: First what is the probate process and why do we want to avoid it? Probate is the government's plan to distribute your assets for you. This process has many downsides. Let's just name a few. It is a public process Anyone can come make a claim to your assets A judge gets to decide where assets go It is costly, 5% of your assets typically You don't want this plan. The nice thing is that with a properly set up trust all this can be avoided. You are probably thinking to yourself how do I know if my assets are going to through this probate process? If you answer no to both of these questions your assets are likely at risk. Have I had an attorney draft a trust for my assets? Have I titled all of my assets into that trust? Don't wait until it is too late. Take action with your team to get a trust set up. Direction to Your Assets: Our second primary reason is to give direction to assets. Unlike a beneficiary on a brokerage account, a trust can always have a backup. Let's look at an example of a brokerage account with a trust vs a brokerage account without a trust. Without A Trust: This is a simple setup. Let's assume this is an individual account with your spouse as the beneficiary. If you pass away these assets will go to your spouse directly. If your spouse isn't alive to take your assets they go to probate. Pretty simple. Now let's look at why a trust can be better. With A Trust: When you set up a trust you can give specific examples beyond simply a beneficiary. Let's look at a few common examples we see in conjunction with a trust. These assets must stay in the trust and be used for health, education, maintenance, and support. These assets must stay in my bloodline. These assets will go directly to my children. If they are not living they will be split between my living heirs. In a trust, you can get specific. This can be good both for planning and for avoiding probate. After all, you have worked your whole life to have the assets on your balance sheet. Don't you want them to go where you decide? 2) Pour Over Will Now you know what happens to your property with a title let's talk about all the other stuff. These are all the items you own but don't have a title for. Mom's wedding ring Dad's famous paintings The priceless family heirloom The most common arguments that happen when distributing assets of an estate can be avoided with a pour-over will. So how does this pour-over will work? It all starts with the first part of the estate plan. The trust. Without the trust, we are going to go back to the probate process where a judge will settle the estate. A pour-over will is going to pour or move all of your assets without a title into your trust. This will accomplish two main goals. It will allow you to decide who gets these assets in advance. It will allow you to avoid the probate process. These assets can have both monetary and sentimental value. A pour-over will is the best way to protect the value you see in these assets. 3) Healthcare Decisions Our goal with estate planning is to leave nothing up to chance. This includes your health care. You have heard that without your health you have nothing. A health care directive is the best tool to allow you to control your path in the health care system. When healthcare decisions are being prepared there are two documents that we want to focus on. Healthcare Directive - Outline your wishes for end of life treatment Healthcare Power of Attorney - Who can speak to healthcare providers on your behalf When drafting these 2 documents there are 3 main goals. Who gets to make decisions for you? When they can make decisions for you? How healthcare decisions are made for you? The Who This is exactly as it sounds. You are able to name who you want to make health care decisions for you. In this directive, you are able to name multiple individuals. That way if someone is unable to serve or unwilling to serve in this capacity at the time of an event you always have a backup. The When This is a two-pronged answer. Power of Attorney A power of attorney can be springing or durable. Springing Power of Attorney - Will spring into action if you become incapacitated. Durable Power of Attorney - Will be effective immediately when you sign the POA. Healthcare Directive This document is where you are able to outline end of life decisions. What type of treatment do you want as well as treatment you do not want? Do you want life support? - You Decide Do you want to be resuscitated? - You Decide Do you want to be kept alive at all costs? - You Decide I imagine you would want to make these choices for yourself. Outside of this being helpful for you it is also helpful for your loved ones. No one wants to put a spouse, friend, or family member in a position where they have to decide whether or not to pull the plug. 4) Financial Power of Attorney Similar to a health care power of attorney a financial power of attorney allows you to state in advance who gets to make financial decisions for you. When setting up a financial power of attorney it is important to understand there are two different types. Springing Power of Attorney - Your authority springs into action when an event occurs. Durable Power of Attorney - Your authority is effective immediately. The setup of these documents has serious implications. Often times we see families perplexed when I outline to them that their Power of Attorney is durable. They had no idea the individual could call their bank today and request a withdrawal. 