Creating a support circle

Key topic

Athletes are advised to have a support circle in place, which will help them in the implementation and management of their financial and life plan.  They first have to deal with fulfilling their sports career needs in terms of support, by having a mentor, an athlete mindset and performance coach, an agent, etc.  Then, athletes need to become acquainted with how to assemble a competent business/financial team to help them design and implement their financial lives.

There are important lessons to be learned from a plethora of athletes who have financially failed, and 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, agents, 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 had invested, but also ended up being accused of tax fraud.

Learning objectives

• Creating the right team of trusted, reputable and established professionals is important to the athlete’s success.
• Your advisors just serve the purpose of informing you about your available options but the ultimate financial decisions are yours to make.
• The right agent will do their best to create the right opportunities for their athlete client, so choosing a good agent is crucial to a successful and prosperous career.
• Each athletic career is a small business and a good business manager runs the business efficiently and ensures that everything off the field goes smoothly.
• Attorneys come with different types of expertise and they can protect athletes in a number of ways.
• Successful athletes around the world have had mentors who helped them spread their wings and unleash their potential.
• Solo-sport athletes move around a lot, both nationally and internationally, therefore they need to have advisors with international expertise.
• Athletes need to know how to protect themselves from being victimized by financial mismanagement and investment fraud.

Introduction

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. According to a study, between 2004 and 2017, athletes were defrauded of $500 million. In a number of these cases, athletes not only lost the money they had invested but also ended up being accused of tax fraud Creating the right team of trustworthy, 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.

We consider it important to raise your awareness as to the type and caliber of advisors you need in your team. We want you to be aware that being surrounded by the right people will take you places and will make you a winner, not just in your sport, but in life as well! As solo-sport athletes your circle is naturally restricted, which deems the appropriate selection of competent and trustworthy advisers, a necessity.

Let’s start today’s lesson with a video on how Peggy Fulford, who claimed to be a financial advisor, defrauded her athlete clients.

When hiring a financial advisor goes wrong

The complementary relationship between financial literacy and the athlete’s advisors

Athletes, particularly the most successful and famous ones, have an army of advisors behind them, regulating their every move and advising them on various aspects of their lives ranging from investments to public conduct. Nonetheless, a certain degree of financial literacy and knowledge of basic business concepts is still vital, irrespective of how many advisors an athlete has at their back or who those advisors are. At the end of the day, nobody cares as much about your future as you and you should never delegate the handling of your interests entirely to your advisors. Hence, the relationship between financial literacy and your team of advisors should always be seen as complementary and not as substitutive or mutually exclusive.

The accessibility to proper and all-encompassing advice of course depends on the athlete’s financial and public stature. Put simply, an ATP Top 10 tennis player will have access to more prestigious advisors, as opposed to an ATP Top 500 tennis player.  However, the fact that no matter the caliber of your advisors or how many of them you have, basic financial knowledge is vital.

There are several reasons as to why. Nobody cares about your financial well-being and future more than yourself. Financial advisors may harm your wealth either on purpose or by accident. We have heard of several cases where financial advisors cost their clients hundreds of thousands and even millions by investing recklessly; a lot of advisors work on commission and so may profit by the investment itself rather than the return.

Moreover, due to the lucrativeness of the sports industry, a lot of incompetent individuals have, and are trying to penetrate the market, which can cause real financial damage to anyone who trusts them. The reasons are endless but the conclusion is that to avoid all these, the athlete must be in a position to audit and question the advisor’s proposals and recommendations instead of just blindly following them. Given sufficient effort, the athlete may also be able to offer their input and even their own recommendations in financial affairs.

On the other hand, we should not overlook the beneficial effects of professional advisors, provided that the athlete is financially educated. Even if the athlete manages to become well-verse with financial and legal matters, advisors can provide other benefits as well.

You can think of financial education as a system of checks and balances which aims at limiting your advisor’s authority over you. When you make sure that you authorize but not delegate entirely and when you do not allow them to exercise a monopoly over your information then your advisors can be your greatest ally in your pursuit for financial security, both in the short-run and in the long-run. In other words, it will go a long way in ensuring your financial future when you view the relationship between your financial knowledge and your advisors as complementary.

