Latest / Masters in Business / NBA Finals Bonus: MAI Capital's Joe McLean on Being the NBA's 'Money Whisperer'

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NBA Finals Bonus: MAI Capital's Joe McLean on Being the NBA's 'Money Whisperer' · Masters in Business

• 0:02
  Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Masters in
• 0:11
  Speaker 1: Business with Barry Ritholts on Bloomberg Radio this week on.
• 0:17
  Speaker 2: The podcast, What a Fascinating Conversation. Joe McClain, managing partner
• 0:21
  Speaker 2: in MAI Capital, began his career as a professional and
• 0:27
  Speaker 2: college basketball player before effectively becoming the money whisperer to
• 0:33
  Speaker 2: pro athletes. He works with pretty much old major athletes
• 0:38
  Speaker 2: across every sport basketball, football, hockey, baseball, golf, NASCAR, you
• 0:45
  Speaker 2: name it. I thought this conversation was really fascinating. Obviously,
• 0:50
  Speaker 2: the average person who's listening to this doesn't have one
• 0:53
  Speaker 2: hundred million dollar contract, but a lot of the ideas,
• 0:57
  Speaker 2: a lot of the rules, a lot of the ways
• 0:59
  Speaker 2: of thinking about money with college athletes and professional athletes
• 1:05
  Speaker 2: are surprisingly applicable to the average investor. I thought this
• 1:10
  Speaker 2: conversation was really fascinating. The idea of saving a substantial
• 1:16
  Speaker 2: percentage of your income in your first bucket, and once
• 1:20
  Speaker 2: that's covered, moving to a second bit of saving that
• 1:26
  Speaker 2: you're going to be able to live off in the future.
• 1:28
  Speaker 2: That that's your growth and investing bucket. Before the fun
• 1:33
  Speaker 2: entrepreneurial types of types of investment I thought this conversation
• 1:38
  Speaker 2: was fascinating, and I think you will also with no
• 1:41
  Speaker 2: further ado, my interview of Mai Capital's Joe McClain. I've
• 1:47
  Speaker 2: been looking forward to this for a while. I got
• 1:50
  Speaker 2: to start with your undergraduate years. Four years at Arizona
• 1:55
  Speaker 2: Division one ball. What was the original career plan.
• 2:00
  Speaker 3: To play professional basketball at the time I was eight
• 2:02
  Speaker 3: years old, Michael Jordan Larry Bird posters on the wall.
• 2:05
  Speaker 3: I remember when the ball was put in my hand,
• 2:07
  Speaker 3: That's all I wanted to do. I was super blessed.
• 2:10
  Speaker 3: Grew up in Pittsburgh, Pennsylvania, and then my dad, Ti
• 2:14
  Speaker 3: Boon Pickens in eighty four eighty five. He worked for
• 2:16
  Speaker 3: Gulf Oil and we either had to move to Houston
• 2:18
  Speaker 3: or to San Francisco Bay Area, and so we chose
• 2:21
  Speaker 3: the Bay Area and it became Chevron, and I met
• 2:24
  Speaker 3: a point guard named Jason Kidd who was my high
• 2:29
  Speaker 3: school AAU point guard, and so I was goind of
• 2:32
  Speaker 3: blessed to be put in that position. The whole world
• 2:34
  Speaker 3: would come watch him play, and I got seen by
• 2:37
  Speaker 3: all the right people. And my mom was the one
• 2:40
  Speaker 3: who decided which really what college I was going to
• 2:42
  Speaker 3: go to, because during the recruiting visit loude Olsen and
• 2:46
  Speaker 3: Bobby Elson, his wife showed up and she really connected
• 2:49
  Speaker 3: with his wife, and she said, that's who you're going
• 2:52
  Speaker 3: to go play for. I want you to be in
• 2:53
  Speaker 3: that environment.
• 2:54
  Speaker 2: So we'll get to loot in a minute. Did you
• 2:57
  Speaker 2: have height in high school? Like when did you shoot up?
• 3:00
  Speaker 3: I did. I was always six three sixty four and
• 3:02
  Speaker 3: then grew another two inches in college. Was a but
• 3:06
  Speaker 3: a full disclosure. I peaked around nineteen because everybody I
• 3:10
  Speaker 3: remember I'm fast forwarding, but I was in an NBA
• 3:14
  Speaker 3: pre draft camp and I was six foot six. I
• 3:16
  Speaker 3: think it was roun Our test was right right around
• 3:18
  Speaker 3: the same as height as me. And then we were
• 3:20
  Speaker 3: standing in our underwear and he extended his arms and
• 3:23
  Speaker 3: I had I was in proportion and he was not
• 3:26
  Speaker 3: in proportion. I think they get us some of those.
• 3:29
  Speaker 3: I was like, I don't know if I'm gonna make it.
• 3:32
  Speaker 2: So Ludelson Hall of Fame coach, right multiple trips to
• 3:36
  Speaker 2: the Final Four. You played all four years under him,
• 3:40
  Speaker 2: averaging ten points a game. Small forward. What was your position?
• 3:44
  Speaker 3: Shooting guard and guarded guarded the small forward in big
• 3:47
  Speaker 3: forward positions it's I had to learn very quickly how
• 3:50
  Speaker 3: to how to hold onto a guard's jersey because everybody
• 3:52
  Speaker 3: was getting much quicker, much faster than me.
• 3:55
  Speaker 2: And so you graduate college, you start playing pro in Europe.
• 4:00
  Speaker 2: Did you tell where'd you play? What CONTRIERI?
• 4:02
  Speaker 3: So you would basically, I would try out for an
• 4:04
  Speaker 3: NBA team and then get cut, and then you had
• 4:06
  Speaker 3: two decisions to make. One go to the minor leagues,
• 4:08
  Speaker 3: which is now the NBA G League. It was the
• 4:10
  Speaker 3: CBA at the time. So you go to Bismarck, North Dakota.
• 4:13
  Speaker 3: I lived there for a year, living in Bismarck Hotel
• 4:15
  Speaker 3: and traveling by bus, and then decided to go to
• 4:19
  Speaker 3: Europe for the years after that. So I played in
• 4:21
  Speaker 3: eleven countries because there's only two Americans per team, no
• 4:24
  Speaker 3: binding contracts. You lose a couple of games, they'll rip
• 4:26
  Speaker 3: up your contract and send you home, really and so
• 4:29
  Speaker 3: it's a great way to see the world.
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  Speaker 2: What countries did you did you play it?
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  Speaker 3: I played in played in Spain, Portugal, China, Australia, Cyprus.
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  Speaker 3: I moved to Ireland for a year to try to
• 4:39
  Speaker 3: get dual citizenship because then I wouldn't be counted as
• 4:42
  Speaker 3: one of those Americans. So it's the equivalent of probably
• 4:45
  Speaker 3: Division three basketball. I was sponsored by a pub. I
• 4:49
  Speaker 3: lived in a town called Balina, which was eight thousand people,
• 4:52
  Speaker 3: eighty four pubs. We were sponsored by Team long Necks.
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  Speaker 3: I made three hundred dollars a week and it was
• 4:56
  Speaker 3: I have family, family for life there. It was a
• 4:59
  Speaker 3: great way.
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  Speaker 2: That sounds like that sounds like a blast. So what
• 5:04
  Speaker 2: was the moment when you kind of realized, Hey, maybe
• 5:06
  Speaker 2: a pro career isn't my future. What was that come
• 5:10
  Speaker 2: to Jesus moment?
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  Speaker 3: They were both on the court and off the court.
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  Speaker 3: The closest, I will say the closest I ever got
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  Speaker 3: to the NBA was when they went on strike and
• 5:20
  Speaker 3: the Sacramento Kings had the seventh pick in the draft,
• 5:22
  Speaker 3: and I lived in the Bay Area, and I knew
• 5:24
  Speaker 3: they didn't have any NBA players to work out their
• 5:26
  Speaker 3: draft picks, and so I went and called this the
• 5:30
  Speaker 3: scout and said, Hey, I'll bring my own lunch. You
• 5:32
  Speaker 3: don't have to pay me. I'll just guard the guys.
• 5:34
  Speaker 2: That you justly red shirt. And the whole gotcha.
• 5:36
  Speaker 3: And I couldn't believe it, but he said, if you
• 5:38
  Speaker 3: can be here next Tuesday, show up And so Tuesday
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  Speaker 3: turned into twenty two straight days of workouts. I was
• 5:45
  Speaker 3: just literally working their draft pick out. They ended up
• 5:48
  Speaker 3: taking Jason Williams, but I got to listen to everything
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  Speaker 3: they were looking for and the process, and long story short,
• 5:55
  Speaker 3: the twenty third day, nobody else was there but the coaches,
• 5:57
  Speaker 3: and they said, we're working you out. Today's your day,
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  Speaker 3: no cayah. And made it all the way through pre draft,
• 6:03
  Speaker 3: all the way through the final cut. I was getting
• 6:05
  Speaker 3: on the bus to go to the very first game,
• 6:08
  Speaker 3: opening day, and I watched Oliver Miller walk past me
• 6:10
  Speaker 3: in the locker room and I was like, well, Oliver
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  Speaker 3: Miller's not on our team. And then I realized, no, he's
• 6:16
  Speaker 3: coming to take my spot. And so Rick Alloman looked
• 6:20
  Speaker 3: at me and his head went down, and I don't
• 6:22
  Speaker 3: even remember what he said. I just knew that was
• 6:25
  Speaker 3: that it was over right right. That was as close
• 6:27
  Speaker 3: as I was going to get. Was walking to the bus,
• 6:30
  Speaker 3: and now I had to figure out what to do next.
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  Speaker 2: So how do you get from, you know, working out
• 6:36
  Speaker 2: with the NBA team to pivoting into finance? What was
• 6:41
  Speaker 2: the what was the factor that tipped you that one.
• 6:44
  Speaker 3: I went in. I had no idea what to do.
• 6:46
  Speaker 3: All my buddies at the time. This is nineteen ninety nine,
• 6:49
  Speaker 3: so everyone that I knew in the Bay Area was
• 6:52
  Speaker 3: working for a dot com company. I mean it was
• 6:55
  Speaker 3: everything was dot com at the time. So I did
• 6:57
  Speaker 3: all my interviews and I would show up in a suit.