5) Guardianship I have three kids and I want to make sure they are protected if something happens to my wife and I. Proper planning involves guardianship planning for children. A well-designed estate plan will dictate who, when, and how a guardian will be able to watch over your children. Within guardianship, there are a few components to consider. How can that guardian use your money? How does your child access money as a minor? What schools would you like your child to attend? It amazes me how many people care deeply for their kids, but haven't taken a few hours to get guardianship taken care of. 6) Estate Taxes Every decision you make in your financial life will have a tax consequence. Even your estate plan can have a tax consequence. The good news, if you are worth less than $13,610,000 in 2024 you are not subject to estate taxes. If you aren't sure what your net worth is let's look at a few components you should consider. Bank and Investment Accounts Death Benefit of Life Insurance Value of your Business Retirement Accounts Real Estate Assets If you add up all of these items and it is under $13,610,000 then you will avoid this tax. If you are over this amount you will be subject to estate taxes. Now is the fun part. Every dollar over $13,610,000 will get taxed at almost 40%. Thankfully there are steps and solutions to avoid these taxes. The next move is to assess who owns your assets. Are they in your individual name? Are they in your trust name? Are they joint assets? Once you have determined this you will better understand your next steps. Each person in America receives this $13,610,000 which means marriage will get you a 2x on this number. The next step is to look at what types of assets you own. Are they liquid or illiquid assets? Are any assets likely to appreciate dramatically? Do you have enough liquid assets to pay your tax bill? After you have gone through this exercise you will have a good understanding of what to do next. The biggest issues arise when you have a large amount of your net worth in illiquid assets with little cash to pay your tax bill. At Moment, many of our clients are navigating impending estate taxes. There is incredible nuance in planning done for families navigating estate taxes. To take your learning a step further, learn how gifting can be a powerful strategy to consider. If you are concerned about your potential estate tax bill, consider scheduling a call to see how we can help. ------------------------------------------------------------------------------------------------------------------------------ Remember, estate planning doesn't need to be scary. There are simple steps you can take today. Our job is to help guide you on your path to success. If you are a business owner who is interested in a free review of your estate plan, schedule a call and talk with a Moment founder. 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 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. Does Moment Private Wealth help you 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. Can Moment Private Wealth help business owners with succession planning? Yes, this is part of creating a roadmap for your goals. Having first-hand knowledge of selling a business will allow you confidence throughout the process. Many business owners get one chance to sell a business. Having a firm that can help is key. 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.

Picture this, you are on a rocket ship but with limited fuel. It is fun while it lasts but you need to plan now for when the fuel runs out. This is exactly what it looks like for professional athletes. Athlete wealth management is as much art as it is science. It is a combination of understanding the nuances and having deep expertise to help professional athletes manage, protect, and build wealth to last decades. I know this world because I lived this. I was the 9th overall pick in the 2009 MLB draft going from having a few hundred dollars in my bank account to millions overnight. I saw teammates struggle with sudden wealth and have seen the various pitfalls professional athletes fall victim to. In this article, we are talking about the six key areas every player should consider when it comes to athlete wealth management. Athlete Wealth Management The elements of an athlete's financial life consist of the same six components as everyone else: Financial Team - The who, what, and why of the team. Cash Flow - The direction given to income being earned. Tax Planning - The strategies implemented to reduce your lifetime tax bill. Risk Management - The protection against the things we cannot see. Estate Planning - The asset protection, tilting, and direction of wealth. Investments - The growth engine needed to help athlete reach their financial goals. While the components remain the same ~ the people, strategies, tactics, and solutions look far different. That is why athlete wealth management requires a specialized team of people with deep expertise to serve professional athletes. Financial Team "If you want to go fast, go alone; if you want to go far, go together." - African Proverb This rings true when it comes to athlete wealth management. It takes a team of specialized individuals working together to ensure success. Let's break down the who, what, and how of each team member. The Who An athlete's financial team should consist of at least five professionals. Financial Advisor Certified Public Accountant (CPA) Property & Causality Agent Life Insurance Agent Estate Planning Attorney Remember, each of the five areas (cash flow, tax planning, risk management, estate planning, and investments) needs an expert to lead the charge. The What We understand the core five team members but what is the role each team member plays? Financial Advisor - This is the point person advising, coordinating, and managing each element of your financial life. At Moment Private Wealth we serve as the main contact point for our athlete clients. Certified Public Accountant - Taxes are an athlete's single largest lifetime expense. It is the role of the financial advisor and CPA to work together to ensure every strategy is explored to lower an athlete's tax bill. Property & Causality Agent - The average professional athlete moves several times a year shifting between cities, apartments, and homes. This means multiple policies, things to protect, and specific home/auto/umbrella coverages are needed. The property & causality agent is the point person for ensuring proper coverages are in place. Life