Selecting the most suitable advisors

Selecting the most suitable advisors is not an easy task.  It is very important to interview advisors before choosing to work with them and it is also very important to choose people who not only are educated, but whom you like on a personal level.  It might be the case that you are stuck with that person on a train, plane, event for hours, so you want them to be someone that you have chemistry with and enjoy their company. 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 they have been successfully managing and investing money for years, that person may be an excellent resource.  You should not rely solely on family members or friends to guide your financial decisions; you can involve family and friends in the process but mainly as a second set of eyes and ears.

In recent years, there has been a marked rise in professionals trying to penetrate the “niche” market known as sports advisory whether of legal or financial orientation.  These people might even manage to land some clients in the short-run as well, but they soon find out how complex, specialized and multifaceted the world of sports is and they may create a mess for them and their clients. Thus, you should look for people who possess a true and deep understanding of the sports industry, because it will not only increase your chances of maximizing and capitalizing on your potential, but it will also manifest itself throughout the relationship. For example, an experienced and knowledgeable advisor knows better than to call their athlete-client after losing a tournament final; also seasoned advisors are aware that when it comes to athletes who travel, compete and train all the time, they will have to be persistent about finding a window in the athlete’s busy schedule to discuss important issues and expedite financial and other processes.  Athletes are not available all the time and the athlete’s advisors need to be able to work around that while getting done what has to get done.

While it’s important to have a great team on your side, it’s also important to remember that some 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.  You must always try to understand what motivates someone; which goes back to our previous point, of surrounding yourself with people you like and trust. You should be sceptical towards financial professionals who promise huge returns on the investments they recommend.  The promise of extremely high and unrealistic returns may be a warning sign that you should stay away from such professionals.

If you do not have a team of advisors in place, you need to start assembling this team immediately.  A team of advisors, who can help us in our life and financial plan, is a necessity to almost all of us, regardless of the career path we choose to follow, even more so to professional athletes.

To start with, you definitely need to have a mentor who will steer you in the right direction and on the right path, and who will make sure that you will stay on track.  It is preferable that this mentor is a seasoned and experienced person and someone you trust.

In addition to your mentor who will guide you through your overall life plan, you need to have the insight and support of someone who understands the hurdles of an athletic life and more specifically the particularities of a solo-sport career.  This person could be either your coach or somebody from your coaching team. It is quite normal for athletes to be supported in their athletic careers by their coach or by someone on their coaching team.  Seek to develop such a relationship either with your coach or with a member of your coaching team because it will benefit you in a number of ways.

We also recommend that athletes seek the support of an athlete mindset and performance coach to offer psychological and mental support throughout the athlete’s sports career. An athlete mindset and performance coach will help you deal with self struggles and game anxiety, by teaching you how to master your mindset and win the mental game first.  This type of coach can really help you grow as a person and can also help you build resilience, confidence, discipline and consistent performance, through mindset training.

To design and implement your desired financial future you will also need to have a financial team. Your financial team should ideally consist of a business manager, an attorney 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 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.

1. 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.
2. You should be aware that certain financial professionals are experts in a particular service, but not in others. An accountant for example may not also do your financial planning; you need a certified financial planner to do that.
3. You should not rely entirely on one financial advisor; you need to build a collaborating team comprised of different types of expertise.
4. Ensure that your financial experts, welcome input from the other professionals in your financial team. In other words, that there is synergy and collaboration in the broader team.

The best advice that we can give you though, is to educate yourself on basic financial and investment concepts so that you are able 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!

Action Steps – Exercise 1 (5 minutes)

Ask athletes: Which type of advisor do you think it is absolutely necessary to have during your athletic career and why? Take 4 to 5 answers and continue with an open discussion

Choosing your agent

Selecting an agent is one of the most important decisions you will ever make.  Choosing the right agent, the person who will guide, mentor and maximize the value of the athlete is an important decision.  In a short career that lasts no more than a few years usually, every decision counts.  Thus, any decision the athlete makes is critical and should be made carefully and through careful evaluation of every relevant detail.

