Why Financial Planning is Important for Professional Athletes

Professional athletes often earn a high income, but their careers are typically short-lived. This means that they need to carefully plan for their financial future so that they can have a secure retirement and provide for their families.

Here are some of the key reasons why financial planning is important for professional athletes:

Short career spans. The average professional sports career lasts only about 3.5 years. This means that athletes need to make the most of their earnings during their playing years in order to have a comfortable financial future.
High earning potential. Professional athletes can earn a lot of money, but they also have a lot of expenses. This can make it difficult to save for retirement and other long-term goals.
Risk of injury. Athletes are at risk of injury, which can end their careers prematurely. This can make it even more important for athletes to plan for their financial future.
Taxes. Professional athletes often have to pay a lot of taxes on their earnings. This can eat into their savings and make it more difficult to reach their financial goals.
There are a number of things that professional athletes can do to plan for their financial future. These include:

Creating a budget. This will help athletes track their income and expenses so that they can see where their money is going.
Saving for retirement. Athletes should start saving for retirement as early as possible. They can do this by contributing to a 401(k) plan or an IRA.
Investing wisely. Athletes should invest their money wisely so that it can grow over time. They should work with a financial advisor to create an investment strategy that meets their individual needs and goals.
Protecting their assets. Athletes should take steps to protect their assets from lawsuits and other financial risks. This may include buying insurance and setting up trusts.
By taking the time to plan for their financial future, professional athletes can ensure that they have a secure retirement and provide for their families.

Here are some additional tips for professional athletes who are looking to improve their financial planning:

Get professional help. A financial advisor can help athletes create a financial plan that meets their specific needs and goals.
Stay informed. Athletes should stay up-to-date on financial news and trends so that they can make informed decisions about their money.
Be patient. Financial planning takes time and effort. Athletes should be patient and persistent in their efforts to reach their financial goals.
By following these tips, professional athletes can improve their financial future and secure their financial security for years to come.

If you're looking for a trusted source to help you stay on top of the ever-changing financial world of investing, retirement and estate planning, and asset protection, whether it's for you and your family or your small business, you're in the right place. This is the 1715 Treasure Coast Financial Wellness Podcast, where we'll keep you up to speed with the latest market news and conditions every week. Now here's your host, Thomas Davies. Welcome to our segment in which we speak with two individuals, World Advisor Thomas Davies and NHL Hockey Hall of Famer Dennis Puddin.

Mr. Davies helped many people, especially families, secure their financial future. Mr. Puddin spent his 15 NHL years with the New York Islanders helping them win four Stanley Cups.

We will have two great interviews, so enjoy the show. When did you start your career and when did you begin working with athletes? Yeah, so great question. Really kind of started my career back in 1996.

I was working for the PGA Tour prior to that and really just started looking around to what I wanted to do when I was 25 years old. There was an opportunity in Delray Beach, Florida to work for Merrill Lynch, so I went to work not knowing anything about the stock market, being green to everything. It was a great learning experience and I was there for quite a few years and kind of worked from the bottom up. I started in cashiering and trades and order and compliance and all the back office fun things that nobody ever hears about.

In 2006, I got my license and started working in the industry as an advisor in 2007. As far as athletes, I've played sports all my life, mentioned work for the PGA Tour, so it was just kind of a natural fit to work with athletes, having that camaraderie. There's something to be said about a locker room camaraderie and I was always part of that as a kid and all through high school and then into college. You have a bond with other athletes.

If you played sports, it's kind of hard to explain, but it's a natural bond that you have with athletes and you kind of understand each other. It just seemed like it was a great fit as I started my career and started branching out and it just made sense because I understand what athletes kind of go through, the mentality and really just kind of look into their financial lives now as an advisor and understand what they're going through, what it took to get there to that elite level and what it takes to stay there. Athletes are just normal people like you and I, but they have a different job. When you get to the top levels, it's such an elite status to get there.

Out of all the thousands of kids out there that play sports every day and look to Denny Potvin and these greats and say, I want to be like them, it really takes a lot of work and dedication. I think you have to have a good understanding of that to sit with an athlete and have a good conversation. What made you focus on working with current and retired athletes? Another great question.