Insurance Agent - Professional athletes take on life at warp speed. The most formative years of their adult life (20-30) are while they are playing. This often means massive wealth creation and increased family responsibilities. Life insurance plays a key role in planning for family protection and ultra-high-net-worth legacy strategies. Estate Planning Attorney - Professional athletes are in the spotlight and with that comes increased risk and reduced privacy. The estate planning attorney is the expert in helping athletes protect, direct, and shield assets. The goal of an athlete's financial team is to bring a team of experts together in one place. The How You understand who is on the team and why they are on the team but how do you choose the team? To be frank, there are a lot of bad actors in the athlete wealth management industry. These five criteria can help you choose who should have a place on your financial team. Expertise - You are looking for someone who can provide level-three advice. They have lived it ~ they have done it themselves ~ they have helped guide others through it. Experience/Credentials - As a professional athlete, you want an experienced and credentialed team. At Moment Private Wealth, our athlete's financial team consists of advanced designations such as a CFP, CPA, CLU, & JD on every client's team. Service Model - A generalist financial advisor is not going to cut it for a professional athlete. You need a team that specializes in athletes and ultra-high-net-worth planning. Independence - You want to ensure the advice you receive is in your best interest, and free of conflicts. Finding an independent financial firm best positions this. Fit - The average financial firm serves clients with an average age over 60 and services several hundred per advisor. At Moment Private Wealth, we keep our client-to-advisor ratio small and our average client age is reflective of the professional athletes we serve. _____ Simply put, your financial team should specialize in you ~ the professional athlete. As financial advisors for professional athletes, we build, coordinate, and hold accountable all the members of an athlete's team. This allows you as the athlete to keep your focus on the field. Cash Flow You can only do three things with money ~ save it, spend it, and give it away. Seems simple enough? The problem? As a professional athlete, the typical financial advice need not apply. You are balancing accelerated earnings with a career whose lifespan could last just a few years. As specialists in athlete wealth management, we help athletes navigate the unique planning that comes with a career. Lifestyle Purchase vs. Reward Purchase You can buy anything but can you afford it? That is the question you must answer as an athlete. Let me explain... A lifestyle purchase is something that you can sustain forever. Example - An athlete budgets to buy a new car every five years. A reward purchase is something that you make one time. Example - An athlete buys his dream car after signing a new contract. Cost of Being You Basing an athlete's savings goals off of a percentage of yearly salary is a recipe for disaster Instead, we must understand the cost of being you. If the income dried up tomorrow, what would it cost to keep living the same lifestyle you are today? We aim to answer that question first and then work backward to determine what percentage we should save versus what we should spend. Example: An athlete earning $5,000,000 after tax saves 40% of his post-tax income or $2,500,000. By normal standards, this is a great savings rate. Yet what I see is an athlete who requires $2,500,000 in income to sustain his lifestyle. From there, we want to work backward and understand how much money we need to save to continue living that same lifestyle. If an athlete can reach those nest egg goals, great! If not, we need to have an honest conversation about cutting spending. _____ This is why I always preach to build the lifestyle slowly. The goal is to be able to keep living the same (or better) lifestyle after a playing career ends. The key to that is understanding what you should save, what you can spend, and what you can give away. Tax Planning You want the good news or the bad news? Alright, bad news first ~ Your single largest expense as an athlete will be your tax bill. The good news? You can plan around it and reduce it. Types of Income To understand taxes you have to understand the types of income you can make as a professional athlete. 1099 Income - This is the money that you make off the field (endorsements, signings, sponsorships). W2 Income - This is the money that you make on the field (salary and bonus from the team). The next step is understanding how we want to think about this income. Current Year vs. Future Year In athlete wealth management, we are always thinking about the current year versus the future year's benefits. Much of this depends on what tax rate you are in as an athlete. Current Year - This means you are getting a tax benefit in that given year. Future Year - This means you are getting no current year tax benefit but you will get a future year one. Example: If you are receiving a large signing bonus or in the midst of a free-agent contract we want to focus on the current year. If you are in a gap year (lower income) our focus shifts to future-year benefits. Once we understand what our focus is, then we can narrow down which strategies to use. Strategies The challenge with professional athletes is there is no one size fits all when it comes to tax planning strategies. Yes, we want to reduce your lifetime tax bill but we also want to always ensure those strategies are getting you closer to meeting your specific goals. Here are some of the most common strategies athletes need to consider: State Residency Legacy Planning Charitable Giving Contracts Structures Tax Efficient Investing Retirement Accounts Duty Day Calculations Tracking Deductions/Expenses _____ We have helped athletes save hundreds