Athletes need to search for an agent who will help them maximize their value.  Having a network of fellow athletes, coaches and other sports professionals will give you the opportunity to meet with many agents.  When evaluating agents, you should make sure that at the very least they have the following qualities/characteristics:

• They are trustworthy
• They are honest
• They have a good reputation
• They are accessible
• You matter to them

During the selection process you should also look into the agents’ client lists.  The size and composition of an agent’s client list is usually indicative of how successful the agent is.  The success of the agent’s clientele is one of the things that an athlete should check when evaluating agent options.  The age of the agent’s athlete clients is another factor that should be examined; a balance of client ages is a good indicator that the agent has a steady flow of clientele which in turn indicates that the agent is a competent and trusted one.

Once athletes choose the agent they consider the best fit for them, an agreement has to be signed for a certain period of time where the athlete will be considered their agent’s ‘asset’.  The agreement between the athlete and the agent will be on a revenue sharing basis where the agent usually gets a percentage of the athlete’s contract(s), and in some occasions may get part of the athlete’s transfer fees.

You also need to be aware of the responsibilities of sports agents towards their athlete clients, the main ones of which are listed below:

• They represent and promote athletes in dealings with current and prospective employers.
• They develop strategies for their clients’ athletic careers so as to ensure their clients’ success.
• They are responsible for finding employment for their athletes, for handling their sports contract negotiations and for dealing with all athletic issues that may arise.
• They handle sponsorship and endorsement contracts for their athletes and coordinate the athlete’s promotion activities.

Some of the elements that should characterize the dynamics of your relationship with your agent are excellent and regular communication, transparency, trust and understanding. Besides handling the athlete’s career, a good agent usually acts as some fort of a mentor to athletes.  When the athlete is faced with difficulties and cannot handle pressure, the agent usually intervenes and makes sure that the athlete handles things properly. In a way, they complement the coach in guiding the athlete, albeit, in different things.

Real Life Example (5-minute discussion) Perhaps the most famous agent-athlete relationship in the world is Cristiano Ronaldo and his agent Jorge Mendez for whom the Portuguese megastar bought an island as a gift for his wedding; yes, an island. There are however, other low-profile and silent cases which are equally successful. Such is the relationship between Roger Federer and Tony Godsick which goes back 15 years Federer and Godsick enjoy a relationship which goes much deeper than sports as the two joined forces for business ventures outside of tennis. For example, in 2013 they launched a management company called Team8 which currently handles a lot of heavyweights. These business endeavors made Federer the highest-earning athlete in 2020. The Swiss sensation earned $100 million from endorsements alone. In a recent interview, Federer said: “Tony and I have been working together for more than 15 years. We have developed a good sense of trust to make sure we are aligned with the same goals.” What do you think about this relationship?

Action Steps – Exercise 2 (10 minutes):

Ask the following questions:

• When you first picked an agent, what qualities were you looking for? Did it help you to recruit a competent agent?
• If you were to pick an agent now would do it on the same basis as in the beginning of your career or would you look for different qualities?

Please justify your answers.

A business manager is a necessity for professional athletes

As a professional athlete, you know that managing your day-to-day affairs may prove to be quite burdensome.  Your athletic career is a business in itself and you need to pay your full attention to it, therefore you will need someone to run the administrative aspects of this business, an athletic business manager.

Athletic business managers handle the athlete’s day-to-day affairs and they make sure that both the financial and business aspects of an athlete’s sports career run smoothly.  As mentioned above, each athletic career can be considered a business of its own and as such it needs a business manager to run it.

Your business manager is the person who deals with all of your daily responsibilities, not just the financial ones, but anything that needs to be taken care of, including yours and your family’s travel arrangements, house maintenance issues, shopping and many more.  A business manager is necessary for the optimal functioning of your business operations so that you can devote your mind, time and effort to your ‘athletic operations’.

Business managers have numerous responsibilities that revolve around making it easier for their clients to focus on winning, without worrying about the business or organizational side of sports.  In addition to handling the day-to-day business and financial matters, an athletic business manager is somewhat of a spokesperson for their client, charged with making sure all their needs are met and that they are in the best possible position to succeed.