• 6:59
  Speaker 3: I would go to Oracle and I'd go to petstock Com,
• 7:02
  Speaker 3: I'd go to I mean literally, I didn't think I
• 7:03
  Speaker 3: did fifty plus interviews.
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  Speaker 1: Wow.
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  Speaker 3: And I would show up in a suit and everyone
• 7:06
  Speaker 3: else was in flip flops and T shirts. And It's like,
• 7:09
  Speaker 3: this doesn't feel right. I need structure. And so I
• 7:13
  Speaker 3: started playing basketball for this club called the Olympic Club,
• 7:16
  Speaker 3: and I met lawyers and accountants and financial service people,
• 7:20
  Speaker 3: and so they put me in the direction to interview.
• 7:22
  Speaker 3: I interviewed every financial service company, a lot of the
• 7:25
  Speaker 3: big ones, the Goldman's of the world. Said go get
• 7:27
  Speaker 3: experience and come back. And then I met an old
• 7:29
  Speaker 3: former athlete who had success at Franklin Templeton, and he said,
• 7:33
  Speaker 3: I'm going to give you a shot. I didn't even
• 7:35
  Speaker 3: know what I had an experience investing in mutual funds
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  Speaker 3: with the money I made in Europe, but didn't really
• 7:40
  Speaker 3: know what it was, and so I just said yes
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  Speaker 3: because he looked like a coach.
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  Speaker 2: To me.
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  Speaker 3: That was it. That was the only reason I got
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  Speaker 3: into financial service.
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  Speaker 2: And how'd you do it? Franklin Templeton. They're a great
• 7:49
  Speaker 2: the trillion dollars great shop. Jenny Johnson is the CEO.
• 7:54
  Speaker 3: Honestly the best company I've ever worked for. Wow. And
• 7:57
  Speaker 3: for transitioning, the transition for an athlete to do anything
• 8:00
  Speaker 3: else is a very very difficult thing because it's the
• 8:03
  Speaker 3: thing that you have as an athlete is you have structure,
• 8:05
  Speaker 3: You have a schedule, you have a sense of accountability,
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  Speaker 3: you have goals, you have a connection with a team.
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  Speaker 3: You have all of that, and the day you stopped playing,
• 8:13
  Speaker 3: you're on an island. There is no schedule, there is
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  Speaker 3: no level of accountability. And so what they gave me
• 8:19
  Speaker 3: was and this was I think you wrote it in
• 8:21
  Speaker 3: your first book. The first thing that this Jim Escabido
• 8:24
  Speaker 3: told me he was my manager at Franklin Templeton, and
• 8:27
  Speaker 3: he said, you don't know nothing about nothing, and he goes,
• 8:29
  Speaker 3: the sooner you learn that, the sooner you'll be curious
• 8:32
  Speaker 3: to start having this level of intellectual curiosity. And I
• 8:36
  Speaker 3: hold on to that every day. It's one of the
• 8:38
  Speaker 3: great great gifts he gave me, honestly, and they what
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  Speaker 3: I got to do that Franklin Templeton was spend six
• 8:45
  Speaker 3: years in a car. I think I drove over four
• 8:48
  Speaker 3: hundred thousand miles as a wholesaler, all over the state
• 8:51
  Speaker 3: of Pennsylvania, all over the state of Arizona and northern
• 8:54
  Speaker 3: California where my regions and do hundreds of rubber chicken
• 8:57
  Speaker 3: dinners communicating the advisor. But I was working with a
• 9:01
  Speaker 3: financial advisor, and I got to just meet hundreds and
• 9:04
  Speaker 3: hundreds and hundreds of people going through different situations with
• 9:08
  Speaker 3: their money, and I just I learned from all these
• 9:10
  Speaker 3: other people's that was It was an awesome experience with them.
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  Speaker 2: So I want to roll back a moment. You described
• 9:18
  Speaker 2: the structure of being an athlete, and you gave me
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  Speaker 2: six bullet points. They sound like they would be useful
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  Speaker 2: for anything. Run through those bullet points.
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  Speaker 3: Again, so they have a I don't know, I never
• 9:31
  Speaker 3: do it, which was a sense of accountability. There's there's
• 9:34
  Speaker 3: a schedule, there's a structure. Every day you wake up
• 9:38
  Speaker 3: knowing you know what the what the common goal is,
• 9:41
  Speaker 3: both as an individual and the role you play, and
• 9:45
  Speaker 3: there's a level of expectation as to what you need
• 9:48
  Speaker 3: to not just accomplish in one day, but one month,
• 9:52
  Speaker 3: six months down the line. I mean, you have the
• 9:55
  Speaker 3: NCAA tournament, you have all these things going on that
• 9:57
  Speaker 3: have longer term or goals, but you got to have
• 9:59
  Speaker 3: a to day discipline to execute on that. When you transition,
• 10:03
  Speaker 3: it's all gone. Well.
• 10:05
  Speaker 2: That structure, that setup sounds like it can be applied
• 10:09
  Speaker 2: to any endeavor in life, any organization, especially where you're
• 10:14
  Speaker 2: working with other people.
• 10:16
  Speaker 3: That's right, and the I see a little bit too
• 10:19
  Speaker 3: much where younger people jump to become an entrepreneur, and
• 10:24
  Speaker 3: I get the premise to want to be an owner
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  Speaker 3: of everything you do quickly, but there is a level
• 10:30
  Speaker 3: of foundation and humility that can be accomplished by going
• 10:33
  Speaker 3: and seeking out another environment that provides those tools for you.
• 10:38
  Speaker 2: So you're a former college player, you're a former almost
• 10:42
  Speaker 2: pro player. What did you learn shooting hoops that the
• 10:47
  Speaker 2: CFP or CFA curriculum just simply can't teach.
• 10:54
  Speaker 3: Perseverance? This is something I'm trying to teach my kids,
• 10:59
  Speaker 3: I learned to fail and really enjoy it. Uh. And
• 11:03
  Speaker 3: for a while I was failing and not not really
• 11:08
  Speaker 3: reflecting on why I failed. People. I think that's the
• 11:11
  Speaker 3: people use that term a lot like failure is a
• 11:13
  Speaker 3: good thing, it's the best thing to have my life.
• 11:14
  Speaker 3: It's not the failing part. It's what you learn from
• 11:16
  Speaker 3: failing that that really is effective. Uh. And so in
• 11:21
  Speaker 3: the in the idea that you're willing to bet on
• 11:23
  Speaker 3: yourself at all costs, no matter what. If you think
• 11:25
  Speaker 3: about that as an athlete, in the mindset is I'm
• 11:28
  Speaker 3: willing to do whatever it takes. I'll go broke to
• 11:31
  Speaker 3: try to get this done. I have been broke. I'll
• 11:33
  Speaker 3: take as many risks as I possibly can take. I'll fail, fail, fail.
• 11:37
  Speaker 3: Those are not necessarily great attributes as an investor in
• 11:40
  Speaker 3: terms of the translating that mindset, so as an advisor
• 11:43
  Speaker 3: to appreciate where an athlete's coming from, to actually make
• 11:46
  Speaker 3: them aware of those types of traits that are great
• 11:50
  Speaker 3: qualities to have success in your in your craft, but
• 11:53
  Speaker 3: that may not be great qualities to have when you
• 11:56
  Speaker 3: become start thinking about financial advice and investing.
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  Speaker 2: So so let's talk a little bit about athletes as clients.
• 12:03
  Speaker 2: You somewhat famously won't take on a new client if
• 12:08
  Speaker 2: they don't save at least sixty percent of what their
• 12:11
  Speaker 2: basketball earnings are. I'm curious, how did you come up
• 12:15
  Speaker 2: with that rule? How many potential clients turn you down?
• 12:20
  Speaker 2: How many clients do you have to turn down? Tell
• 12:23
  Speaker 2: us a little bit about the genesis of that. It
• 12:26
  Speaker 2: seems to make sense. What's the average NBA career seven
• 12:29
  Speaker 2: years something like that.
• 12:30
  Speaker 3: A little bit less than that, probably, all right.
• 12:32
  Speaker 2: So it makes sense. Tell us where this rule came from.
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  Speaker 3: It came from learning from my early mistakes as an advisor,
• 12:40
  Speaker 3: because I was willing to take anybody as a client.
• 12:42
  Speaker 3: That was the one thing. If I look back, I
• 12:44
  Speaker 3: wouldn't have done that. But you're building a business. You
• 12:46
  Speaker 3: try to get revenue, and you know that happens, everybody
• 12:49
  Speaker 3: does it. How I came up with the measurement was
• 12:54
  Speaker 3: a young person saying I want to be a millionaire,
• 12:58
  Speaker 3: and they had an MBA contract. It was a three
• 13:00
  Speaker 3: year deal, and I said, all right, when do you
• 13:03
  Speaker 3: want to be a millionaire, Because here's the money you're
• 13:05
  Speaker 3: going to make, here's the taxes that you're going to pay.
• 13:08
  Speaker 3: You can actually make that choice as to one when
• 13:11
  Speaker 3: you want to log into your account and see a
• 13:13
  Speaker 3: million dollars. And so it's like, well, what do you mean.
• 13:16
  Speaker 3: He's like, well, if you save thirty percent, it's going
• 13:18
  Speaker 3: to be May first of you know, twenty twenty eight,
• 13:21
  Speaker 3: that's when you're going to have a million dollars. He goes, well,
• 13:23
  Speaker 3: I don't want to wait that long. I said, okay,
• 13:25
  Speaker 3: well what if you did forty percent? What if you
• 13:27
  Speaker 3: did sixty percent? And so what I realized is using
• 13:30
  Speaker 3: fear is not a great motivator for young people to
• 13:33
  Speaker 3: make decisions. Putting it around a milestone and or a
• 13:39
  Speaker 3: level of respect that they want to attain does And
• 13:42
  Speaker 3: so for me that became the parameter of then, okay,
• 13:45
  Speaker 3: if you want to become a client, we want to
• 13:46
  Speaker 3: have a relationship built on mutual respect. Then there's some
• 13:50
  Speaker 3: things that I'm going to require. And for me, it
• 13:54
  Speaker 3: was it was sixty cents of every net dollar that.
• 13:56
  Speaker 2: They after tax after agent after.