of thousands of dollars with proactive tax planning. This takes a deep understanding of athlete wealth management. You are filing in multiple states, dealing with countless cities, and need to ensure you are not leaving the IRS a tip. So remember, while taxes will be your largest lifetime expense you can and should be planning around them. Risk Management Anyone can Google your name and find out just about any piece of information they want. Your career is played at the highest level while putting your body on the line every day. That lack of privacy and increased career risk requires an insurance strategy to match. The three forms of life insurance every athlete should be aware of: Property & Casualty Insurance These policies protect your home, cars, and excess liability. Said another way, it protects you if the stuff you don't think will happen ends up happening. Auto Insurance - Just like it sounds it covers your vehicles. Home Insurance - The protection for one of your biggest assets. Renters Insurance - The policies that cover all those short-term rentals. Umbrella Insurance - The overarching protection that covers you if all other coverages are maxed out. You are traveling the country in the spotlight at all times. Do not, I repeat do not look for the cheapest policies. Instead, look for the policies that provide you with the best value (price + coverage). Life Insurance Life changes a lot from draft day. I went from having no one depending on me to being married with four beautiful kids. I want them to be protected should something happen to me. That is the goal of life insurance ~ transfer the risk from you to the life insurance company. Two Key Types: Term Life Insurance - This covers you for a certain period of time (think 10,20 or 30 years). Permanent Life Insurance - This covers you for your entire life (assuming premiums are paid). Insurance is just that, insurance. It is not an investment. You will be pitched countless "insurance ideas", always revert back to rule number 1 ~ If you don't understand the costs, fees, and structure don't do it. The starting point for life insurance is determining your need. What risk do you want to eliminate? Then determine what the is the best solution for you to solve that need. Specialty Insurance A professional sports career is like a piece of antique glass, valuable when fully intact but much less valuable if broken. We want to ensure you give yourself the best chance to cash in your skillset. Oftentimes this means transferring the risk that the glass could break to the insurance company. Specific Injuries Loss of Future Value Permanent & Total Disability These policies are hyper-specific to you and your situation. It is paramount you work with an advisor who specializes in athlete wealth management to ensure you are presented with all of your options. _____ Insurance is important. It is also misunderstood and misrepresented to professional athletes. You want to find someone who can provide advice but has no conflicts of interest in selling you a specific insurance product. At Moment Private Wealth, we advise on but make no money on insurance products. Simply put, this provides you the athlete the best possible advice conflict-free. Estate Planning I don’t like financial jargon ~ You know like “Estate Planning”, the first time I heard that I thought, “Isn’t that what old people do?” Well, let me ask you this… Have you worked hard to earn money from your sport? Do you want to make sure that money is protected? Do you want that money to have a future direction? If you are anything like me, your answer is a resounding yes. That is all estate planning is at its core. You see you get one of two options with your money ~ The Government Plan or Your Plan. Estate planning is the broad term for how you do this. So, let's break down the key factors to consider for professional athletes. Direction Guardianship - Who will take care of those in your legal care? Medical Directive – Who will make health care decisions if you can’t? Financial Directive – Who will handle your financial decisions if you can’t? Revocable Trust – Who will receive your money when you die and how will they do that? Pour Over Will - Where will all those key belongings go that aren't able to be titled in your estate? Consider your estate plan as the parking garage that houses your things. The direction is the guard at the exit to make sure those assets go where, when, and how you want. Protection Everyone can Google your name and figure out how much money you make. That level of public information requires proper protection. The parking garage you build around your assets (estate plan) provides you with the necessary protection. In athlete wealth management, we focus on the trust owning as much as possible while the individual (you) owns as little as possible. In reality, you still own and control those assets but from a legal perspective, there is separation. Titling The most common mistake I see is professional athletes do the work to build the parking garage. Documents are drafted and signed but the assets are never parked in the garage. Let me be clear, without proper titling of your assets those documents are paperweights ~ they do nothing. The key is ensuring your financial team helps you consider what assets should be titled in your trust and helps you execute that. Taxes The two knowns in life are death and taxes. They are inevitable and everyone knows it. What most don’t know is the government can tax even after you die ~ this is called Estate Taxes. Estate taxes work like this: The government takes a snapshot of everything you own upon your death, including any life insurance. Any money over $13.61M at the time of your passing is taxed at 40%. _____ As a professional athlete, you have the advantage of planning for this decades in advance. Done correctly you can limit or potentially avoid these taxes. So remember, when I said I thought estate planning was for old people? Ya not so much, when it comes to athlete wealth management it is a key component from day one. Investments On one side you have the advantage of the greatest superpower that exists with investing, time. On the other side, you have the disadvantage of a laundry list of unknowns. What does next year look like? What will my contract situation be? What would I do if my career stopped tomorrow? Investing for professional athletes is a constant tug between a decades-long time horizon and a day-by-day career. The best decisions always start with the end in mind. Consider this, your career ends, and your investments provide these two things: 1.      