Obviously, your choice of a business manager is instrumental to your overall success and you need to be very careful when selecting such a person.  First and foremost, since this person will be the buffer between you and the rest of the world and you will probably be spending a lot of time together, you need to like, trust and be comfortable with him or her.  Additional requirements may include exceptional communication skills, financial management capabilities and organizational and time management skills.

Ideally, your business manager should be an honest, trustworthy person who combines a business/financial background with a love and knowledge of sports.  It is also important for such a person to have a good business sense, the ability to communicate clearly and to be taken seriously by others, especially in discussions about important issues.

Action Steps – Exercise 3 (5 minutes)

Discuss with the athletes whether they have a business manager and how that works for them. Do they believe that a business manager is a necessity to a professional athlete and why/why not?

A good attorney can protect you in a number of ways

From managing, minimizing and responding to risk that may affect you, to reviewing contracts and providing you with legal representation, your attorney will assist you in many different ways.

Contract Reviewing – your attorney will be present in negotiations and review your contracts, either sporting or commercial ones, and check whether they are correct and most importantly, whether they serve your best interest. Also, your attorney will help you understand what is being agreed upon and what is expected to be done by all parties involved.

Intellectual Property Protection – Your image is one of the main assets that you may take advantage of and capitalize on. Your attorney will handle for you all required Trademark, Copyright and NIL Registrations.  In addition, an attorney may guard you and help you protect against any infringement and unauthorized use of your name, image and likeness.

Asset Protection – You always need to protect your wealth and assets against any claim that may arise from creditors or lawsuits. By setting up trusts, wills and other legal tools, your attorney can assist you at creating your asset protection strategy and will provide you with the required protection against any action that may harm your wealth and assets.

Media Representation – Being an athlete, means that you will attract the spotlight. Your public figure and perception are things that you should always be very careful with, since they can affect both your career and income potential. Especially in the event that you gain publicity due to a lawsuit against you or a controversy, your attorney can act as your media representative and provide you with positive media representation.

Charity – When deciding to set up a charitable or non – profit organization you may have your attorney handle all the legal matters for its setup and subsequent management.

Barrier against friends’ and family’s requests – Your attorney can also become the buffer between you, and your friends and family. When a friend or family member come to you asking for a loan, or to invest in their “great business opportunity”, your attorney can play the role of the person who will say no, if whatever they are proposing is not to your best interest.

Finding the right mentor

Mentoring has been around since the time of Ancient Greece.  It comes in the form of an informal relationship at work, school and within the family. Mentoring is the provision of guidance and counsel to an individual by a more experienced, wiser and usually older person.

Successful people around the world, be they athletes, entrepreneurs or artists have had mentors who helped them unleash their potential. At any point of your career, mentors can prove vital. They can guide you towards taking the right direction in your career, assist you to have a head start towards the right direction, and help you discover the proper way to enjoy this journey.

Mentoring is not a one-size-fits all endeavor. Having a mentor is not only about the advice you receive or the lessons you learn from them, but it is also about what you are willing to share with your tutor. Honesty is an important parameter in creating a healthy mentor-athlete relationship if you really want to grow and improve yourself. Remember that it’s a win-win situation. A good mentor will help you by listening and sharing their knowledge and experience. At the same time, you will build the backbone of your success while realizing that you can achieve your wildest dreams, and perhaps financial victory as well. Long-term mentoring relationships develop through demonstrating such attributes as authenticity, empathy, collaboration and companionship.

As an athlete, you might believe that having a professional athlete as your mentor may be a really good option. This is not always the case, unless you are planning to play sports for the rest of your life. If you really want to focus on succeeding financially in your life, you must pick a mentor who will be able to offer you the advice you really need. Mentors are caring individuals who along with family and friends, provide you with support, counsel, friendship, reinforcement and a constructive example.

It’s not that easy to choose a mentor who can meaningfully contribute towards taking your career to the next level. Let’s find out how an athlete can wisely choose a mentor, so that the mentorship is meaningful and allows the athlete to maximize what they have gained through it.