As I mentioned, having the ability to kind of communicate on that level with athletes and understanding their needs, their wants, their goals, what they're going through while they're in their playing careers and really understanding how sports evolve and the things that they have to go through gave me a great understanding. Then retirement, athletes when they retire, it's really such a different atmosphere. I know Dennis is going to talk about this, is just you trained, you played a sport all your life and now you get thrown, it could be when you're 28, 29, playing careers sometimes aren't that long. Dennis had a great playing career, as you mentioned, for 15 years.

Some playing careers only last two or three years, what are you going to do for the rest of your life because you started playing the sport at three and four years old and you've played it all your life and so now you're thrust into society. Once again, having that understanding of where they come from and how to focus on retirement and say, okay, for the next 40, 50 years, what is it that you're going to do with your life? You've made a ton of money in your lifetime, once again, maybe two years, maybe 10 years and understanding how to make that money last in retirement while you're focusing on new goals and it's difficult, once again, because you've been on the battlefield, you've been out there and now the mindset is, okay, this is a new battlefield, whether you go into business for yourself, maybe you work for somebody and it's just a difficult process. Focusing with athletes, knowing their mindset and having that open communication, I think is really a big positive to work with athletes.

What advice would you give to an athlete just starting out and one who is about to retire? When you're just starting your career, when you're 17, 18 years old, you really know nothing. You think you know everything, like most teenagers, but you really know nothing. What we do is we sit with the families and we provide a plan for them and it's a plan that they can stick to and it's a process and it really just outlines a guideline for them to be successful throughout their playing career to not only try not to be wasteful with their money.

A lot of these, especially in hockey, a lot of these families generally are blue-collar families so they don't come from a lot of money, so they don't have a great understanding of it. We really just try to put a blueprint down for them to follow and to have them be successful not just on the field or on the ice, but also financially to go through their career and be set up for a great retirement. What has been the response? It's great.

Like I said, working with the families that are just starting out versus retirement, they love having a plan, being able to follow goals, and really just being able to navigate what's going on in today's markets and going forth and then going back to what would I say to someone in retirement that's just getting ready to retire, while it's really working with them a year or two years prior to them retiring and setting up those goals and making sure that that blueprint had been followed or some kind of plan was followed, and setting them up for success in retirement. A lot of athletes go into opening their own business. There's a lot of entrepreneurs. We hear about it all the time, and unfortunately, a lot of them want to open restaurants, and restaurants seem to be the thing.

It's just such a hard business to be successful, so I always advise not a restaurant if you just don't have the background in it. It's really setting them up for a successful retirement, making sure that they've saved and they have prepared their finances for retirement, because retirement now is 34 years, but not only retirement from that first profession, but sometimes they get retirement from their second profession. Dennis had a great career working for the Florida Panthers as a broadcaster, and that was his second career, and it lasted him 30 years. It's really just working with the individual and talking about goals and plans, and when I talk about retirement, generally, it's a moving target.

We can set all the plans we want, but life happens, so you have to be able to adjust your plans as life happens, and so that's really where I think an advisor comes in and can help an individual navigate as that retirement goal moves around. Dennis, it's a pleasure to meet you. Congrats on all the success in your career. Thank you.

It's good to be here. Since you have officially retired from two NHL careers, one as an All-App Fame player and one as a broadcaster, where do you find yourself spending your time now? Probably dreaming about being 25 years old again and still playing in the NHL. For me, it's very simple.

I'll probably never do anything as well as play hockey, but it was a privilege and an honor to have had so many years in the NHL. I must say right now, I am totally retired. As I mentioned, I had two careers, playing the game and then broadcasting the game. It was a lot of fun.

Both of them were just appropriate, age-appropriate, so I just retired a couple of years ago, and now I'm really kind of just laying back. I've got some business interests that are developing all the time. I started a small company, a manufacturing company for pot and socks, so I'm staying very busy. Having been in the financial advisory business after your playing career, how important is it to work with well-advisors like Thomas Davids?