The flexibility to choose what you want to do next. 2.    The optionality to decide what that timeframe looks like. In the simplest form, this is the perfect outcome when investing money for athletes. You turn your future unknowns (an inevitable part of being an athlete) into something you control. Consider your investments in three buckets. 1)      War Chest – The investments that will be there for you no matter what. The returns are lower but the known is higher. Cash Bonds Private Credit 2)      Growth Strategy – The investments that will build long-term wealth while protecting the snowball you have built. Stocks Real Estate 3)      Aspirational Strategy – The investments that could be home runs but could be strikeouts. Private Equity Venture Capital Business Ventures Simply put, your core portfolio consists of buckets 1 and 2. You need enough there that can sustain your lifestyle forever before diving into bucket 3. Consider this, Warren Buffett has a net worth of $136 billion. More than 97% of that or $133 billion came after his 65th birthday. Buffett didn’t suddenly realize something he had previously missed. In fact, he didn’t do anything different. He just let time continue to be his superpower. Compounding is funny, it is hard to see until it is impossible to ignore. 8 + 8 + 8 + 8 + 8 = 40 8 x 8 x 8 x 8 x 8 = 32,768 See what I mean? _____ Athlete wealth management is about approaching investing like this: What is a good (if not great) rate of return we can sustain for the longest possible period in time? To win the game of investing, you just need to stay in the game long enough. After all, time is your greatest superpower. _______ Here is the deal ~ managing your wealth as a professional athlete from the start matters. You have one chance to do this right. Money mistakes you make are not like stubbing your toe, it is more like breaking your leg. You are on a rocket ship with limited fuel ~The best time to start looking at how to land that rocket is now. I say this because I have walked in your shoes. I made millions of dollars from the time I was 18 to 29 years old. I made smart money moves for a decade that set my family up for future decades. As specialists in athlete wealth management, we can help you do the same thing. If you are a professional athlete 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 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. Client 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.

Being a business owner is full of peaks and valleys. The journey through the valley has made you who you are today and you wouldn't change it for the world. After years of doing the hard thing you have built a successful business that has put you in a position where you have gone from building wealth to stewarding wealth. Wealth management for business owners is complex. In this blog, we will simplify the 5 key areas every business owner should know about. Wealth Management for Business Owners You are unique. You need advice that is tailored to you from a perspective that you can trust. Every good plan starts with a foundation. Here are the 5 foundational elements every business owner should have. Financial Planning - Building a plan with a clear roadmap to your goals. Tax Planning - Creating a lifetime tax strategy to avoid leaving the IRS a tip. Estate Planning - Giving direction for the assets you have and the people you love. Risk Management - Fortify your wealth to protect you from unknown risks. Investment Management - Build an investment strategy that complements your appetite for risk. Financial advisors are known to explain topics with words that are confusing and hard to follow. In this blog, we will educate you with simple and clear terminology you can understand. Financial Planning for Business Owners Back in the 90's before the internet was around road tripping was a thoughtful quest. Prior to your travel you would call up AAA and outline the route you wanted to take to your destination. Then they would mail you a map with your route outlined. This was your roadmap to get to the destination. The problem? You couldn't make adjustments on the fly. A financial plan is the same. This is not a set it and forget it plan, It is a living breathing document that changes as your needs and goals change. So how do we build out your plan? It all starts with determining our final destination. Often we see business owners fail to set a clear path forward. When you are setting goals we want you to think about them in the same way you build goals for your business. They need to have all the components of traditional SMART goals. Specific Measurable Attainable Relevant Time Bound If your goals don't have these characteristics it will always feel as though you are behind and chasing the next big thing. As a business owner, you are used to moving the goalpost. At times this can be helpful, but when you are building out a financial plan it is not. Once you have your goals it is time to build out the roadmap. The roadmap is going to have 3 inputs. Income Spending Saving Our goal when building this roadmap is to forecast what inputs we need to meet your goals. Building a roadmap should give you a clear picture of what you need to do today in order to get the desired outcome in the future. If you can't answer these questions your Trip Tik is off course. Is what I am saving enough? Is my spending at a level that I can sustain? Do I know what I need to do to reach my goals? Being able to answer these questions will put you in a situation to succeed. So remember financial planning for business owners is a GPS not a Trip Tik. Tax Planning for Business Owners Tax planning is a never-ending game of chess. There are always moves to be made both today and in the future. Our goal is that we pay our fair shares as a business owner but never leave the government a tip. 