Latest / Better Together / Making Athlete Wealth Last for Generations - Zac O'Brien
Transcript
- Shawn Sundsvold: Welcome back to the Better Together Podcast. I am Sean Sunsveld along with my co-host Kelly Sunsvold. And today's guest played four years of college football before spending a decade in tran traditional financial planning. And then one day an ESPN 30 for 30 about athletes going broke stuck with him and it wouldn't let it go. So Zach O'Brien took that idea to his business partner, built an athlete-focused division from scratch, and fought through what he calls one of the toughest approval processes he's ever been through. To get the NFL Players Association blessing to work with pro athletes. Now, as the managing director of Crown Wealth Group's athlete division, Zach calls himself the quarterback of an athlete's entire financial life. And now he helps athletes who just signed nine figure contracts figure out how to make general generational money actually last. So z well Zach O'Brien, welcome to the show. Zac O'Brien: Thanks having me, I appreciate it. Shawn Sundsvold: Yeah, I you know, I loved our initial conversation and we're both sports guys and so it it, you know, made it really fun to kinda understand what some of that life looks like. But for our our listeners who may have no clue what that side of the world looks like, whether it's financial planning or working with athletes, help us understand kinda who you are. You know, you played college football for Lenor Leonard Ryan, I believe is how you pronounce it, right? Lenore Ryan, yep. Zac O'Brien: I gotta I gotta Shawn Sundsvold: Awesome. Zac O'Brien: go to school there and double major in finance and accounting. I knew from a very young age, around third grade what I wanted to do for a living, which is very odd, very unique. my uncle, Scott Vogue, is a financial planner in Chicago. I've kind of emulated my career, my the start of my career and a lot of things because of what he did, who he is as a person, what he was able to do as a family man. And just something that always interested me. I loved numbers, I love people and I wanted to help people and so it all kind of came together. Kelly: That's great. I love the the sports world, especially college athletes. you know, and and something too that you do and you brought up is something personally like I wasn't aware of. but I've seen it. We've all seen the the athletes that have been very successful and then they've lost it all. and so really for you, this idea of an athletic division came from watching an ESPN 30 for 30 on athletes who were going broke. So, what was it about? that story that really struck you enough to actually build a business around it. Zac O'Brien: It's just it's one of those things we In our firm at Crown Wealth Group, we act as a personal CFO for our clients. And so we handle all things financial, making sure that all the pieces line up, the professionals are all talking together. And I think one of the biggest problems with athletes, unfortunately, is just the lack of knowledge. They they haven't had money. And most people have never seen that kind of money. I know that if I would have been 22 years old and signed a $10 million contract, my life would be very different. The things, the decisions I would have made probably wouldn't have been the smallest. Smartest things. and so unfortunately for the majority of them, they come into a life, they think it's more money, and it is, it's more money than they know what to do with. Unfortunately, you know, Uncle Sam picks their pocket pretty heavy. They they spend money on things and Buy things they they outspend what they are going to make because again their careers typically are not that long. even a very seasoned NFL athlete that's been in the league for ten years, that's an anomaly. I mean the average NFL career right now is three years. So you're making more money in three years than most people make in a lifetime, but you also are giving more to the government than most people in one year than most people will give in a lifetime. And so it's not the same, you don't end up with the the number that you sign is not. the number that you end up with in your pocket. You don't get to feel that money in your pocket. And so I I just wanted to be a resource for people. I love the athletes. I love the determination. Grit's a really important part of who I am and one of our family values and I just want that for our athletes. I think it's an important thing for somebody to be to be in their corner and help them. Shawn Sundsvold: Yeah, for for your clients, you know, because they are a all athletes, tax planning, and you just kinda talked about it there is probably one of the biggest challenges they will have to deal with. you know, what's a tax mistake you see some of these high earning athletes make over and over again that maybe a little planning could have fixed? Zac O'Brien: Just not preparing for it. at the end of the day We we see how their the income's coming in, depending on if they're college athletes or if they're professional athletes. How the income comes in from a professional athlete is a little bit different than the college guys. but just for example, a college guy signs a million dollar contract, he's gonna receive all of that money as 1099 income. So there will be zero taxation taken out of it, and that million