• 13:59
  Speaker 3: All, and then it's second deal, then it goes to
• 14:01
  Speaker 3: seventy percent. Third deal, it's eighty eighty five percent. And
• 14:05
  Speaker 3: then what we realize is we had clients talking in
• 14:09
  Speaker 3: the locker room about how much they're saving eventually bestly,
• 14:13
  Speaker 3: but how much they're saving. And then we would show
• 14:15
  Speaker 3: a scoreboard report of hey, so and so, you know
• 14:18
  Speaker 3: that he saved ninety two percent last year, you saved
• 14:21
  Speaker 3: seventy four And he's like, I don't believe it. And
• 14:22
  Speaker 3: then like they're texting back and forth and it begins
• 14:24
  Speaker 3: this dialogue, and it was awesome. It's it's so it was.
• 14:28
  Speaker 3: It sounds strenuous, but it's easier said than done. Now
• 14:31
  Speaker 3: when you see the level of the contracts and how
• 14:33
  Speaker 3: much money is going in and out of someone's life.
• 14:35
  Speaker 2: This is this is the exact opposite of the thirty
• 14:39
  Speaker 2: for thirty Sports Illustrated story. Eighty percent of NFL players
• 14:45
  Speaker 2: seventy percent of NBA players subsequently file bankruptcy, like crazy,
• 14:51
  Speaker 2: crazy numbers. How significant is that? In your mind? It
• 14:58
  Speaker 2: sounds like that's sort of a fearful threat. Doesn't really
• 15:03
  Speaker 2: get the job done.
• 15:05
  Speaker 3: It doesn't. And that's if you think about if I'm
• 15:07
  Speaker 3: talking to a now nineteen twenty year old and I say,
• 15:12
  Speaker 3: you know what if in three years from now, the
• 15:15
  Speaker 3: next number one draft pick walks into the locker room
• 15:17
  Speaker 3: and they walk directly to your locker, because everybody knows
• 15:21
  Speaker 3: that you know, it's we'll talk a little bit about
• 15:23
  Speaker 3: the pros pro, but everybody knows that you under your
• 15:25
  Speaker 3: business on the court and you hand your business off
• 15:26
  Speaker 3: the court, and that you're someone that's respected in both
• 15:29
  Speaker 3: the business community and the community around the team that
• 15:32
  Speaker 3: you play in. Because there's gonna be pros in that
• 15:34
  Speaker 3: locker room and there's gonna be knuckleheads, And if you
• 15:37
  Speaker 3: don't know who the knucklehead is, I promise is probably you.
• 15:40
  Speaker 3: So so what we want to do is just teach
• 15:42
  Speaker 3: you the traits to become that person where someone wants
• 15:45
  Speaker 3: to walk director to your locker and ask questions and
• 15:49
  Speaker 3: so that that versus showing them statistics are going broke.
• 15:53
  Speaker 3: Most young people are gonna be like, I'm on one
• 15:55
  Speaker 3: in a million. That's not gonna be me. And the
• 15:57
  Speaker 3: reason why a lot of them do go broke still
• 16:00
  Speaker 3: is not many clients. Many athletes sorry, retire with ten
• 16:04
  Speaker 3: million dollars, fifteen million dollars, twenty million dollars, but they
• 16:06
  Speaker 3: have significant burn rates that are three four million dollars,
• 16:09
  Speaker 3: and so do the math. In five years, it's gone.
• 16:12
  Speaker 2: Divorces are expensive, child support is expensive. There are a
• 16:16
  Speaker 2: lot of friends with business plans that could be an expensive, right,
• 16:21
  Speaker 2: can't miss. By the way, everybody in that locker room
• 16:25
  Speaker 2: probably statistically is one in a million, right, Yeah, how
• 16:28
  Speaker 2: many people play in the NBA.
• 16:31
  Speaker 3: Less than four hundred?
• 16:32
  Speaker 2: All right, this is three hundred and fifty million people
• 16:35
  Speaker 2: almost by definition theirurdred and fifty people are one in
• 16:38
  Speaker 2: a million. It's it's kind of a kind of amazing.
• 16:42
  Speaker 2: The other thing you have your athletes do is to
• 16:45
  Speaker 2: try and save two years of cash. That's a quote
• 16:49
  Speaker 2: of yours quote. Athletes need two years of cash as
• 16:51
  Speaker 2: a buffer. How do you sell that idea to someone
• 16:55
  Speaker 2: who just signed an eight figure, you know, multi year deal.
• 16:58
  Speaker 3: Well, you get a chance to shit, especially early days,
• 17:01
  Speaker 3: Like the rules evolve over time once that once someone
• 17:04
  Speaker 3: has shown their level of professionalism with their money. So
• 17:08
  Speaker 3: early days, you know, there's that three bucket strategies I've
• 17:11
  Speaker 3: always put in place, which is that safety security bucket
• 17:14
  Speaker 3: that you're referencing. And then but that's the first time
• 17:18
  Speaker 3: someone's learning what an NBA or an NFL or an
• 17:22
  Speaker 3: MLB contract looks like, Like here's the DEO I just signed.
• 17:25
  Speaker 3: But then what's all these red numbers that go through it,
• 17:27
  Speaker 3: and who's faika and in all these all these terms,
• 17:30
  Speaker 3: and and uh, you know they see that. You know
• 17:32
  Speaker 3: what a ten million dollar contract really is, right, it
• 17:36
  Speaker 3: is much much much less. And then there's in the NBA,
• 17:38
  Speaker 3: there's another tax. It's like a jock tax that they
• 17:40
  Speaker 3: may or may not get back based on basketball related income,
• 17:43
  Speaker 3: which is in another ten percent that attached to these things.
• 17:45
  Speaker 2: What is the tax?
• 17:47
  Speaker 3: So there's a there's a tax that everybody in the NBA,
• 17:50
  Speaker 3: you know, gets, It's up to ten percent, and it's
• 17:53
  Speaker 3: related to it the agreement they have with the owners
• 17:56
  Speaker 3: that they have to get up to forty nine percent
• 17:58
  Speaker 3: of a number of a revew And if the owners
• 18:00
  Speaker 3: don't get that number, then they get to dip into
• 18:02
  Speaker 3: the cookie jar and take that basketball related income and
• 18:06
  Speaker 3: put it in their pocket. So most of the time
• 18:09
  Speaker 3: they get sixty five percent of that back. So but
• 18:12
  Speaker 3: that in our budget that we we budget as if
• 18:15
  Speaker 3: you're never going to get it back. So it is
• 18:16
  Speaker 3: a nice cherry on top at the end of the year.
• 18:19
  Speaker 3: But when you think about paying taxes in every single
• 18:22
  Speaker 3: state and sometimes city that they play in, and whether
• 18:25
  Speaker 3: you know, it could be playing for the New York Knicks,
• 18:27
  Speaker 3: the or the Golden State Warriors, interpaying a much higher
• 18:30
  Speaker 3: level of tax and so going through that whole experience
• 18:32
  Speaker 3: for the very first time exactly exactly. So it's a
• 18:38
  Speaker 3: you know, helping someone's pre experience what it's going to
• 18:42
  Speaker 3: look like and feel like to get paid for the
• 18:44
  Speaker 3: next three years. And because we've seen the movie over
• 18:46
  Speaker 3: and over, I'm just trying to show you the movie.
• 18:48
  Speaker 3: Your story is going to be different than everybody else's,
• 18:50
  Speaker 3: but there's going to be common ground that it's just
• 18:54
  Speaker 3: just for you to pre experience in and understand it
• 18:56
  Speaker 3: and then for you to put your own goals and
• 18:59
  Speaker 3: milestones on top of that.
• 19:00
  Speaker 2: Explain the three buckets. What are the three buckets you'd discussed.
• 19:03
  Speaker 3: So there's a safety and security bucket and that that
• 19:06
  Speaker 3: typically is your cash to support At least those are
• 19:09
  Speaker 3: twenty four months, because I think in the NFL you
• 19:12
  Speaker 3: may get paid just during the season, and Major League
• 19:15
  Speaker 3: Baseball maybe six months. The NBA could be over a
• 19:18
  Speaker 3: twelve month period. Everyone's cash flows different, so I want
• 19:21
  Speaker 3: two years of season seasonality to support your lifestyle. Inside
• 19:25
  Speaker 3: the safety and security bucket, If you buy a home,
• 19:29
  Speaker 3: it has to be necessary. It's a home where you
• 19:31
  Speaker 3: want to live, not necessarily where you play. Quite often
• 19:34
  Speaker 3: someone gets traded multiple times. They bought homes in multiple cities,
• 19:37
  Speaker 3: and now you're trying to sell a house in Milwaukee
• 19:39
  Speaker 3: when you're playing in Dallas, but you really live in Florida, sout.
• 19:44
  Speaker 3: Just put the house that you want to live in
• 19:45
  Speaker 3: long term in the safety and security bucket and typically
• 19:48
  Speaker 3: we'll buy that with no debt because I don't know
• 19:51
  Speaker 3: when the next contract's going to come once you filled
• 19:53
  Speaker 3: that bucket. The second bucket is the growth bucket. Okay,
• 19:56
  Speaker 3: this is where now you're starting to get to understand
• 19:58
  Speaker 3: how money works for you and in theory, all I
• 20:02
  Speaker 3: want young people to understand is, if you get twenty
• 20:05
  Speaker 3: four paychecks from the NBA over a twelve month period,
• 20:09
  Speaker 3: our goal by the end of your contract is to
• 20:11
  Speaker 3: find twenty four other ways for you to get compensated.
• 20:14
  Speaker 3: It could be in bonds, it could be in dividend,
• 20:16
  Speaker 3: it could be in real estate. Over time. However, inside
• 20:19
  Speaker 3: the growth bucket, for the first contract of their life,
• 20:22
  Speaker 3: eighty five percent of it has to be liquid. It
• 20:26
  Speaker 3: has to be liquid because quite often I saw when
• 20:29
  Speaker 3: I was researching young athletes were far too ill liquid.
• 20:32
  Speaker 3: They were investing in private deals. They didn't know the
• 20:35
  Speaker 3: value of it. They didn't it wasn't supporting their lifestyle,
• 20:38
  Speaker 3: and then all of a sudden they didn't have the
• 20:39
  Speaker 3: safety security bucket and they had to sell everything, and
• 20:42
  Speaker 3: most of it wasn't worth anything. So it's no genius
• 20:45
  Speaker 3: acid allocation strategy from Yale that I came up with.