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 now. 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 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. 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 being in the 15% effective 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. 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. Estate Planning for Business Owners 99% of business owners we meet with are confused about what their estate plan says. Although there can be a lot of legalese in estate planning conversations typically we are trying to meet 3 primary goals. Give direction to your assets in advance. Give direction for how to take care of yourself and your loved ones. Save money on taxes. We can meet each of these goals by implementing an estate plan with these 5 core components. Trust Your trust is going to be the most important tool in your toolbox. First, what goes into a trust? Think about this as anything with a physical title. Examples of this are brokerage accounts, business assets, homes, and cars. Assets with a title are meant to go in your trust. This is important for two primary reasons. To Avoid the Probate Process To Give Direction to Assets First what is the probate process and why do we want to avoid it? Probate is the government's plan to distribute your assets for you. This process has many downsides. Let's just name a few. It is a public process Anyone can come make a claim to your assets A judge gets to decide where assets go It is costly, 5% of your assets typically You don't want this plan. The nice thing is that with a properly set up trust all this can be avoided. Our second primary reason is to give direction to assets. Unlike a beneficiary on a brokerage account, a trust can always have a backup. After all, you have worked your whole life to have the assets on your balance sheet. Don't you want them to go where you decide? Health Care Directive Our goal with estate planning is to leave nothing up to chance. This includes your health care. You have heard that without your health you have nothing. A health care directive is the best tool to allow you to control your path in the health care system. In your directive, you can state what type of treatment you want as well as treatment you do not want. Do you want life support - You Decide Do you want to be resuscitated- You Decide Do you want to be kept alive at all costs? - You Decide I imagine you would want to make these choices for yourself. Outside of this being helpful for you it is also helpful for your loved ones. No one wants to put a spouse, friend, or family member in a position where they have to decide whether or not to pull the plug. Guardianship You likely fall into one of these three categories. You have kids, you know someone with kids, or you want kids in the future. In all of these categories, you have witnessed a parent with unconditional love towards their kids. With this love, we want to ensure that we are taken care of. This is where guardianship for your kids comes into play. Every estate plan should include guardianship for minor kids. In this guardianship, you can direct specifically who will take care of your kids and how they will be taken care of. Pour Over Will The most common arguments that happen when distributing assets of an estate can be avoided with a pour-over will. A pour-over will can give direction to all of your assets without a title. Here are a few examples. Mom's wedding ring Dad's famous paintings The priceless family heirloom A pour-over will allows you to assign these assets to individuals to avoid any family disputes during the distribution process. Financial Power of Attorney Similar to a health care directive a financial power of attorney allows you to state in advance who gets to make financial decisions for you. When setting up a financial power of attorney it is important to understand there are two different types. Springing Power of Attorney - Your authority springs into action when an event occurs. Durable Power of Attorney - Your authority is effective immediately. When setting up a power of attorney know which document you are signing as it can have serious implications for you and your family. So remember estate planning for business owners doesn't need to be confusing. Lock down your legacy today with an estate plan that is tailored to your needs and goals. Risk Management for Business Owners Protecting your assets and your family from risks becomes a priority when there is more to lose. As your net worth increases the downside risk increases. Your risk management plan should cover two basic areas. Insurable Risks Uninsurable Risks An insurable risk is going to be one that we can buy insurance to protect against. These are the two most common insurable risks we see. Personal Liability Protection This type of insurance is going to protect you from a lawsuit brought against you. The most common situation we see is when someone is injured while you are driving a car or when a worker is at your home. We protect against this by having the correct liability coverage on your home, auto, and umbrella. More times than not we see business owners underinsured in this area. A good rule of thumb is to have your net worth covered in total liability protection. Life Insurance Protection Life insurance is there to protect your family if you can no longer provide for them. When we build out life insurance protection for business owners there are two needs we regularly see. Income replacement for your