Athlete Wealth Podcast

Why Focusing on Investment Returns Isn’t Enough | NFL Players' Series #2 | Zach Miller & Erik Averill

Episode Summary

And the importance of building a financial team that has your best interests in mind

Episode Notes

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

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

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

Key Topics Discussed

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