Are you dreaming of starting your own business? If yes, then find an entrepreneur who has successfully managed to build a business from scratch. There are hundreds of people out there who can share their successful life stories with you and help you achieve your dreams. Just make sure your mentor’s professional experience is somehow related to what you expect to achieve businesswise. Below, we list a few characteristics of a successful mentor:

1. HAS EXPERIENCE – Your mentor should have the relevant experience so that they can act wisely towards your benefit.
2. HAS VISION & VALUES – Find a mentor whose values align with your values and who shares the same vision of achievement as you.
3. SUPPORTS YOU – Your mentor should celebrate with your successes and pick you up in your failures.
4. CHALLENGES YOU – Choose a mentor who challenges you and always pushes you to become better.
5. PROVIDES FEEDBACK – Pick a mentor who will help you understand exactly why something went wrong by providing useful feedback.
6. RESPECTS YOU – The right mentor sees you as their equal, does not look down on you and does not underestimate neither you nor your capabilities.
7. IS A GOOD LISTENER – You want a mentor who is not only willing to follow their own beliefs, but mostly listen to yours.
8. IS TRUSTWORTHΥ – If you cannot trust and rely on your mentor, then you will not be able to learn from them.
9. IS ALWAYS AVAILABLE – Find a mentor who is always available to provide you with the advice and assistance you need. Your mentor should maintain a steady presence in your life.
10. FOCUSES ON YOU – Your mentor focuses on your needs and tries to improve your prospects.
11. ACCOMODATES YOU – You want a mentor who does not impose their opinions and beliefs on you and does not try to transform you into something you are not.

The motivational speaker, consultant, author and lecturer, Bob Proctor, who has transformed millions of people’s lives with his work, claims that: “A mentor is someone who sees more talent and ability within you, than you see in yourself, and helps bring it out of you.”

Always remember that having a mentor is not far from looking at yourself in a mirror. Make sure that you look for a person who reflects your professional style, your personal goals, and your overall vision.

Action Steps – Exercise 4 (5 minutes)

Ask the athletes whether they have a mentor and if yes, ask them if they find it helpful.   Ask the ones who don’t have a mentor whether they would like to have one and why/why not.  Continue with an open discussion.

Protecting the sports professional from financial advisor improprieties and fraud

It is fair to say that money draws criminals like honey draws flies!  And, in professional sports, there is a lot of money flowing around, which makes it extremely attractive and lucrative for potential financial fraudsters.  Professional athletes have traditionally been targeted by fraudsters and a considerable percentage of them end up as victims of investment fraud or financial scams.  The global sports business and professional players’ salaries are increasing in value each year and so do financial fraudsters.  The revenues of professional athletes nowadays are growing fast due to substantial sponsorship/endorsement deals, and a lot of financial predators out there want a piece of the action.

The steps outlined below, which are simple and easy to follow, can help professional athletes protect themselves from being victimized by financial mismanagement and investment fraud.

1. First and foremost, it is imperative that you do not hand over control of your finances to anyone! And when we say anyone, we mean anyone and that includes parents, siblings, friends, agents, etc.  Financial advisors should not be relatives or close friends.  Personal relationships cloud money matters and may lead to feelings of entitlement to the money involved.
2. You should devote some time and do your homework on the recommended investments.  You should be in a position to evaluate the basics of an investment opportunity starting with whether such an investment and its expected return make sense. No matter how busy and preoccupied you are with training, travelling or competing, this is about your future financial well-being.
3. You should invest in teams of advisors who are backed up by well-established firms, since these types of firms impose and enforce strict and continuing compliance standards and ethics training upon their employee advisors.
4. Even when the financial advisor comes from a reputable firm, you should still do some checking on the individual advisor. A basic check on the financial advisor can be done by contacting the Regulatory Authority which granted the advisor the relevant financial services license to see if there are any grievances or complains against them.
5. You should always seek referrals for prospective financial advisors, especially from people who have been working with them for a number of years because it may take a few years for the consequences of financial mismanagement and/or fraud to surface.
6. Many financial planners, investment bankers and other financial professionals often work on commission. That means they only get paid if the athlete invests in what they recommend, and they may not always give the best advice or have the athlete’s best interest in mind.
7. Your financial advisor should be willing to spend the necessary time to educate you on the basics of whatever investment they propose and answer questions on how the athlete’s money is invested, what is the expected return on the investment and what is the worst-case scenario if the particular investment goes sour.
8. You can build a protection firewall by requesting frequent and regular updates on your financial position and the status of your investments. If, for example, an athlete requires bimonthly meetings with their team of advisors where the financial advisor presents to the whole team the current financial position of the athlete vis-à-vis the previous one and reports on the happenings between the current and the previous period, it leaves very little room, if any, for financial fraud to take place.
9. And finally, you should have your guard on with retired sports players who have been recruited by investment advisors to act as liaisons in getting players to participate in investment schemes initiated or favored by the investment advisor they work with. The perpetrators of financial scams may employ and use retired athletes as bait to lure active players into investing in such schemes.