• 20:49
  Speaker 3: It's just life and having someone prove to us over
• 20:52
  Speaker 3: time that they know how to save and they're responsible money,
• 20:56
  Speaker 3: so they can reserve the right for the third bucket,
• 20:58
  Speaker 3: which is the dream and entre an eial bucket.
• 21:00
  Speaker 2: Okay, so what goes into that?
• 21:02
  Speaker 3: So that could actually be setting up a business. It
• 21:06
  Speaker 3: could be even I throw venture capital and private equity
• 21:10
  Speaker 3: over there, early stage opportunities. It could be the second car,
• 21:16
  Speaker 3: because it's I don't I don't care what kind of
• 21:19
  Speaker 3: car you get. I don't care what kind of watch
• 21:21
  Speaker 3: you buy. You just get one, right if you want
• 21:25
  Speaker 3: to get you want to get another great car, sell
• 21:27
  Speaker 3: the other one and get get the next one. But
• 21:29
  Speaker 3: that extra bucket, it could be five to ten percent
• 21:31
  Speaker 3: of your life that sits over there. Now, when you
• 21:34
  Speaker 3: when you put a safety and security bucket, a growth bucket,
• 21:37
  Speaker 3: and a dream bucket in front of a young person,
• 21:39
  Speaker 3: which one do you think they want to fill first?
• 21:41
  Speaker 2: Well, the dream bucket, of course we all do. That's
• 21:43
  Speaker 2: the fun one.
• 21:45
  Speaker 3: So the discipline is you've got to fill the first
• 21:47
  Speaker 3: the first two. You know before you had to reserve
• 21:50
  Speaker 3: the right to be an entrepreneur or to fulfill that dream.
• 21:54
  Speaker 3: Because part of the what we talk about a lot
• 21:56
  Speaker 3: is live the dream that you're playing right now. Don't
• 21:59
  Speaker 3: try to go out and establish all these other things
• 22:02
  Speaker 3: and crafts, because it's focus on what you do well
• 22:04
  Speaker 3: and because this is your as you said, seven years
• 22:06
  Speaker 3: or less could be the greatest earning capacity in your
• 22:08
  Speaker 3: entire life right now.
• 22:10
  Speaker 2: Huh really really fascinating. Coming up, we continue our conversation
• 22:14
  Speaker 2: with Joe McLean discussing why he launched a boutique asset
• 22:19
  Speaker 2: manager for athletes. I'm Barry Ridults. You're listening to Masters
• 22:23
  Speaker 2: in Business on Bloomberg Radio. I'm Barry Ridults. You're listening
• 22:36
  Speaker 2: to Masters in Business on Bloomberg Radio. My extra special
• 22:39
  Speaker 2: guest today is Joe McLean. He is known as the
• 22:43
  Speaker 2: money whisperer to professional athletes. Let's talk a little bit
• 22:47
  Speaker 2: about how you got that title. You're a wholesaler for
• 22:53
  Speaker 2: mutual funds at Franklin Templeton. What led you to launch
• 22:58
  Speaker 2: a boutique asset management shop catering to start and professional athletes.
• 23:04
  Speaker 3: So I went on from wholesaling and then I ended up.
• 23:07
  Speaker 3: I went to two other companies, Lord Abbott and then
• 23:10
  Speaker 3: Alliance Bernstein and Alliance Burnsteat at the times launched a
• 23:15
  Speaker 3: advisor institute, which was there was these three hundred advisors
• 23:18
  Speaker 3: at Bernstein at the time that were bringing in one
• 23:20
  Speaker 3: hundred plus million in assets every year, and it was
• 23:23
  Speaker 3: a highly dedicated and focused team. And so I went
• 23:27
  Speaker 3: out and trained that to financial advisors as to how
• 23:29
  Speaker 3: to build a business and work with centers of influence.
• 23:32
  Speaker 3: And I met another kind of mentor in my life
• 23:35
  Speaker 3: who was a former minister, and then got a had
• 23:42
  Speaker 3: a master's in neuro linguistic programming, and then understood how
• 23:46
  Speaker 3: to communicate effectively with people. And I spent two years
• 23:48
  Speaker 3: on the road doing that and then eventually became an
• 23:50
  Speaker 3: advisor at Bernstein a bunch of old teammates. I was
• 23:54
  Speaker 3: less than a year into my financial advisory career. Came
• 23:57
  Speaker 3: up to me when they were getting ready to retire
• 23:59
  Speaker 3: and they said, I, I've been watching you. I think
• 24:01
  Speaker 3: you're in that money thing. Can you look at my stuff?
• 24:05
  Speaker 2: That money? Shit, that's about that money.
• 24:08
  Speaker 3: Sit right, That's what they said. And these were thirty
• 24:11
  Speaker 3: two year olds, some had made over one hundred million
• 24:14
  Speaker 3: dollars in assets. I had not grown up with any wealth.
• 24:16
  Speaker 3: But now I'm fifteen years into the career and just
• 24:18
  Speaker 3: kind of learned from other families and obviously the companies
• 24:21
  Speaker 3: that have taught me things and being on the road,
• 24:24
  Speaker 3: and realized no one has ever sat you down and
• 24:29
  Speaker 3: walked through a level of planning that would be required
• 24:32
  Speaker 3: for this level of wealth to prepare you, at age
• 24:35
  Speaker 3: thirty two to live off of this money.
• 24:37
  Speaker 2: That's astonishing.
• 24:38
  Speaker 3: There was no class that we ever took in college, right,
• 24:41
  Speaker 3: and even if there was a class, we probably did
• 24:44
  Speaker 3: would not have paid that much attention to personal finance
• 24:47
  Speaker 3: and investing and so in sports and wealth was not
• 24:52
  Speaker 3: something anybody was really interested in. I heard it from
• 24:56
  Speaker 3: other firms who said, I don't want to get involved
• 24:58
  Speaker 3: with athletes, it's just babysitter. And so back then there
• 25:02
  Speaker 3: was no There was no sports and entertainment divisions at
• 25:05
  Speaker 3: wealth management firms. Nobody was involved. And so I went
• 25:09
  Speaker 3: to Burnsteaed and said, I this is it. This is
• 25:11
  Speaker 3: where I want to be. You know, I'm going to
• 25:13
  Speaker 3: focus my whole rest of my life on this. I'm
• 25:15
  Speaker 3: going to be a coach, but to do it in finance,
• 25:17
  Speaker 3: and it was just something that they were open to
• 25:19
  Speaker 3: but not interested in because it was way beyond investing.
• 25:24
  Speaker 3: It was personal finance and cash flow and budgeting and
• 25:27
  Speaker 3: creating a protected circle of because there's so many things
• 25:30
  Speaker 3: that could touch someone's money. Could be the car guy,
• 25:32
  Speaker 3: could be the suit person, could be the jeweler. It
• 25:34
  Speaker 3: could be the family that needed to be controlled and
• 25:38
  Speaker 3: put in put the scoreboard up financially as to what
• 25:41
  Speaker 3: required to have success.
• 25:42
  Speaker 2: That sounds a lot like a traditional family office.
• 25:46
  Speaker 3: I had no idea what a family office was at
• 25:48
  Speaker 3: that time, but that I was identifying this was the need.
• 25:53
  Speaker 3: So long story short, it couldn't be done at a
• 25:57
  Speaker 3: wealth traditional wealth management business. It had to be an
• 26:01
  Speaker 3: raa at time for me. And so that was the
• 26:04
  Speaker 3: move to start Intersect at the time, which was heavily
• 26:08
  Speaker 3: focused on personal finance and family office. And I was
• 26:13
  Speaker 3: still learning the game too, and the contracts weren't as
• 26:15
  Speaker 3: big as they are today. But I remember being in
• 26:17
  Speaker 3: the twenty eleven draft. I think I was competing against
• 26:20
  Speaker 3: two other financial advisors. Maybe nobody was really interested in
• 26:24
  Speaker 3: this industry.
• 26:25
  Speaker 2: That's unbelievable to me. So eleven people, you're managing one
• 26:31
  Speaker 2: point seven billion dollars for about fifty clients. How did
• 26:35
  Speaker 2: that grow? And then when did you start to hear
• 26:38
  Speaker 2: from people thinking, hey, this might be a good talk
• 26:41
  Speaker 2: in to a bigger shop.
• 26:42
  Speaker 3: So that happened all in less than seven years, and
• 26:47
  Speaker 3: it was in sports. I realized a couple of things. One,
• 26:50
  Speaker 3: I didn't want to have a client base where it
• 26:52
  Speaker 3: was only athletes. Had you had to pass the test
• 26:54
  Speaker 3: of a fifty year old business owner who was going
• 26:56
  Speaker 3: to ask more sophisticated questions, that was going to challenge
• 27:00
  Speaker 3: you to make sure that you create a process, a plan,
• 27:02
  Speaker 3: and a portfolio that was sophisticated enough to support his
• 27:07
  Speaker 3: or her needs. So this became this mutual admiration club
• 27:10
  Speaker 3: of entrepreneurs, business owners, and athletes. And I found that,
• 27:14
  Speaker 3: you know, baseball player wants to talk to an NBA
• 27:17
  Speaker 3: player and a golfer and so on. It was a
• 27:19
  Speaker 3: great connection to have community built in there, and that's
• 27:22
  Speaker 3: how all these other sports came up about it. I
• 27:25
  Speaker 3: was a classic case of high growth trying to keep
• 27:28
  Speaker 3: up with operations. So it's constantly taking my own capital
• 27:32
  Speaker 3: and reinvesting and trying to stay up with the support.
• 27:35
  Speaker 3: And that's when I had someone come up to me
• 27:38
  Speaker 3: and I was trying to find an investor just to
• 27:40
  Speaker 3: help me out because I was I couldn't support it myself.
• 27:43
  Speaker 3: And that's when I was introduced to Mai at the time,
• 27:46
  Speaker 3: who unbeknownst to me, really that was a very quietly
• 27:50
  Speaker 3: built family office for athletes dating back to Arnold Palmer
• 27:55
  Speaker 3: and Martin McCormick were the first owners and client of
• 27:58
  Speaker 3: the business.