dollars, what we tend to do at the beginning is push 40% off to the side. We know that that's a little high. You're probably not gonna pay all 40%. That's the highest effective tax rate, but it gives us that cushion to be able to protect them when the time comes, when things come up, that the money's there, we set it to the side, kind of sit it and forget it. And we found that that's probably the easiest thing to do for clients: find a high yield savings account, whether that's synchrony Amex. I just heard about one this morning that was paying six percent on your cash. that's not guaranteed Shawn Sundsvold: Yes. Zac O'Brien: to last long, but you know, it it there are different options out there and just allowing your money to sit there, park, work a little bit for you, and earn something while you're waiting to pay Uncle Sam next year. Kelly: Such a good idea. yeah, those just a little bit rather than just hiding it under a mattress essentially in some savings account definitely makes sense. something you've done too, you had a business coach you know, for a while and your original firm that you were working with couldn't support the athletic division idea. So you kinda put it up on the shelf and then it kind of looped back with your business coach. What made you bring it back up? instead of just letting it go. Zac O'Brien: So I really loved the idea coming out of school. I wanted to help athletes, but you there's a lot of hurdles to jump through, a lot of things. The firm I was with it just like you said, it didn't support that. I was having and am having the best couple of years of my entire career and he said if you could change anything, what would it be? And he made me sit in silence for five minutes probably and come up with an answer and it just kinda clicked to me. I've always wanted to work with athletes and it just kinda came back out of the blue and so from that moment on I I built out our portfolio or our our plan deck to how we would Attack our clients and make sure that they're in the right position, building out the entire platform for them and presented it to my business partner. Shawn Sundsvold: Yeah. What w when you brought it to him and you presented it, what how did that conversation go and what were what was your you know, your business partner's thoughts on it? Zac O'Brien: so my business partner in all honesty is my best friend also. So it's a little easier from that perspective. I brought it to him and he goes, Well, I'm glad you want to do this because it's not something I really want to do. It's not an area that I and am excited about. there's a lot of hand holding, a lot more random evening phone calls and and at the end of the day a lot of times they're making decisions a lot quicker than They probably should, but things come up and we want to be there to address those things and and be part of the proactive planning versus the reactive planning. Shawn Sundsvold: Yeah. This this Kelly: Yeah, for sure. Shawn Sundsvold: y this kinda took off I think it was about eighteen months ago, you told me, right? Zac O'Brien: Yep. Shawn Sundsvold: So what did that first year actually look like and you know, is has it been hard to kind of break into it and maybe harder than most people would expect? Zac O'Brien: I I pretty much knew it was gonna be a very hard world to break into. it's a It's a small locker room. I mean, when you go and talk with NFL athletes or you talk with NBA athletes, the locker rooms aren't that big. I mean, NFL teams are carrying fifty-three man rosters. You have some practice players with another twenty or so players, and there's thirty-two teams. So when you all roll it up together, I mean there's not a lot of at-bats that you can even get. a lot of people have worked with an advisor for some time, or they worked with somebody from their family that they are their family members already knew, or their Agent trusted somebody and that's how they got in the door. And so that's been a big part of our process is is getting in front of the agents, making sure that they understand that our process is different than a lot of other advisors. We want to be c be again the quarterback that's working with these attorneys, with the CPAs, with just all of the pieces making sure that Our clients are are getting the best advice and it's not just siloed, it's really a overall approach for everybody. Kelly: Yeah, so looking at the approval process for the NF, let me get this right, NFL P A. what does that stand for? Zac O'Brien: Yes. The National Football League Players Association. Kelly: There you go, there you go. All right. So you've decided you've described that process as one of the most invasive things that you've ever gone through. What did the practice let's say, what did the process actually involve and why do you think that it was that hard? Zac O'Brien: So again, I think the the thirty for thirty that came out a few well, probably almost a decade ago now, but The NFL was under a lot of scrutiny. There were advisors coming in that didn't know what they were doing, didn't have the right credentials, hadn't been in the career long enough, and were just making bad advice for these athletes. And that they were part of the reason that so many of them were going broke. And so the NFL and the players association came together and said, We're gonna build a very robust interview process