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

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

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

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

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.