There are important lessons to be learned from a plethora of athletes who have financially failed. A common denominator often, is the trust athletes have placed in the wrong professionals. We have all heard of a number of cases all over the world, where lawyers, accountants, investment advisors, etc have defrauded athletes by advising them to invest in various potentially “high and fast profit” schemes. In a lot of cases, athletes not only lost the money they invested but also ended up being accused of tax fraud.
During different stages of your life, you will have to interact with many professionals who will help you with your athletic, financial and business endeavors. Creating the right team of trusted, reputable, and established professionals within any given field is important to your success. Once you have the proper team in place, your advisors will support your efforts in ways you can’t accomplish alone.
It is very important to interview advisors before choosing to work with them and choose people who not only are educated, but whom you like on a personal level. These relationships will be long-term, so you want to work with people you enjoy being around. If your financial planner, realtor, lawyer, or tax professional is a trusted advisor, and you know he or she has been successfully managing and investing money for years, that person may be an excellent resource. You should not rely on family members or even friends to guide your financial decisions because this can lead to disastrous effects, as we have seen in the much publicized Messi tax case.
While it’s important to have a great team on your side, it’s also important to remember that many financial planners, investment bankers, realtors, loan officers, and other financial professionals often work on commission. That means they only get paid if you invest in what they recommend, and may not always give the best advice or have your best interest in mind. Your advisors just serve the purpose of informing you about all your available options but your financial decisions are ultimately your own. You should also be aware of financial professionals who promise huge returns on the investments they recommend. There is no such thing as a “free lunch” and you should always remember it. The promise of exorbitantly high returns should be a warning that you should stay away from such professionals.
Your financial team should ideally consist of a lawyer who specializes in business, tax and estate matters, an accountant/tax advisor, a financial planner or money manager, and an insurance specialist. Your financial team should work closely with you and your agent in order to always be on the same page and to ensure that everyone’s input is taken into account when major decisions will have to be made.
So how are you going to choose your financial freedom dream team? Here are a few tips.
- You want to find professionals who will give you the best possible advice – not the ones just looking after their own interests, so make sure that they do not work on commission.
- You should be aware that certain financial professionals are experts in a particular service, but not in others. An accountant for example cannot also do your financial planning; you need a certified financial planner to do that.
- You should not rely entirely on one financial advisor, you need to build a collaborating team comprising of different types of expertise.
- Ensure that your financial experts welcome input from the other professionals in your financial team.
The best advice that we can give you though, is to educate yourself on basic financial and investment concepts so that you are in a position to evaluate the advice given to you and make financially sound decisions. And remember, basic financial knowledge can really save the day when it comes to financial decisions with a life-long impact!