family. Buyout of your company shares from a business partner. Remember life insurance is there to protect your family on your worst day. It is not there to be your highest performing asset. An uninsurable risk is one that a business owner can't use insurance to protect against. Although you can't use insurance to protect these risks they are equally as important. These are the two most common uninsurable risks we see. Bad Investment in Your Business Investing in your business has gotten you to this point, but when is enough enough. One of the most common risks we see for business owners is investing too much money into an ineffective deal. This could include a new verticle in your business or even going all in on your current profit center. Exposing yourself in your business can happen, but with proper guidance, you can avoid this situation. Poor Debt Management Leverage can be the catalyst you need to take your business to the next level. Many business owners have used leverage to their advantage. Debt can be like playing with fire. One wrong move and you have set your business on fire. When you are playing with fire you need to know why you have the debt and what your plan is to get rid of it. Don't get caught in debt payments and let it ruin your business. Risks are everywhere in life. A risk management plan for business owners should be unique. Tailor your risk management plan to your needs. Investment Management for Business Owners You built wealth by concentrating. At some point in time, your largest asset was your business. That could be today or it was at some point in the past.. Concentration is the best way to build wealth and it is also the fastest way to lose wealth. Our job isn't to try and hit another home run. You have already done that. Our job is to diversify and keep you rich. We simply investment portfolios into 3 fundamental buckets. The War Chest – The bucket that we have for peace of mind. The Growth Strategy – The money you have set aside for long-term investments. The Aspirational Strategy – The money you have allocated for higher-risk strategic investments. Let's look at what goes into each one of these buckets. The War Chest The war chest is our safest money. These are the assets we need to protect. The way we do this is by investing in assets we know will be there for us in the short and long term. Money Markets Municipal Bonds Corporate Bonds Government Bonds We can determine the amount that needs to go into the war chest by referencing our financial plan for business owners. The Growth Strategy The growth strategy is what is going to keep you wealthy. As much as we would love to lock everything in the way chest that would not be a sustainable way to compound wealth. The assets in our growth strategy are going to be long term investments that we will focus on growth. Typically these investments include: Diversified Public Equities Public Real Estate Investments Public Alternative Investments These investments will have significantly more volatility than the war chest but they will also have significant growth opportunities. The amount in this bucket will be determined by your financial plan along with your risk tolerance. The Aspirational Strategy This is our legacy bucket. These assets will be the most aggressive investments and are assets that we don't need to meet our financial planning goals. Often these assets will be illiquid and have a risk of losing some or all of your principal investments. The types of investments we see in the aspirational strategy are the following. Private Equity Investments Venture Capital Investments Private Real Estate Deals Buying a Small Business These are the sexy investments that everyone wants to be a part of, and the reality is they have the highest chance of outsized rates of return. Like anything in life, there is no reward without risk. It is our job to help you navigate these waters and ensure you have the proper amount in this bucket based on the risk you want to take and the ability you have to take risks. So remember investment management is not a one size fits all. When it comes to investment management for business owners you need to take a customized approach to ensure you are effectively allocating money. 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. 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 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 andultra-high-net-worth client in mind. Does Moment Private Wealth help you 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. Can Moment Private Wealth help business owners with succession planning? Yes, this is part of creating a roadmap for your goals. Having first-hand knowledge of selling a business will allow you confidence throughout the process. Many business owners get one chance to sell a business. Having a firm that can help is key. 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.

For some of you reading this blog, you have had a loved one pass away. You know that those days are truly some of the darkest. Today we are going to outline a tool you can utilize to protect the people you care about most. Life Insurance Life insurance often has two spectrums of consumers. They either love it or they hate it. Today we are going to focus on education. Why should we buy life insurance? When should we buy life insurance? Specific examples of the benefits of life insurance? These are only a few of the many questions you will get answered when reading this blog. Let's dive in. Why do we buy life insurance? There are many applications for buying life insurance. Today we are going to break down 3 of the most common. Each of these has a unique solution we are trying to solve for. The common thread that runs through each of these is that you almost never expect each of these to happen in an instant. On your worst day, we need your family to be protected. 