and make sure that we don't have people making decisions for these players that are are doing the wrong things. And so the the interview process, the application itself, the background checks, the reference checks, the insurance that we have to carry, all of these things, it was just I thought it would be probably a day, day and a half process. it took me almost a week to go through the whole process and it's just it was Legitimately, the most difficult thing I've ever had to like put together for a designation or for a license. so Shawn Sundsvold: Yeah, the I I can imagine just, you know, you're dealing with such high highly visible people, right? And they you know, and they obviously want to protect their you know, their people and and what they're doing Zac O'Brien: Their product. Shawn Sundsvold: with them. Yeah, their product. That's a good way to put it. Zac O'Brien: Yeah. Shawn Sundsvold: kind of th thinking about, you know, what you're doing and and helping do the financial education side for some for these athletes, why is financial education so important for everyone? Zac O'Brien: Well so me and my business partner both grew up our moms were both teachers. and so the education side of things is a really important part for us. Understanding we want our clients to trust us but not follow us blindly. We want to make sure that they're understanding what we're doing, that they're a part of the process and It's not just, hey, take my advice, I've done this a long time. It's here's why we're doing this and this is why we think it's the best for you and we want to to collaborate with our clients and make sure that we're all working in the same direction. So I think a lot of the times the athletes have the right intention. they they know they don't wanna go broke. They wanna make sure that are making smart decisions, long term decisions, that this money's going to be a short term scenario and we're gonna have to transition them to their second chapter. for a lot of people you know, especially athletes, this has been their entire life. for, you know, let use an example of a doctor, right? a doctor, young child, you know, third or fourth grader understands, Hey, I wanna be a doctor and so that's their their dream. They go to school for that. They go to med school and they go and through a residency and then they become doctors and then they get to do that career for twenty or thirty or forty years even. before they move to the next chapter of retirement. Whereas athletes, that it's been their dream since they were six or seven years old. That's all they focused on. That's all they've done. I mean, most of them obviously have to go through the school process, but that is their dream, that's their focus. And once they get done with that career, they have to find a new focus. And for a lot of them it's a really hard thing to do to transition, because again, they're in their mid twenties, early thirties, and having to make that transition for themselves and their family, start another career and kind of start over and identify themselves completely different than what they grew up thinking of themselves as. Shawn Sundsvold: Yeah. know. What does that conversation look like with an athl you know, with an athlete when that happens? Like how are you walking them through that? What is that first conversation? Zac O'Brien: Well, first off it's congratulations. you're part of the the smallest percentile in the world that are making money like this in such a short time frame. So congratulations. We're at this point again, if a client is signing, you know, the five or six year contract for that sixty to eighty million dollar deal, they had something to start with, right? They they've been in the league for two or three years or four years. this is the second contract. So they've A lot of times they've already spent some of the money on their first two contracts or first contract and and done some of the things that they wanted to and got some of that out of the way and so now it's hey, how do we focus this and make sure that this money can be here for you and I mean this is generational type wealth and how do we conserve this and make it so that your great great great grandchildren are living off of this also and and able to enjoy the fruits of your labor and the hard work. that you've put into this. So that's probably the biggest thing is just kind of setting the the table for it and again opening up the conversation of what do you want this to look like? How do you want to to be remembered? How do you want to create a legacy through this? Shawn Sundsvold: And and those are the same things really that a a any financial advisor should be asking, right? Zac O'Brien: Absolutely. And and that's the thing is so our athlete division that I've that I run out, those are the majority of my those are my clients, but I also have business owners and high net worth individuals and high income earners as clients. And so, you know, it's it's a very similar story. It's just they're the athletes are a very time compressed income earning scenario. And so it transitions and makes some things a little bit different in the planning process, but overall, the education is still the same. It's how do We build out a plan and make sure that it's something that you can stick with. It's not a plan, a retirement plan that we put on a piece of paper and