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“5 Things NFL Athletes Wish They Knew About Their Finances When They First Started” With Justin McCarthy

I had the pleasure to interview Justin McCarthy, a financial adviser to many NFL pros.

Can you share your “backstory” with us?

Hi, I’m a managing Partner of the NYC office of Mariner Wealth Advisors. I have been working here for 10.5 years. I have a B.A. in Economics from Boston College and an MBA from Fordham University in Finance & Taxation with a Specialization in Personal Financial Planning and am an Enrolled Agent with the IRS. I am also registered in the NFLPA Financial Advisors Program.

How did you get involved in wealth management?

I had a background in Finance and developed an interest in investments early on as an undergraduate. Through my MBA program, I became more focused on wealth management as I added a second concentration/major to Finance(Tax). My MBA program had a CFP focused Specialization titled “Specialization in Personal Financial Planning” which I became interested in pursuing. That further fueled my interest.

Can you share 5 things NFL athletes wish they knew when they first started the NFL or 5 things you recommend they do to best manager their finances?

1. Taxes — Make sure to engage an accountant or advisor that performs taxes, in order to properly communicate withholding details to payroll. Players are often surprised come tax deadlines, and mishandled taxes can even derail budgets.

2. Budget — Coordinate a budget that coincides with your financial situation and set things up administratively in a way that facilitates that budget. For new players, large checks come in over short periods of time, so it is easier to lose track of what you are spending, especially compared with a typical individual’s compensation scenario.

3. Build/Protect the foundation — Make sure the proper liability coverages are in place to protect you in light of unforeseen circumstances. These include renters, homeowners and umbrella policies.

4. Keep things simple — Especially in the early stages of an NFL career — players shouldn’t rush into creating foundations and business entities. These may make sense at some point, but much uncertainty clouds career longevity and the potential success of these endeavors. My advice is to avoid creating a financial plan more suitable for an 8–10 year vet when you are in your rookie contract. Your personal financial plan should grow and evolve with you, not ahead of or behind you.

5. Don’t rush into investments — Players should weigh their investment options considerably, especially illiquid ones. Make sure you are in control of money transfers versus giving power of attorney to someone.

What were your first pieces of advice to athletes, such as client LJ Smith, a former tight end for the Philadelphia Eagles and Baltimore Ravens? How did you help guide him through his NFL experience?

My first pieces of advice to new athletes such as LJ were that financial plans don’t need to be complicated for them to be effective. He, like many young athletes, was made to believe that things were too complicated for him to understand. Quite the contrary I believe that part of our role as an advisor to pro athletes is to teach and help them understand the pros and cons of different decisions/choices/opportunities and empower them to make their own decisions versus taking that control away from them. I helped guide him by walking him through each recommendation — whether it was related to taxes, investments, budgeting or insurance. We would look at it on paper, and go through the different scenarios to determine how they would/could effect his balance sheet, so he could see it unfold in front of him.

Can you share actionable insights for newly wealth athletes on saving, investing and budgeting?

First and foremost, newly wealth athletes should set up accounts to coincide with their budgets. For example — your average young individual is forced to budget because they get paid weekly or monthly and early on it might be just enough to make ends meet. Naturally as their careers grow, they learn to budget out of necessity. On the flipside, a pro-athlete is accumulating wealth beyond what is needed just for necessities and personal expenses. This money also often comes in a short period of time during the calendar year (NFL is typically September-January). Players must consider long-term budgets, but also short-term budgets while they are off-season and don’t have paychecks rolling in. For new athletes, we create a scenario similar to the average young person — there compensation goes into a savings/investment account and then an automatic transfer is setup to go to their checking (spending) account for the first of each month for the allotted budget amount. This way players can monitor if they are spending too much and it allows us to determine if additional capital will be needed in a particular month.

What financial mistakes do you commonly find newly wealthy athletes making?

We often see tax schemes, lack of budgets, poor/inappropriate investments and a gap in or lack of crucial insurance policies.

Do you have advice for athletes in managing large financial windfalls or avoiding scams?

Remember that pro-athletes leave the sport at a young age, despite even the longest careers. Set up your balance sheet to grow and protect you for a long-term retirement.

What you can learn from athlete’s money management strategies if you’re not one?

Non-athletes and athletes alike must focus on the health and growth of their entire balance sheet, not just certain aspects of it. Whether it be real estate, investment accounts, retirement accounts, etc. — they are all puzzle pieces that must fit together.

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