• 27:59
  Speaker 2: Client that's pretty sid yeah, yeah.
• 28:01
  Speaker 3: And that was Mark. Mark McCormick was the for sure
• 28:05
  Speaker 3: the the OG and in the sports agency world, where
• 28:09
  Speaker 3: his his focus was to take an athlete to an
• 28:11
  Speaker 3: entrepreneur to an owner of everything they did right, and
• 28:14
  Speaker 3: that's when you know he got He famously got Arnold
• 28:16
  Speaker 3: Palmer out of a Wilson. Palmer did handshake deals on
• 28:20
  Speaker 3: just about everything he ever did and had a handshake
• 28:22
  Speaker 3: deal with Wilson that that Mark saw the value of
• 28:27
  Speaker 3: what he was doing for that company and was able
• 28:30
  Speaker 3: to renegotiate that most people don't like. Wilson was actually
• 28:32
  Speaker 3: a meat packing company way back when, and it was
• 28:37
  Speaker 3: and a banker came in and saw that it was
• 28:39
  Speaker 3: not it was undervalue because they weren't utilizing the entire cow.
• 28:43
  Speaker 3: And they started taking the hides and making footballs and
• 28:46
  Speaker 3: basketballs from them and extracted extraordinary value out of that,
• 28:52
  Speaker 3: and it eventually became a sporting goods and equipment company.
• 28:55
  Speaker 3: So they were very savvy when they they did that
• 28:58
  Speaker 3: deal with Arnold Palmer, and McCormick came in and unlocked
• 29:00
  Speaker 3: all kinds of value for Palmer. And so when you
• 29:03
  Speaker 3: look at athletes now they talk about becoming an owner
• 29:06
  Speaker 3: of everything they do. This is something they did. This
• 29:08
  Speaker 3: is nineteen seventy three, seventy four.
• 29:11
  Speaker 2: I kind of remember Arnie Palmer designing golf courses and
• 29:15
  Speaker 2: putting his names and getting fairly well compensated for that.
• 29:19
  Speaker 2: Am I recalling that correctly?
• 29:21
  Speaker 3: He did that and a lot more like everything and
• 29:24
  Speaker 3: the drink right and that umbrella, that Leconic logo that
• 29:28
  Speaker 3: he has if you're in that golf world, you know
• 29:30
  Speaker 3: that's Arnold Palmer. And he was the one who famously
• 29:34
  Speaker 3: told every athlete, if you're going to put your signature
• 29:35
  Speaker 3: on something, make sure people can recognize who you are.
• 29:39
  Speaker 3: And I know Peyton Manning and others have taken on
• 29:41
  Speaker 3: that that banner, and so he was. He was a
• 29:45
  Speaker 3: trailblazer very early days. And his level of wealth was extraordinary.
• 29:50
  Speaker 3: That would rival the likes of Stephen Curry and Kevin
• 29:53
  Speaker 3: Durant as you see today.
• 29:55
  Speaker 2: And the other thing about golfers, they have a much
• 29:58
  Speaker 2: longer the success have a much longer career life and
• 30:02
  Speaker 2: then they start playing in the seniors for another.
• 30:05
  Speaker 3: If you can do it, yeah, it's but there's nothing
• 30:07
  Speaker 3: like golf is a completely different level of financial planning
• 30:11
  Speaker 3: because there is no guaranteed contracts. Right if you win
• 30:14
  Speaker 3: a tournament, yes you may get a year or two
• 30:16
  Speaker 3: of your tour card, but if you don't and you're
• 30:21
  Speaker 3: missing cuts, then there's no money. And it's it's one
• 30:24
  Speaker 3: of the most difficult sports to survive. The successful ones obviously,
• 30:29
  Speaker 3: as you said, could have thirty forty.
• 30:30
  Speaker 2: Fifty, but it's a winner take all.
• 30:32
  Speaker 3: It is it's very difficult.
• 30:33
  Speaker 2: So MII acquires Intersect. After the acquisition, you go from
• 30:40
  Speaker 2: a founder CEO to managing partner and running the multifamily
• 30:46
  Speaker 2: office inside this larger platform. You spend a long time
• 30:51
  Speaker 2: building up culture and trust. How do you maintain that
• 30:55
  Speaker 2: when you're tucked into a larger shop and a very
• 30:58
  Speaker 2: different brand.
• 30:59
  Speaker 3: The the good thing was, and it took a long
• 31:02
  Speaker 3: time for me to figure it out before I made
• 31:04
  Speaker 3: a decision, was the firm was very was a service
• 31:08
  Speaker 3: oriented business. It wasn't a business that was providing services,
• 31:12
  Speaker 3: and so that was that was very different for me
• 31:14
  Speaker 3: because I actually was not. I didn't come in with
• 31:17
  Speaker 3: any high level of business prowess. I was a service provider.
• 31:20
  Speaker 3: I still am. I think there's nothing beneath me in
• 31:23
  Speaker 3: terms of what's required to serve a client and the
• 31:26
  Speaker 3: people around them. And they had the same mindset because
• 31:29
  Speaker 3: it was actually at the time a loss leader for
• 31:32
  Speaker 3: the IMG business, and so IMG would charge their twenty
• 31:35
  Speaker 3: thirty percent and they would have MAI, which was McCormick
• 31:38
  Speaker 3: Advisors International was the acronym, and that was just a
• 31:41
  Speaker 3: service center to do your taxes, your bills and you know,
• 31:44
  Speaker 3: build your portfolios and so that they had the same
• 31:46
  Speaker 3: mindset that I had. And so but there was another level,
• 31:51
  Speaker 3: as you know, of acquisitions and really growing and so
• 31:54
  Speaker 3: you know, we had gone from twelve billion to eighty
• 31:56
  Speaker 3: plus billion in assets. So that's it is difficult to
• 31:58
  Speaker 3: maintain the culture, but it's a very independent, fiduciary minded
• 32:02
  Speaker 3: world that was aligned to me. I think the evolution
• 32:05
  Speaker 3: of where the advisors and the clients are going now
• 32:08
  Speaker 3: from here is this level of partnership, because that was
• 32:10
  Speaker 3: what I was experiencing. My boutique is not a client
• 32:14
  Speaker 3: advisor or advisor client relationship. It was a partnership because
• 32:17
  Speaker 3: it's young people don't want to be told what to do.
• 32:20
  Speaker 3: They want to be given information to make better decisions,
• 32:23
  Speaker 3: but don't tell me what to do. And so I
• 32:27
  Speaker 3: think I've learned a lot in that culture that that's
• 32:29
  Speaker 3: where now the term family office is everywhere. That's how
• 32:32
  Speaker 3: you got to build it going forward.
• 32:34
  Speaker 2: So I love the idea of the distinction between simply
• 32:39
  Speaker 2: managing money, which is this money thing your friend asked
• 32:43
  Speaker 2: you about, versus managing wealth and all the related services.
• 32:48
  Speaker 2: Is that effectively the evolution that you've gone through from
• 32:52
  Speaker 2: from intersect Tomai.
• 32:55
  Speaker 3: A little bit, I would say, I would say the
• 32:59
  Speaker 3: MAI and the So the industry is coming to quite
• 33:01
  Speaker 3: interesting to how we've serviced athletes. And it's not just
• 33:06
  Speaker 3: because there were athletes, it's just because they were young people.
• 33:08
  Speaker 3: You know, the industry is trying to turn towards how
• 33:11
  Speaker 3: to service the next generation of wealth and this transfer
• 33:14
  Speaker 3: of wealth that's happening from the baby boomers. And if
• 33:18
  Speaker 3: you look at the history of advice, the history of
• 33:20
  Speaker 3: advice really was built on the backs of the baby boomers.
• 33:23
  Speaker 3: So I always look at nineteen eighty one, had I
• 33:26
  Speaker 3: think it was six or seven hundred mutual funds to
• 33:28
  Speaker 3: choose from, and all of a sudden, it was this
• 33:29
  Speaker 3: hockey stick, it's just exploded. And what happened, well, it
• 33:33
  Speaker 3: was the baby boomers returning thirty five, which usually tends
• 33:36
  Speaker 3: to be the age where you finally have some money
• 33:37
  Speaker 3: to spend and invest. And then you look at this explosion,
• 33:42
  Speaker 3: and the value proposition to that marketplace was simply access,
• 33:46
  Speaker 3: access to the capital market. So that was I always
• 33:49
  Speaker 3: tell the young people, if you ever watch Pursuit of Happiness,
• 33:51
  Speaker 3: great movie, Will Smith cold calling. He was just giving
• 33:54
  Speaker 3: you access. And then it became about alpha and generating.
• 33:57
  Speaker 3: How do I my black box research is better than
• 34:00
  Speaker 3: this person? Right? And then it became about spending an
• 34:02
  Speaker 3: income strategies and retirement. That was the third one, all
• 34:05
  Speaker 3: satisfying to baby boomers. Now the value proposition has flipped.
• 34:09
  Speaker 3: It's access not to publics, but it's to privates, and
• 34:12
  Speaker 3: it's spending an income not in your retirement, but in
• 34:15
  Speaker 3: your entire life for your entire life in terms of
• 34:18
  Speaker 3: managing that lifestyle. So these are things that we've done
• 34:21
  Speaker 3: from the very beginning because there would never would have
• 34:23
  Speaker 3: been a dollar to invest if I didn't control the
• 34:26
  Speaker 3: cash flow.
• 34:27
  Speaker 2: Huh really really fascinating. You talk about you're dealing with
• 34:32
  Speaker 2: younger people, and especially with athletes. We'll get to college
• 34:36
  Speaker 2: athletes in a little bit. How do you get a
• 34:40
  Speaker 2: young person to understand that owner mentality, both from a
• 34:45
  Speaker 2: risk perspective, from a compounding perspective, especially in today that
• 34:53
  Speaker 2: they're always connected, there's so much stuff going on and
• 34:56
  Speaker 2: so much speculative distractions. How do you them to think
• 35:00
  Speaker 2: like an owner and not like a you know, a
• 35:04
  Speaker 2: simple player.