we look at it once and then put it on a shelf and say, We'll come back to this in 30 years. That's not how this works. We've got to actively be inside of this. Tax laws change, estate laws change, your contract, you get a new contract, or you get traded and you move to a new new town, you're getting married, you need to have a prenup, you are getting divorced, and we need to work through that. that prenup and making sure that assets are settled out in the right way. There's just so many different pieces and nuances that come into all of all of it. And your life is always going to change. The only time that it's not is when you're when you're dead. And so it it's one of those things we just can't sit it and forget it. It has to be an active process of looking at it and reviewing it and making adjustments and making changes and making sure that it's still the right fit for who you are. Kelly: And that relationship with money, you know, goes all the way back to childhood or how their family system dealt with money, whether they had it or they didn't or how they spent it. So one thing I know that's really important to you before you work with a client is really understanding the client's financial DNA. So it goes back to that childhood relationship with money and how it shapes their decisions right now. What's an example of that showing up with an athlete that you've worked with? Zac O'Brien: I I'm working with a young man right now. His father at the age of thirteen was working after school. Four hours a day. So he was working 20 hours a week at the age of 13 to be able to put food on the table for his family. They had no running water in their house. They had dirt floors in the house. And he he understands that, you know, my dad grew up with money in a very different light than I did. And his dad worked very, very hard and had created opportunities for him that were just different. And so he sees money in a different light. He he respects money, but it's not the same even As his dad. His dad has money in a different mindset than he does because they were just brought up differently on money. like you said, their the financial DNA for for even siblings a lot of times is very different. mom and dad are the exact same people, they're three years apart and they see money very differently from their parents, which most of the time the parents probably weren't any different at all. It's just how people receive it and interpret it. And so there's no right or wrong answer. It's just we need to know what that is and how you react and how to build out a process for you that is unique to what makes you click or makes you tick and makes you work through all the pieces. Shawn Sundsvold: Yeah, I I think it's so unique and you're talking about how your kids perceive it. You know, I've got four kids and watching how each of them handles money, you know, it's it's a very, very different process, right? Like I've got one that's like a super saver, I've got one that will work his tail off, I've got another one that's a spender, right? Like they're they're all they're all over the place. You know, how have you seen that conversation kind of show up in your kids? And that financial Zac O'Brien: Right. Shawn Sundsvold: DNA lesson. Zac O'Brien: Yeah, it's a really important part for me. My mom did a great job for us as children of teaching us about money, understanding what money was, how to pay bills. we had bills as young as probably seven or eight. We had a checkbook. I mean it was a fake checkbook, but mom made us pay bills and we we saw how that worked. my kids are kinda going through that now. My my oldest is ten and he loves shoes and loves nice clothes and He likes the things. He's very similar to his dad. and then I've got my younger son who's six and as long as he has a pair of overalls and a John Deere hat on, he doesn't care about anything and saves every dollar he has. And so it's you know, I again I'm teaching them the exact same thing and they just they're just different. I mean all our kids are different. you know that as well as I do, you know, with four of them you've got four different personalities coming at it in a different way and and it's very similar for us. Kelly: Yeah, for sure. And we're talking about mentoring and you know, you're working with college athletes, professional athletes, and you're working on helping them build out next chapter program, like by helping them figure out what's what does life look like after football? So you brought in a personal development coach to help them. What made you realize that money like the money side wasn't enough on its own, that they really needed that development side of them as well? Zac O'Brien: for me personally, my life completely shifted and changed. He helped me develop new thought processes and I go through and I meditate now and I'm a big believer in manifestation of our lives and and thinking happy thoughts and making things happen and my life's never been better. I'm extremely blessed right now. I'm very happy. and I want that for our clients. I want them to understand, hey, life is going to change, you're gonna have ups and downs, and it's just how we face them and handle those. And so what is this next if we have a plan for the next chapter or at least a thought process behind it, it doesn't have to be completely filled out. We don't ha we're not gonna