1. Supplementing Income For Your Family Life insurance serves as a crucial income replacement tool, guaranteeing that your family's financial needs are met in your absence. Case Study: John's Income Replacement John, the primary earner in his family, understands the significance of financial protection for his loved ones. He has created a great life for his family. Over the course of many years, he has built his business to the point in which his wife can stay home with his kids. He has upgraded his lifestyle with a new house and cars. John is proud of the life he has built for his family. John begins to wonder what happens if he is no longer around to provide for his family. This is when he starts considering insurance. The Need: A lump sum of money to allow his family to continue living their life. John also has voiced he wants to be able to pay off his mortgage and all liabilities. His goal is to allow his family to live the same life they are living today without any additional income from his wife. After speaking with his advisor they determine this is $3,000,000 of life insurance. The solution:  After a deep conversation about John's need for life insurance his advisor recommends a Term Life Insurance Policy. Let's look at the pros and cons of this type of policy. Term Life Insurance Summary: A term life insurance policy allows you to pay a specific dollar amount for a specific number of years to get the right to a specific death benefit. Example: $3,000,000 Death Benefit 20 Year Term $1,200 annually This means that as long as you pay your $1,200 dollar premium every year your family will receive $3,000,000 of death benefit if you die anytime within the next 20 years. 2. Buy-Sell Insurance for Entrepreneurs For entrepreneurs, life insurance facilitates a seamless transfer of ownership in the event of a partner's demise. Case Study: Sam and Michael's Business Agreement Sam and Michael, co-founders of a thriving tech startup, recognize the importance of safeguarding their business interests. What started as a project in college has turned into a multi-million dollar operation. Their most recent unsolicited LOI recently arrived from a national private equity firm. When they saw the number they immediately saw the problem. We have a big issue if one of us passes away. We do not have the financial means to buy the other partner's shares. The Need: When you own a business with a partner it is key to ensure the business continues on if one of you suddenly passes away. The best way to protect from this happening is planning. The solution:  After reviewing each of their personal balance sheets we determined neither had enough liquidity to afford the shares of the business. After discussing the different types of insurance we have determined that we do not need cash value but rather a death benefit that can purchase the shares. Term Life Insurance Summary: A term life insurance policy allows you to pay a specific dollar amount for a specific number of years to get the right to a specific death benefit. Example: $5,000,000 Death Benefit 10 Year Term $1,000 annually This means that as long as the company pays the $1,000 dollar premium every year your partner will receive $5,000,000 if you pass away. He can use these funds to purchase the shares of the company. When you execute a buy/sell agreement it is key to ensure the beneficiaries are set up properly and it is legally documented in a buy/sell agreement what will happen if you pass away. Without proper legal documentation, this could be a nightmare. 3. Estate Tax Planning Life insurance serves a critical role in estate planning by furnishing liquidity to cover estate taxes and preserve family wealth. For more information on estate taxes check on this blog. Case Study: Sophia's Estate Planning Strategy Sophia, a prosperous entrepreneur, meticulously structures her estate plan to plan for estate taxes. Today her net worth is $30,000,000 well over the $13,610,000 lifetime exemption. She realizes her estate tax bill is going to be millions of dollars and wants to do something about it. The Need: When you have a net worth over the estate tax limit you need to plan for estate taxes. In this scenario, she is going to owe approximately $6,500,000 in taxes at her death. The solution:  There are two components to this solution. The first is the insurance policy. We would look into a permanent policy for this need. TWe are not solving for a known time frame but rather a a need for a lifetime. The second is how we own the policy. Let's look at both. Permanent Life Insurance Summary: Permanent insurance has multiple choices that we could look at, but today let's focus on whole life insurance. For this type of solution, we pay a premium for our entire life to get a death benefit that is guaranteed for life. Other benefits to this type of policy include cash accumulation and the ability to borrow against the cash value of the policy. Example: $6,500,000 Death Benefit $50,000 Annual Premium Protects you for Life Note that your premium will be much higher in these types of policies and will vary dramatically based on how you design the policy. Just like selling your business, the terms are sometimes more important than the price. With a permanent policy, the design is more important than the annual premium. When you are executing a permanent life insurance policy for estate taxes it is key to ensure this is outside of your estate. Typically these are held in an ILIT (Irrevocable Life Insurance Trust). This is important because if you do not have the policy outside of your estate it will be subject to further estate taxes. ------------------------------------------------------------------------------------------------------------------------------ At Moment, many of our clients want to protect themselves on their worst days. We have found that life insurance can be confusing. This is why we educate first. If you are confused about your life insurance policies and want answers schedule a call, and talk with a Moment founder. Get in Touch With An Advisor *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.