• 35:04
  Speaker 3: Day by day like day by day? Really, yeah, and
• 35:07
  Speaker 3: it's it's it's a long game. There's no level of
• 35:11
  Speaker 3: like putting a Monte Carlo analysis in front of someone
• 35:13
  Speaker 3: and showing them, uh, you know, twenty thirty forty years
• 35:17
  Speaker 3: out from of what the compounding effect could be is
• 35:20
  Speaker 3: it looks looks nice, but it's just there's behaviors and
• 35:24
  Speaker 3: discipline that have to be created day by day, month
• 35:27
  Speaker 3: by month over time. But if you gamify it, it works.
• 35:30
  Speaker 3: And that's that's the that's the that's the aspect of
• 35:32
  Speaker 3: putting the scoreboard up of level of are you winning
• 35:36
  Speaker 3: or losing each month? And the one thing with with
• 35:39
  Speaker 3: if you look at contracts today in sports and how
• 35:41
  Speaker 3: big they are, as you know, with anything with great
• 35:44
  Speaker 3: abundance typically comes less disciplined. Right. You see a lot
• 35:48
  Speaker 3: of people with great talent, but they don't necessarily work
• 35:50
  Speaker 3: that hard. But if you work hard and you have talent,
• 35:54
  Speaker 3: it's tough to be. Yeah, it's almost almost difficult. It's
• 35:57
  Speaker 3: impossible to be. And so that's that became my investment philosophy.
• 36:03
  Speaker 3: When with even with young people or old people is
• 36:06
  Speaker 3: older when you think about the laws of physics versus
• 36:11
  Speaker 3: the laws of finance, Okay, and we think about this
• 36:14
  Speaker 3: abundance laws of physics say I'm trying to cross the creek.
• 36:19
  Speaker 3: There's a log that I'm going to walk on. If
• 36:21
  Speaker 3: I take my eye off that log, there's instant feedback.
• 36:24
  Speaker 3: I'm going to fall in the water. Right. If the
• 36:27
  Speaker 3: laws of finance say if there's if I have abundance
• 36:30
  Speaker 3: of money going out of my life and i'm and
• 36:33
  Speaker 3: if I take my eye off my money, nothing happens.
• 36:37
  Speaker 3: There's no immediate feedback. American Express doesn't call but call
• 36:40
  Speaker 3: and say, hey, if I'm paying my bills for a month,
• 36:43
  Speaker 3: slow down, Like you just spent fifty five thousand dollars
• 36:45
  Speaker 3: this month, slow down. No, they're giving you more benefits, right,
• 36:49
  Speaker 3: And so the laws of finance give you no immediate feedback.
• 36:53
  Speaker 3: And so the philosophy has to be creating a standard
• 36:58
  Speaker 3: of what you're going to focus on in It could
• 37:00
  Speaker 3: be a month from now, let's just win this month,
• 37:03
  Speaker 3: and then that's win the next six months, and all
• 37:05
  Speaker 3: of a sudden, now we're winning for years. But that's
• 37:08
  Speaker 3: until you become aware of that, most people don't have
• 37:11
  Speaker 3: success in it.
• 37:12
  Speaker 2: Fascinating stuff coming up. We continue our conversation with Joe McLean,
• 37:17
  Speaker 2: managing partner at MAI Capital discussing what it's like to
• 37:21
  Speaker 2: advise athletes and entertainers on their finances. I'm Barry Ridalts.
• 37:27
  Speaker 2: You're listening to Master's in Business on Bloomberg Radio. I'm
• 37:43
  Speaker 2: Barry Ridults. You're listening to Masters in Business on Bloomberg Radio.
• 37:47
  Speaker 2: My extra special guest is Joe McLean. He is the
• 37:50
  Speaker 2: managing partner at MAI Capital, where he has helped build
• 37:54
  Speaker 2: not only the firm's family office group, but the Sports
• 37:58
  Speaker 2: and Entertainment division, serving hundreds of professional athletes and entertainers.
• 38:04
  Speaker 2: So that sounds like a very, very fascinating group of
• 38:10
  Speaker 2: people to work with. I want to start by thinking
• 38:14
  Speaker 2: about what's going on at the college level, name, image, likeness.
• 38:21
  Speaker 2: This has become a giant business. Suddenly you have seventeen
• 38:25
  Speaker 2: and eighteen year old phenomens with potentially seven figure contracts.
• 38:31
  Speaker 2: What's it like having a conversation with a suddenly wealthy
• 38:35
  Speaker 2: eighteen year old.
• 38:36
  Speaker 3: And by the way, it's in high school now too,
• 38:38
  Speaker 3: so there's people were getting sponsorships in high.
• 38:41
  Speaker 2: School, so it's a sixteen year old.
• 38:46
  Speaker 3: You know what's interesting is I had I was blessed
• 38:49
  Speaker 3: with four years of coach Liutolson at the University Arizona
• 38:52
  Speaker 3: and had an extraordinary network of alumni and teammates that
• 38:56
  Speaker 3: I got to know or were also coached by him.
• 38:59
  Speaker 3: I see this. I see the benefit of staying for
• 39:03
  Speaker 3: four years for you know, not jumping around school to school.
• 39:08
  Speaker 3: And so at the same time, I'm trying to not
• 39:11
  Speaker 3: sound like I'm fifty two years old and say back
• 39:13
  Speaker 3: in the good old days, this is what we did,
• 39:15
  Speaker 3: because you know, we weren't getting contracts offered to us
• 39:20
  Speaker 3: for a million four I just looked at a There
• 39:22
  Speaker 3: are research services out there for each of these sports,
• 39:24
  Speaker 3: and I just looked at one for a player, and
• 39:28
  Speaker 3: they average five point six points a game this year,
• 39:31
  Speaker 3: but they're projected to have success. They're going to get
• 39:34
  Speaker 3: one point eight million dollars next year to go play
• 39:36
  Speaker 3: as a sophomore in college. Wow, right, And that's that's extraordinary.
• 39:40
  Speaker 3: And so how do you pass up going to another
• 39:42
  Speaker 3: school for those types of things? So it's really getting
• 39:45
  Speaker 3: them to sit down and think about some things that
• 39:48
  Speaker 3: are important besides money, their college experience. Who's the coach
• 39:52
  Speaker 3: that you're going to be coaching for. Does that match
• 39:54
  Speaker 3: to style that you that you think you could have
• 39:56
  Speaker 3: success in then outside the financial advice required that hey,
• 40:00
  Speaker 3: you're now a ten ninety nine contractor. There's no taxes
• 40:03
  Speaker 3: taken out of these deals, right, and so you can't
• 40:06
  Speaker 3: just spend one hundred percent of it. You owe money
• 40:08
  Speaker 3: to the government, and so that becomes that whole lesson
• 40:10
  Speaker 3: of gross versus net, and then this setting up some success.
• 40:15
  Speaker 3: The good news can be that they're learning these life
• 40:19
  Speaker 3: lessons before they become a pro. Right and because what
• 40:22
  Speaker 3: we also remind them is that every NBA, NFL scout
• 40:25
  Speaker 3: is watching how you're reacting to this money. Now, if
• 40:28
  Speaker 3: you get a million dollars and you go buy a Ferrari,
• 40:31
  Speaker 3: which happens, they're going to put that on their board
• 40:35
  Speaker 3: that this is someone that may not be responsible when
• 40:38
  Speaker 3: we give them ten million dollars. And so they're getting
• 40:41
  Speaker 3: into a window into the human being as to how
• 40:44
  Speaker 3: they may react once they turn pro. And so these
• 40:48
  Speaker 3: are all conversations we're just having much much earlier. But
• 40:52
  Speaker 3: I think it could be a good thing long term.
• 40:54
  Speaker 3: I know, as a college sports fan, e everybody's like,
• 40:56
  Speaker 3: I don't like these portals, and I agree with them.
• 40:59
  Speaker 3: But as a young person with opportunities, they're going to
• 41:02
  Speaker 3: be smarter, They're going to want to learn faster, and
• 41:05
  Speaker 3: there will be more successful outcomes than less.
• 41:08
  Speaker 2: Huh. That's really that's really fascinating. The obvious things that
• 41:13
  Speaker 2: are potential minefields, they seem to be getting good advice
• 41:18
  Speaker 2: and avoiding. And it sounds like a lot of the
• 41:21
  Speaker 2: college athletes that are getting big paydays are making most
• 41:26
  Speaker 2: of them are making better decisions than poor ones. Is
• 41:29
  Speaker 2: that I think?
• 41:30
  Speaker 3: So it's a And by the way, guys, I think
• 41:32
  Speaker 3: you know, ninety percent of these nils are all probably
• 41:35
  Speaker 3: one hundred thousand dollars or less or like they're much
• 41:38
  Speaker 3: they're much smaller, and that's bout one hundreds a lot,
• 41:40
  Speaker 3: but there's much smaller deals. It's reminding if they don't
• 41:44
  Speaker 3: have a base around them of that professional locker room
• 41:48
  Speaker 3: that we talk about, reminding them first and foremost, the
• 41:52
  Speaker 3: number one priority is to be a great teammate, because
• 41:55
  Speaker 3: we've seen the scenarios where the quarterback makes two million dollars, uh,
• 41:59
  Speaker 3: and it's disrespectful in the locker room and now all
• 42:01
  Speaker 3: of a sudden, nobody's blocking for you. That will happen.
• 42:05
  Speaker 3: So you've got to be scored in the super Bowl. This
• 42:07
  Speaker 3: year exactly. So if you don't, if you don't think
• 42:11
  Speaker 3: through those types of things and be aware of it,
• 42:14
  Speaker 3: and even like you know, you maybe wanted to be
• 42:16
  Speaker 3: contributed to community and create, you know, create a donor
• 42:18
  Speaker 3: advice fund with some of this money and give it
• 42:20
  Speaker 3: away and bring bring awareness to what your brand is,
• 42:23
  Speaker 3: because your brand really is not you know, what your
• 42:27
  Speaker 3: social followers are. It's being a great teammate, being a
• 42:30
  Speaker 3: great human being responsible. You know, you can have all
• 42:34
  Speaker 3: these extraordinary experiences and say the NCAA tournament, but if
• 42:37
  Speaker 3: you're a knucklehead off the court or off the fields,
• 42:40
  Speaker 3: there's gonna be consequences to it earlier.