know exactly how it's all gonna lay out, but what's your dream and what's your aspiration for after the game? because it's going to happen. It's not this is not a thirty or forty or fifty year career. It's it just doesn't exist that way. So what is that gonna look like for you? What are your passions? What it what makes you excited outside of you know the sport and maybe they become coaches, right? We can we've seen this before where we've set them up in a opportunity where they can go and take a high school coaching job and they can supplement their income with what they have left over, what we've saved for them and and positioned it so that they're not chasing after the dollar, they're actually chasing after the dream. Shawn Sundsvold: Yeah. The I don't know, something you said there and talking about having something outside of work, right? Like having some passion or thing you're pursuing, why is that so important? Zac O'Brien: Big believer that legacy is a huge part of who we are, building out a legacy and doing things in the community, making a difference, having an impact that's not just your direct family, but having a community impact and and making a difference in people's lives. I think it's a big important part of who we are. I think that's part of what God put us on this planet for was to to help change and and mold and give back not only you know with what we can do, but how we can treat people and and show people how. Yeah. Shawn Sundsvold: Yeah. Kinda taking a step outside of, you know, the athlete side of it, What overlaps do you see in how the athletes have to manage what they do versus how you know, someone with a personal brand like a coach or real estate agent, you know, how do you see them managing some of those things similarly? Zac O'Brien: Again, at the end of the day, income comes in, the IRS takes a big piece of it. How do we structure whether or not that's through your LLC through how we pay out and create a retirement plan for you and set up a 401k or set up a SEP IRA, whatever it may look like, you know, there's still a lot of the same carryover. Is money coming in? How do we avoid giving Uncle Sam as much of it as possible within the laws of what we have, right? At the end of the day, we have to pay taxes. But let's figure out a way to minimum minimize what we have to give to the government and if we can give it back to the community or give it back to employees or staff. And you can use your dollars typically better than what in my opinion the government can. Kelly: Yeah, it's a really fair, really fair statement. I love the idea of really empowering business owners to be able to give back to their communities, give back to their employees. and we've come across several business owners and we're big watchers of like Shark Tank and things like that. So we've heard that there's business owners that don't pay themselves a salary. so this drives you crazy, doesn't it? Tell us Zac O'Brien: Yeah. Kelly: why. It matters so much to you that that business owners are paying themselves. Zac O'Brien: Well, so a couple of things, right? I mean, at the end of the day, nobody really wants to work for free. that's one. Number two, the IRS says you can't. so you have to pay yourself a reasonable wage. a lot of people will look at their business and go, Well, I'm just gonna take it all through my S Corp, pass it over to my business as an a profit for the year so I don't have to pay self employment tax and social security on it. Problem with that is is you you've you've gotta have a reasonable wage so you have to have a salary there obviously in the first year or two of a business sometimes you don't have a salary there's not there's not really a lot there you're you're dumping money back into the business you're trying to make it grow you're you know business owners know this better than anybody our staff is the most important people they get paid before we do so if there's not any money left over the staff is getting that and that's why at the end of the day the business owners make more money sometimes at the end of the the rainbow because they've taken a lot of those risks and they've made sure Everybody's taken care of. it's not for everybody. A lot of people love having the ability and knowing, hey, I'm gonna show up to work on Monday, and on every other Friday, I'm going to get paid, and I don't have to do anything but my job and don't have to worry about those other pieces. Whereas business owners, they're worrying, they don't really ever put it put it away. And it's not an eight to five, it's typically for most of them 24-7, 365. we were just talking before the the podcast got started. You went on a vacation for nine days. days and we're able to to get away from your email and that's you know foreign to most business owners. I mean it's just it's a really it's we most of us want that as a goal when we go on vacation, but the real I the real the reality of it all, sorry. Is that it just doesn't happen, right? We spend a d hour or two in the morning checking emails, trying to make sure that you know no fires have started yet. And then, you know, when we get in for lunch, you check emails for twenty or thirty minutes to mitigate the fires there. And then when you get in from the beach, you check emails again to make sure that you know the fires haven't, you know, rolled over and the world's not