Pro athletes Isaiah Thomas and Dexter Fowler talk about the best money tips

Malerapaso | istock | fake images

HUNTINGTON BEACH, Calif. — Professional athletes face a difficult task early in their careers: learning to handle large sums of cash as they rocket to stardom, often at a young age.

Isaiah Thomas, a star basketball player, and major league baseball player Dexter Fowler sat down with CNBC at the Future Proof Wealth Festival to talk about the money lessons they’ve learned during their professional careers. Financial adviser Joe McLean, who works with Fowler and Thomas, also shared advice about his work with wealthy athletes. What NBA star Klay Thompson and professional golfer Sergio Garcia.

Here are six of his best money tips.

1. Save more than you spend

Isaiah Thomas during the NBA All-Star Game in 2016.

Else | Getty Images Sport | fake images

“Once I got money, once my pro career started, learning to save was the biggest thing I learned,” said Thomas, 33, a point guard who currently a free agent has played for Many teams during a decade-long career, and was a two-time NBA All-Star during one season with the Boston Celtics from 2014 to 2017.

When their first paychecks rolled in, Thomas and McLean set parameters: 70% of every net dollar went into a savings deposit. This made saving automatic, said McLean, chief growth and innovation officer and senior general manager. for MAI Capital Management LLC.

“Saving more than you spend was our philosophy every month,” Thomas said.

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The percentage saved can change, depending on the athlete and the stage of their career, McLean said. It could be 40% on a player’s first contract, 60% to 70% on the second and 80% on the third and beyond, as “cash flow is very high” at that point, McLean said. .

This approach helps players choose the lifestyle they’d like to live “before your lifestyle chooses it for you,” he added.

“You have to make the decision from the beginning” to create a habit, he said.

2. ‘Always be prepared for rainy days’

“Always be prepared for rainy days,” said Fowler, 36, an outfielder who won a World Series with the Chicago Cubs in 2016. currently a free agent

“You never know what’s going to happen,” he added. “You [could] have a car accident; you could stop working.

“Hope for the best, but prepare for the worst.”

Dexter Fowler during Game 7 of the 2016 World Series.

Gregory Shamus | Getty Images Sport | fake images

Fowler describes himself as a lifelong saver. When he was a child, he kept physical birthday checks from family members, because he didn’t know they had to be cashed.

“People live for the moment,” he added. “Don’t get me wrong, have your vice.

“I like watches; that’s my vice, but I don’t have 10 vices,” Fowler said. “That’s how you go crazy, you’re going to spend money but spend it the right way.”

3. Consider the financial consequences

For people who earn substantial sums of money, there is no immediate consequence of poor financial decisions, McLean said.

“You may have a large Amex bill, [you’re] swipe, make a couple of big purchases, but because you’re still putting money in, the card still works,” he said. “You are not sorry”.

As McLean explains, “the laws of finance do not follow the laws of physics.”

This is what happens in sports: you save a lot of money but you have a great lifestyle and you don’t let it get worse.

joe mclean

founder and CEO of Intersect Capital

“If you’re walking on a log, you have to be aware of where you’re going, and if you remove it, you fall into the water,” he said. “If you take your eyes off your money when you’re making a lot of money, nothing happens.”

Until the money runs out, that is.

“A lot of athletes think it’s never going to stop, or it’s never going to end,” Fowler said Tuesday during a question-and-answer session at Future Proof. “But he does.”

4. ‘Live as if you were already retired’

“Live like you’re already retired,” Fowler told CNBC.

The idea is: If you overspend during your working years, it’s hard to switch to a more frugal lifestyle later on, which may be necessary for someone who doesn’t have the savings to support the overspending.

With this mindset, “you don’t have to change your lifestyle when you retire,” Fowler said.

“And it’s hard to do,” he added. “You’re in locker rooms and clubhouses… [and] you see a guy riding in a [Lamborghini].

“You’re like, I’m making seven times what you’re making, and I don’t feel like I can afford that.”

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5. Let your money accumulate

6. Look beyond the lump sum

Fowler earned a signing bonus worth almost $1 million in 2004, when he was drafted by the Colorado Rockies. He was fresh out of high school, 18, and had gotten his first contract, he said.

“You’re sitting there and you’re like, do I have $1 million?” he said. “A million dollars then was a ton of money.”

“But $1 million doesn’t get you very far,” he added.

For ordinary retirees, the same principle applies: Saving $1 million may seem like a large sum of money to live large, but it may not go as far as people hope in a retirement that can last three decades or so. plus.

Upon receiving his signing bonus, Fowler immediately wanted to buy a car. All the newly recruited players were buying Escalades and Range Rovers, so he bought a Range Rover, against the advice of his father, who recommended leasing rather than buying a car, Fowler said. (Fowler now rents his cars exclusively; he owns two Teslas. The cars are “depreciating assets,” he explained.)

Taxes also affected a substantial portion of his signing bonus, Fowler added. Then he realized, when he was playing minor league baseball after the draft, that it’s hard to live on that salary, which brought him about $300 to $400 every two weeks, making the bonus essential to help make ends meet. month.

“I saw a lot of guys get jobs in the off-season,” he said. “I was lucky I didn’t have to do that.”

Correction: This article has been updated to reflect that Joe McLean is currently Chief Growth & Innovation Officer and Senior Managing Director of MAI Capital Management.

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