• 42:42
  Speaker 2: So so let's now move into the pros. But we're
• 42:45
  Speaker 2: not talking about fifty two year olds in basketball, your
• 42:49
  Speaker 2: twenty three, twenty four, twenty five, early in your career.
• 42:54
  Speaker 2: I'm curious about a couple of things. The first thing
• 42:57
  Speaker 2: is you have a day like last week where the
• 43:00
  Speaker 2: market's melting down. A twenty five year old guy and
• 43:04
  Speaker 2: his first year of a second contract calls up and says, hey,
• 43:09
  Speaker 2: we okay, Like, how do you manage clients who are
• 43:13
  Speaker 2: perhaps a little freaked out by the newsflow?
• 43:16
  Speaker 3: So I think over over time. For me, the benefit
• 43:18
  Speaker 3: has been introducing them to other people besides myself want
• 43:22
  Speaker 3: for most and foremost, other professionals and the markets and
• 43:25
  Speaker 3: other asset classes that they can get on the phone
• 43:28
  Speaker 3: with and understand really what the facts of the case
• 43:31
  Speaker 3: are versus the noise around it. And typically every scoreboard
• 43:35
  Speaker 3: we have is projected out through their entire contract. So
• 43:38
  Speaker 3: what are the things that we can control versus the
• 43:40
  Speaker 3: things that we can't control? So as I always go
• 43:42
  Speaker 3: back to that, yes, the market's down, let's say it's
• 43:45
  Speaker 3: down ten percent. You know, what are the things we
• 43:47
  Speaker 3: can control right now? Well, we can control our spending,
• 43:50
  Speaker 3: in our decision making and our attitude, and so those
• 43:53
  Speaker 3: may be opportunities where let's look at our spending, maybe
• 43:56
  Speaker 3: we dial it back so that we may want to
• 43:58
  Speaker 3: invest more over time, and it's opportunistic. These are all
• 44:02
  Speaker 3: very rational things that as you know, most humans become
• 44:06
  Speaker 3: very irrational. And the more I've learned, the more I
• 44:10
  Speaker 3: can get someone to talk about their emotions, then they
• 44:13
  Speaker 3: moved to a more rational state. So it's just talking
• 44:15
  Speaker 3: out loud. Let's talk through this. A lot of these
• 44:18
  Speaker 3: a lot of these athletes over the last couple of years.
• 44:19
  Speaker 3: Really haven't been through a major, major market.
• 44:23
  Speaker 2: Fifteen years of bull market.
• 44:25
  Speaker 3: It was really bad. I mean I remember early days.
• 44:29
  Speaker 3: This happened and I had one player liquidated all their
• 44:32
  Speaker 3: five twenty nine plans because the market was down fifteen percent.
• 44:36
  Speaker 3: And that was obviously you know the mistakes that that,
• 44:39
  Speaker 3: you know the consequences of that. But if you don't
• 44:42
  Speaker 3: go through it, I was. I was a benefactor of
• 44:46
  Speaker 3: losing all of my hard earned money in Europe in
• 44:50
  Speaker 3: two thousand. So I was investing in mutual funds at
• 44:54
  Speaker 3: ten dollars that went to one hundred dollars in these
• 44:56
  Speaker 3: biotech funds, and then March of two thousand everything went
• 45:00
  Speaker 3: to zero. So it was a lesson. I learned early
• 45:03
  Speaker 3: not to be have concentrated I'll be all in and
• 45:07
  Speaker 3: one asset class. So most of the clients are fairly diversified.
• 45:11
  Speaker 2: So let's hold the twenty three to twenty four year
• 45:13
  Speaker 2: old aside and talk about a twenty five twenty six
• 45:17
  Speaker 2: year old with a max contract their second contract. You
• 45:22
  Speaker 2: don't think of a twenty six year old as a
• 45:25
  Speaker 2: potential family office client, but essentially at that level of income,
• 45:32
  Speaker 2: that level of wealth kind of makes sense. Is this
• 45:36
  Speaker 2: the right model for those athletes, for those professionals.
• 45:41
  Speaker 3: One hundred percent. So if you think about what you're describing,
• 45:44
  Speaker 3: a twenty five twenty six year old on a max
• 45:46
  Speaker 3: contract is probably making over forty million dollars a year.
• 45:51
  Speaker 3: It's just talk through a couple of things that are happening.
• 45:54
  Speaker 3: It's a guaranteed contract if you're in basketball or baseball,
• 45:58
  Speaker 3: even hockey to that extent, it's not guaranteed for death,
• 46:02
  Speaker 3: right right, So there's only it is for injury up
• 46:05
  Speaker 3: to it is for injury, but not for death. So
• 46:07
  Speaker 3: then there's there's a life insurance planning. That's element where
• 46:11
  Speaker 3: both the team's trying to get the coverage on that
• 46:13
  Speaker 3: person and for their first thirty million, and then you're
• 46:17
  Speaker 3: trying to get coverage. And if you're a big if
• 46:19
  Speaker 3: you have big endorsements, there's other Coca Colas and all
• 46:22
  Speaker 3: these other gatorades are all trying to get coverage on
• 46:24
  Speaker 3: you as well to protect there. So it's there's a
• 46:26
  Speaker 3: level of sophistication that they've got to start thinking through
• 46:28
  Speaker 3: from a risk management standpoint. Again, back to now the
• 46:33
  Speaker 3: three it's the three buckets still remain for the rest
• 46:35
  Speaker 3: of their life, so you got to keep filling them.
• 46:38
  Speaker 3: But now it's this gets complicated, it's you do what's
• 46:43
  Speaker 3: the goal here with this money? Is it just to
• 46:45
  Speaker 3: save it and sit on it? Or now they're getting
• 46:49
  Speaker 3: access to really interesting opportunities they want they want to
• 46:52
  Speaker 3: maybe own a team someday.
• 46:54
  Speaker 2: So this is the third bucket, right.
• 46:56
  Speaker 3: And this is the entrepreneurial one where you've got to
• 46:58
  Speaker 3: keep filling the first two and always know what it
• 47:00
  Speaker 3: costs to be you? That's always January one. Do you
• 47:03
  Speaker 3: know what it costs to be you? And how do
• 47:05
  Speaker 3: we make it cost a little less to be you
• 47:07
  Speaker 3: if we can be smart with some of the savings
• 47:10
  Speaker 3: and all act areas. So what do we want it
• 47:13
  Speaker 3: to be cost to be you when this contract's over? Right,
• 47:16
  Speaker 3: it's again back to that burn rate of how much
• 47:19
  Speaker 3: you're going to spend in retirement because I'm assuming you're
• 47:21
  Speaker 3: never getting another deal, right, So is it two million
• 47:24
  Speaker 3: dollars a year? Is it a million and a half?
• 47:26
  Speaker 3: What is that number that we think you could live comfortably?
• 47:29
  Speaker 3: And obviously this is your thirty five years old. This
• 47:33
  Speaker 3: money has to last much, much, much much longer, and
• 47:36
  Speaker 3: so just going through that level of planning and giving
• 47:38
  Speaker 3: them information so they can make better choices. But that
• 47:41
  Speaker 3: is when this entrepreneur bracket really kicks in. They've established
• 47:45
  Speaker 3: a brand as a great player. Performance is the number
• 47:48
  Speaker 3: one factor of their success financially. However, now there's an
• 47:53
  Speaker 3: opportunity to really develop something that could be sustainable for
• 47:56
  Speaker 3: thirty forty years as an entrepreneur. And that's where we
• 47:59
  Speaker 3: start identifying what philosophy they want to have, and that's
• 48:02
  Speaker 3: that sector.
• 48:03
  Speaker 2: So you mentioned death or injury. I'm curious as to
• 48:07
  Speaker 2: your take on what are the most or the least
• 48:11
  Speaker 2: appreciated risks on a modern team roster. Is it we
• 48:17
  Speaker 2: mentioned injuries? Is it lifestyle creep? Is that that entourage
• 48:22
  Speaker 2: that could be a bad influence? Deal flows in the DMS?
• 48:26
  Speaker 2: Is a line I saw that cracked me up. What
• 48:29
  Speaker 2: do you think is just bad mojo that potentially derails
• 48:34
  Speaker 2: a client?
• 48:35
  Speaker 3: Well, a couple of things you mentioned risk an injury.
• 48:38
  Speaker 3: You cannot avoid this and so there's a there is
• 48:40
  Speaker 3: a way to protect yourself over time. So it's now
• 48:43
  Speaker 3: at this point, at this level of wealth, at the
• 48:46
  Speaker 3: size of these contracts, you have to have your own doctors.
• 48:49
  Speaker 3: You have to have your own trainers. You have to
• 48:50
  Speaker 3: get information that comes directly to you, not through the
• 48:54
  Speaker 3: team to you.
• 48:55
  Speaker 2: So we're talking nutritionists, trainers, physical therapists, sage therapists like
• 49:01
  Speaker 2: straight down the line.
• 49:02
  Speaker 3: And they will all have to report to the client,
• 49:05
  Speaker 3: not to the team. So the team has these has
• 49:07
  Speaker 3: these people and they're great people. However they work for
• 49:11
  Speaker 3: the team, right, And so we've had situations where clients
• 49:15
  Speaker 3: have gotten injections and it's killed carlage in their hip,
• 49:18
  Speaker 3: and it's erode it over time, and all of a sudden,
• 49:20
  Speaker 3: now they're in a situation where they may not get
• 49:22
  Speaker 3: the next deal. So it's at this max contract someone
• 49:26
  Speaker 3: so they're going to be spending somewhere between four hundred
• 49:28
  Speaker 3: thousand and a million dollars a year into their body.
• 49:32
  Speaker 2: Wow, that's unbelievable.
• 49:33
  Speaker 3: And it's but if you think about what the benefit
• 49:36
  Speaker 3: of that. People players are playing thirty five forty and look.
• 49:41
  Speaker 2: At Tom Brady. You had no business playing into his
• 49:43
  Speaker 2: forties and playing fairly well. That has to be the
• 49:47
  Speaker 2: result of all that, all that self.