You should always remember that your advisors just serve the purpose of informing you about all your available options but the financial decisions are ultimately your own.  You need to be aware that promises of extremely high investment returns may be a warning sign of a financial scam.  There is no such thing as a “free lunch” and this is something to always remember!

Action Steps – Exercise 5 (10 minutes)

Present the athletes with the following statement: “Athletes should always have their guard on when they interview prospective financial advisors.  Ask athletes to list a few things that they would view as ‘red flags’ in someone they are considering to hire as your financial advisor”. Look for 4 to 5 responses and continue with an open discussion.

An international solo-sport career demands advisors with international expertise

Being a professional athlete is not the same as having a typical job like everyone else. Agents from all over the world may express their interest towards representing you. For solo-sport-athletes, the odds of relocating even at a young age are extremely high if the local infrastructure is insufficient or subpar. Therefore, athletes must be able to adjust to new ways of life and new cultures.  Advisors with a great international network and exposure will be able to help athletes settle in new environments, whilst facilitating their adjustment in their new country of residence.

While we tend to associate relocation with team sports due to the institutionalized transfer system, that does not necessarily imply that athletes of individual sports are less likely to relocate. In fact, it could be argued that in some cases the chances are even higher for solo-sport athletes. It could be the case –particularly with smaller countries—that your local facilities and infrastructure are inadequate for realizing your potential. For example, a promising teenager from Cyprus might eventually move to France to train as a tennis player; as it happened with Marcos Baghdatis (reached Number 8 of World ATP rankings in 2006). This is also the case with a lot of sports in the US and student-athletes who come from abroad.

Moreover, we have already established that travelling is part and parcel of a career in individual sports. Now let’s assume that most golf tournaments take place in the US (which might be the case), even if you are a fully grown and developed player you might still want to relocate to the US in order to minimize the need to travel. The reasons are numerous for us to list here. When the right opportunity arises and you find yourself in a new country, there are many things that you need to deal with and take care of in order to keep your mind focused in the field and having nothing else to worry about.  Your agent and other advisors in your home country should be able to reach out to local experts through their international networks so that you have at least legal and tax guidance when you first relocate.

Every country has different rules and regulations that you need to comply with. Even though it is not an athlete’s task to worry about compliance matters, you need to make sure that you comply with local laws, because at the end of the day it is you who bears the ultimate responsibility.  With complex taxation laws and double tax treaty provisions it is difficult to cope by yourself.  You need to have a competent tax advisor in your new country of tax residence who will guide you through all these taxation minefields and protect you accordingly.  Moreover, the tax advisor needs to have an understanding of the tax laws in your home country and coordinate with your home country CPA to make sure that you are tax compliant in both countries.  With most countries taxing their residents on their worldwide income these days, and the US is one of them, you may have to file tax returns and pay tax in both countries simultaneously.

In addition, the laws of each country are different and they are usually in line with the culture of the country.  You need to have a basic understanding of what is both socially and legally acceptable so that you are legally compliant at all times; a good local attorney will be able to offer you support in this area and help you avoid unpleasant situations.