I did work several years once I got out of the NHL and my playing career. I ended up starting in New York City with Donaldson, Lufkin, and Jenrett, and then moved on to First Capital Advisors. In 1993, I moved down to Florida to do a little bit of both broadcasting and still work in the services with Raymond James and Associates. So obviously, a lot of my clients were people who had been athletes or who were current athletes.

It was very interesting how they wanted to gamble. They wanted to get a stock and make a lot of money on the stock. They weren't thinking about 20 years down the road, so I learned myself as I went along that the thinking was not right, particularly for a mid-20s or mid-30s athlete who's got 50, 60 years to live, he's not thinking about the long term as much. So it was a bit of a process doing that.

Eventually, the broadcasting took over. I went from doing 38 games on television to 80 games on television. So I had to leave the wealth advisory business aside and then entrust other people, like I have with Tom Davis. Tom has been a fiduciary.

He puts his clients' interests first. How important is that now when a lot of athletes today are directed where to go by their agents? You know, the agent business is one that has grown quite a bit. It used to be you would have an agent, you would negotiate a contract, and then afterwards you're on your own basically investing your money or protecting the money.

Protecting was never a word that was used by young athletes. They wanted to spend their money. I think what happens right now is, you know, with what Tom Davis and others do with athletes is they package a plan, like I heard Tom say that many times. That plan has to be packaged so that the player can have an understanding of what maybe your current budget should be, given that you're making a lot of money, and then what it's going to look like 10 years after you retire.

Sadly, and Tom of course being in that business can tell you, a lot of athletes who have made a lot of money, we're talking millions, within 10 years after their retirement, they've lost it all. So there's a need for help. NFL Hall of Famer Joe Montana mentioned in an interview that he found investing in the market sometimes gives him that feeling of winning on the field. Can you relate to that?

Yes, I can. Not as often as I would like to, but I do have a couple of stocks and I will pass it on as a matter of fact to Tom Davis. He'll buy them for me and then we start monitoring them. I have other areas where I also invest, but I really try and keep it to where I'm told you're supposed to be.

First you've got to understand what you're investing in. You've got to know what the company does. It's not just a question of, well, I'm going to invest in Yahoo, the stock. Well, you've got to know everything about what Yahoo does, and I think that's where I have become a lot more involved and I find that fulfilling, but I don't agree.

I don't put it on the same level as winning a Stanley Cup. If you could go back to your last year as a player and give yourself financial advice, what would it be? That's an excellent question because by then it might be a little too late to start thinking about the future, but I think the thing that I noticed so much was even in the 80s, I retired in 1988, well, we were making much more than $100,000 a year in the 80s. That was a good salary, but within 12 months, trying to find another job outside of hockey or even inside of hockey that would pay me $100,000, they're not there.

I could have been a coach, assistant coach, it could have been a lot of things, none of it came close to being able to make that kind of money. If you haven't saved or prepared for the afterlife of professional hockey, you're going to run into some real difficult times. What I had done, which I thought was still today, it was pretty good, was the fact that I deferred a lot of money from my latest contract, from my last contract, and I got a nice 9.5% return on it. At least from 1988 to about 1995, I had a comfort zone so that I could find where I was going to go later in life.

Thank God I did that because I had three children, I had a mortgage, all those payments don't go away, but the income wasn't quite the same. That cushion was what I thought to be and has proven to be a very smart move. Well, that was a smart move, right? It was.

Yeah, it was. It saved me. It kept my children in private school, kept my wife with a Mercedes, and kept my wife with a fur coat. All of these things you have to have, correct?

I say it was a huge success, and then by 1995, I was down in Florida, working full-time with Raymond James and broadcasting two of the things I love the most. As we prepare to close, we extend our heartfelt thanks to both men. Their experience and knowledge in the field has been inspirational. From Cold Springs, Florida, this is Claudia Guestro, thank you for watching.

Thank you for listening to the 1715 Treasure Coast Financial Wellness Podcast. If you enjoyed this episode, share it with a friend who might like it, and please rate, comment, and subscribe. If you'd like to contact us, find more information, or if you'd like to keep up with us on Facebook, Instagram, Twitter, or LinkedIn, check out our website at www.tdwealth.net. Have a great day, and we'll talk to you next week.