on fire. Most of the time it's not, but you know, everybody else thinks that the world's coming and you know. You know as well as I do, you go on vacation that all of a sudden you get more emails in a week than you would in a month while you're sitting at the office. So it's just how it all works. Shawn Sundsvold: It is how it all works. And, you know, just kind of thinking about that scenario, what when a business owner comes to see you for the first time and maybe they want to get started with you, what are some things you're coaching them on and helping them see that maybe they're not seen initially? And they maybe they've had their business for like ten years, you know, five years, ten years, but there's always blind spots. What are you pointing out for them? Zac O'Brien: Well again, a lot of times, you know, small business owners, they started off and they they created something that they were passionate about and they're making forty or fifty, maybe sixty thousand dollars a year and they don't realize how fast that that the business shifts from this, you know off my kitchen table type business to having a true enterprise where they have staff and they have a lot of overhead and they have now the you know the killer of all business owners the health insurance side of things where you know that's a big huge expense for business owners that they a lot of times don't prepare for and and creating benefits through retirement plans and where are areas that we can take advantage of putting some money to the side and and protecting us. and setting us up for the future. Kelly: Yeah. so you know, I was going through your profile before, you know, obviously before this podcast, and little bit of a a hard right turn in this podcast, but I saw that you got your CDFA, which is certified divorce financial analyst. you got that in 2022. So I know we talked earlier in the show here about like how you're, you know, you help people if they're going through a divorce, making sure that are divided out, all that making sure everything's good. what made you pursue that specifically and how often does that expertise actually end up being relevant to your athlete or your client's life? Zac O'Brien: Yeah, so I've actually gone through a divorce. I went through that program though about two, maybe three years before I got divorced. My at the time my mother in law was going through a divorce and I sat down with her and her attorney, and her attorney was making Good decisions for her from a overall perspective, but missed a lot of the small nuances of not every dollar is the same, not all debt is equal for income earners or a high income earner versus the stay at home mom. And you know, assets that you may want to keep and you want to stay in the house, but it may not be worth it to stay in the house. And so unfortunately, a lot of times the attorneys charge a lot of money on an hourly rate, and sometimes they don't have the wherewithal or the knowledge on some of the how of some of the investments work or how they could you know impact both sides of it. It's not just say, hey, let's split this 50-50 in every account, take half of it. It's a lot of times you're taking one piece versus another piece, and again they don't all lay lay out the same way. so it's it's really an important part of that. I I saw the value in that. I use it quite a bit. unfortunately divorces very high statistic in our country and divorces I've seen them where they're super amicable Most of the time it's a drag out where unfortunately the attorneys are the ones that win sometimes. And nobody's winning in that situation. So sometimes it's hey, can we take a level head and look at this and kind of make a smart decision? money. And so we just want to be a sounding board. And so it's it's an area that I feel like is very important. I'm it's I'm really glad I have the designation so it's something that I have the knowledge and can help people with and walk through. Shawn Sundsvold: Yeah. Yeah, I I know you know, ha my parents have gone went through divorce at one point and so being on the outside watching that one, so I can definitely, you know, f feel that, you know, and and know how how challenging that can be. So well, as we wrap up here, Zach, if people were curious about, you know, wanting to get some information from you as a financial advisor or a business owner who needs help, how can somebody get in touch with you to learn more about how that you could maybe help them? Zac O'Brien: Absolutely. So you anybody can visit us on our website, www.crown crownwealthgroup.com. my email is Zach Z A C at Crownwealth Group dot com. I've got an Instagram. I think that's probably linked in the bottom of this. so reach out. wherever you may need, you can send us an email. We do free consults. Again, we we've limited ourselves on the number of clients we take on, but that doesn't mean I can't help. I I find it a very important thing to be able to to listen to people and see if we can direct them in the right way and find them the right resources for what they need. Shawn Sundsvold: Awesome. Thank you. Well, Zach, like I said, this has been a fantastic conversation. I appreciate you being a guest on the show and you know, we'll look forward to having you again in the future. Zac O'Brien: Thanks, Sean. Thanks, Kelly. It's really nice being here with you guys. Kelly: Thanks.