Action Steps – Exercise 6 (15 minutes)

Let’s now check what you took away from today’s lesson before we conclude. Please take the following mini quiz. Be prepared to explain and discuss your answers:

1. Whose advice would you follow?
   1. Advisor A supports that he found a very lucrative investment opportunity about a recycling factory in which you should invest $200,000 and within two years it will yield a return of $800,000. You would be one of the first investors, which explains the high yield.
   2. Advisor B supports that there is a great opportunity to invest in a financial technology company which will soon hit the market. He suggests you invest between $50,000-$100,000. You can expect to make a considerable profit but probably it will take more than two years for the company to turn out a profit.

Answer: Definitely not A: Noble cause BUT unrealistic promises (200k to 800k). Also, the fact that you will be among the first investors is not necessarily a good sign. B sounds more reasonable but you should still ask for more information. B also recommends investing lower amounts. You should ALSO remember that these guys work on commission.

2. You are at the first stages of your career and you are trying to find an agent. Two people approach you. Choose one of the below:

1. 1. Joanna is young and ambitious and not much older than you who concluded her volleyball career a few years ago. She hasn’t had many clients but the few she had, she has guided them through their first steps and got them very good contracts.
   2. George is a hot-shot sports agent who represents some very big names. He wants to sign you and says that once you sign, he will do everything for you and you will not have to worry about a thing. “I will only bother you for signatures” he concludes.

Answer: I would lean more towards Joanna (a). 1) she’s, closer to your age therefore she knows your struggles and you can also hit it off 2) Guided people at your level which is important 3) Although George is much more experienced and successful, the fact that he has more high-profile clients means less attention to you 4) You want to be included in the decision-making, you don’t need someone who “only bother you for signatures”

3. Two people approach you and ask you to invest in their business ventures. Choose:

1. 1.  Person A is your cousin! He wants $50,000 for his online clothing delivery platform.
   2. Person B was introduced to you by one of your advisers who wants $50,000 for his food delivery platform.

Answer: This is a trick question. None of the two! You don’t have enough information. Sure, one is a family member but that’s a lot of money they are asking. You shouldn’t just give it to them because they are family. Person B was introduced by your adviser, thus probably much more trustworthy. But again, there is insufficient information to decide at this point. You should first look at business plans and numbers yourself before deciding where and if to invest in either of the two options.

4. Choose your lawyer:

1. 1. Sports Lawyer X is one of the best litigators out there. He has represented his clients in courts and has never lost a case be that, game suspensions or tax-evasion cases.
   2. Sports Lawyer Y’s litigation skills are not his best suit. However, he has good PR skills and is pretty good when it comes to trademarks and NIL protection.

Answer: Go with Y (b). The first one is best litigator but since you are an athlete you need much more from your lawyer. Remember: contract reviewing, asset protection, image rights, media representation. The fact that Lawyer Y has good PR skills and is decent with trademarks and NIL, are both good points for choosing him over X. You should prefer a well-rounded lawyer over someone who excels in just one of the things you need.

5. Choose your business mentor:

1. 1. Charlene was a professional tennis player who was considered one of the best in the country. During her career she started 2 businesses but they both failed in the end. After retiring she decided to become a business mentor to solo-sport athletes. She has approached you to work with you and you instantly hit it off!
   2. John was an amateur cricket player and has worked as a business consultant for over 15 years. He has worked with a few athletes in the past but he has mostly worked with non-sport persons. He has approached you to become your business mentor

Answer: Go with b. because you need someone who knows what they are doing. Charlene, although a former athlete, has failed in her business endeavors twice. John on the other hand, seems to be a seasoned business consultant and the fact that he has worked with both athletes and non-athletes is surely a good thing.

Lesson wrap-up

Today we have covered the different types of advisors and mentors that we consider important to your current and future success, throughout your sports and post-sports career.  The main message from today’s lesson is that you always have to use your critical thinking and judgment when it comes to choosing the people who will support and advise you.  If there is one thing that you should take away from this lesson, it is the importance of having adequate financial knowledge and making the right choices when it comes to selecting your winning team of advisors.

At this point, we will wrap-up today’s lesson.  First, we will go over the learning objectives of this lesson and we want your feedback as to whether they have been achieved, and then we will address any questions you may have.  Please feel free to ask anything you’d like in relation to today’s lecture and we would love to hear how the concepts we discussed today relate to you and your greater life plan.