• 49:49
  Speaker 3: Investment, no doubt. And that's so that's and so there's
• 49:51
  Speaker 3: a there's a track record there that others can turn
• 49:55
  Speaker 3: to Lebron James also being one of them, that it's
• 49:59
  Speaker 3: they see the value in that investment and they also
• 50:01
  Speaker 3: see the risk of not investing in that right. So
• 50:04
  Speaker 3: it's I've had these discussions on the first contract when
• 50:07
  Speaker 3: I look at because I see the personal p and
• 50:09
  Speaker 3: L on everybody when we're paying all their bills, and
• 50:12
  Speaker 3: I could see, are we really still going to McDonald's
• 50:16
  Speaker 3: like you're you're you're a crushing fast food constantly.
• 50:19
  Speaker 2: You what a twenty three? Aren't you kind of a mortal?
• 50:22
  Speaker 2: How do you get someone who's been the biggest, fastest,
• 50:25
  Speaker 2: strongest guy everywhere he went to realize, hey, this is
• 50:30
  Speaker 2: a rusty big of bolts if you don't take care
• 50:33
  Speaker 2: of it. How do you get a twenty two year
• 50:35
  Speaker 2: old to understand you're not a mortal?
• 50:38
  Speaker 3: You show them that. If you're in the NBA and
• 50:42
  Speaker 3: you're a draft pick today and you get to your
• 50:44
  Speaker 3: fourth contract, assuming a five percent growth rate of of
• 50:50
  Speaker 3: of the salary cap, you will have grossed a billion
• 50:53
  Speaker 3: dollars in contract value.
• 50:54
  Speaker 2: Get out of here.
• 50:55
  Speaker 3: That's billion. So so what are what are the things
• 50:59
  Speaker 3: you and do now to just be around in your
• 51:02
  Speaker 3: fourth deal? Right. It obviously extends beyond just being a
• 51:05
  Speaker 3: three years deals or longer three between three and four
• 51:09
  Speaker 3: year deals. Yeah, so if you're twenty one, by the
• 51:13
  Speaker 3: time you're thirty one to thirty three, depending on your
• 51:17
  Speaker 3: cycle of your contracts, you could have grossed a billion dollars.
• 51:20
  Speaker 3: That's where Cooper Flags of the world are trending towards.
• 51:23
  Speaker 3: Jalen Rose, Jason Tatum, that's where they're trending.
• 51:26
  Speaker 1: Wow.
• 51:27
  Speaker 2: I was courtsied for the Laker game against the next
• 51:32
  Speaker 2: last year and what is Lebron thirty eight? He was
• 51:37
  Speaker 2: last year? He is amazing. He is just a fortunate
• 51:42
  Speaker 2: force of nature. And that doesn't happen by dumb luck.
• 51:46
  Speaker 2: That looks like it's a lot of work.
• 51:47
  Speaker 3: And my legs were tired in the fourth quarter when
• 51:50
  Speaker 3: I was twenty one years old.
• 51:53
  Speaker 2: Faster than everybody out there other than maybe one of
• 51:56
  Speaker 2: the point guards. And he's a mond. When he's in
• 52:01
  Speaker 2: the paints, you are not stepping in front. You're not
• 52:04
  Speaker 2: taking that charge. Wake up next Tuesday.
• 52:07
  Speaker 3: The old school guards, back in the day, they would
• 52:09
  Speaker 3: play their way into shape the first twenty games right
• 52:12
  Speaker 3: as they were. Lord knows what they did all summer
• 52:14
  Speaker 3: there's the athlete. Summers now are just as physical and
• 52:18
  Speaker 3: difficult as the seasons in terms of preparation.
• 52:21
  Speaker 2: Huh, that's fascinating. There's a quote of yours. I really like.
• 52:26
  Speaker 2: The number one trait of a great advisor is being
• 52:29
  Speaker 2: willing to get fired. Give us an example of what
• 52:34
  Speaker 2: leads someone to get fired when you're delivering the cold,
• 52:38
  Speaker 2: hard truth.
• 52:40
  Speaker 3: Let me give you one where I almost got fired first, okay, okay,
• 52:43
  Speaker 3: And this was one of my most important clients of
• 52:46
  Speaker 3: the history of my career, and I thought I was
• 52:49
  Speaker 3: doing the right things, and I still today I think
• 52:52
  Speaker 3: I was, but I was doing it the wrong way.
• 52:54
  Speaker 3: So this was a situation where the client was just
• 52:58
  Speaker 3: there was a bunch of knuckleheads surrounding them. They were
• 53:00
  Speaker 3: going to really affect that person's brand of the off
• 53:03
  Speaker 3: the Quarridor field, and it was really starting to irritate me.
• 53:06
  Speaker 3: And so I decided to take it in my own
• 53:08
  Speaker 3: hands and address that personally with them, with with the
• 53:12
  Speaker 3: friends and with the family members, and I kind of
• 53:14
  Speaker 3: I got into everyone's face and I was ready to
• 53:16
  Speaker 3: take them down because I and I look at doing
• 53:19
  Speaker 3: trust planning for a client, I know who they love,
• 53:22
  Speaker 3: and that's who that's who's in the trust literally and
• 53:26
  Speaker 3: who we're going to take care of financially, and the
• 53:28
  Speaker 3: ones that are outside the circle. And most of them
• 53:29
  Speaker 3: were outside the circle, and they were really affecting this individual.
• 53:33
  Speaker 3: So I was going to take try to take them out,
• 53:36
  Speaker 3: but do it verbally. And so I addressed it, and
• 53:38
  Speaker 3: all of a sudden I got called to the table
• 53:43
  Speaker 3: for a meeting with the client, and uh, and they
• 53:47
  Speaker 3: they came at me and said, don't you ever just
• 53:50
  Speaker 3: you know, come at my friends and this and that
• 53:52
  Speaker 3: and and if you if this ever happens again, we're
• 53:55
  Speaker 3: never going to work together again. And that for me,
• 53:57
  Speaker 3: this is the first time we're having some conflict. And
• 54:00
  Speaker 3: I was ready for it, and I was excited to
• 54:03
  Speaker 3: have this conversation because that's let's get real about what's happening.
• 54:06
  Speaker 3: And even when you don't know what's happening, but the
• 54:09
  Speaker 3: but the person was shutting down more and more. They
• 54:12
  Speaker 3: weren't ready for conflict. And so if you're going to
• 54:15
  Speaker 3: say a great advisor is willing to get fired, you
• 54:20
  Speaker 3: also have to prepare your clients for conflict, healthy conflict.
• 54:25
  Speaker 3: And so I realized I never prepared to have this
• 54:27
  Speaker 3: conversation with someone that I'm gonna we're gonna, you know,
• 54:30
  Speaker 3: be brutally honest with each other. And so the two
• 54:32
  Speaker 3: traits I found that you have to have is to
• 54:37
  Speaker 3: have this great professional conflict, is you have to have
• 54:41
  Speaker 3: mutual respect and you have to have compromises, and you
• 54:45
  Speaker 3: have to take these conversations at advance. So now I have
• 54:47
  Speaker 3: them in advance, like, hey, there's gonna be time where
• 54:49
  Speaker 3: we disagree, uh, and I'm I'm because I'm never going
• 54:52
  Speaker 3: to give you know, blow smoke. You have tons of
• 54:54
  Speaker 3: yes people in your life, right right, but I'm never
• 54:56
  Speaker 3: going to disrespect you. So don't disrespect me. And at
• 54:59
  Speaker 3: some point I'm gonna win, and sometimes you're gonna win
• 55:01
  Speaker 3: in terms of a level of compromise. If I would
• 55:03
  Speaker 3: have had that, I think this would have gone better.
• 55:06
  Speaker 3: It did not. It went really bad, and we were
• 55:09
  Speaker 3: able to repair it over time. And I've had situations
• 55:13
  Speaker 3: unfortunately where I just weren't maybe I didn't get the
• 55:17
  Speaker 3: client early enough to create behaviors. Gambling, mental health, all
• 55:24
  Speaker 3: these aspects that are all over life and in the
• 55:26
  Speaker 3: world are highly They're all over sports too, and there's
• 55:30
  Speaker 3: just some people you just can't can't save and so
• 55:34
  Speaker 3: those are some unfortunate situations where we did have to
• 55:36
  Speaker 3: fire somebody.
• 55:37
  Speaker 2: So that raised a really interesting question. Everybody walks around
• 55:41
  Speaker 2: with these devices, and these devices are everything from social media,
• 55:46
  Speaker 2: which can be a minefield, to all of the gambling
• 55:52
  Speaker 2: acts and apps. And even if you're not touching the
• 55:56
  Speaker 2: DraftKings between Kylshi and Polymar or robin Hood, you could
• 56:02
  Speaker 2: speculate gamble, just go down a rabbit hole for someone
• 56:07
  Speaker 2: with a lot of cash burning hole in their pocket
• 56:09
  Speaker 2: could be really dangerous. This always connected, always on world.
• 56:14
  Speaker 2: What sort of of advice are you giving clients who
• 56:18
  Speaker 2: you know have these seven and eight figure contracts?
• 56:22
  Speaker 3: Uh? Those are those are the ones where you use
• 56:24
  Speaker 3: a little bit of fear and start sharing some stories
• 56:27
  Speaker 3: that have happened to others and you know, potentially getting
• 56:30
  Speaker 3: black balled you. That's that's even investing or betting on
• 56:34
  Speaker 3: your own sport, but just even getting anywhere near attached
• 56:38
  Speaker 3: to it is something that could affect the growing wealth
• 56:42
  Speaker 3: that you could create over time. I get there's a
• 56:44
  Speaker 3: level of scare as you can scare them with that,
• 56:46
  Speaker 3: and for all of us, it's not gambling in sports
• 56:50
  Speaker 3: and the amount of revenue. I don't think it's a
• 56:52
  Speaker 3: great It really isn't a great thing.
• 56:55
  Speaker 2: I know, it's pretty awful. And you have a whole
• 56:57
  Speaker 2: generation of young, mostly mails, that have become gambling problems
• 57:04
  Speaker 2: addicted to it. Does fear really work in that, Hey,
• 57:08
  Speaker 2: you're risking a billion dollars against ye fooling around with
• 57:12
  Speaker 2: ten or twenty thousand dollars. It doesn't make any sense.
• 57:15
  Speaker 3: The scarier ones are in Vegas. When you go to
• 57:18
  Speaker 3: Vegas or you go some of the other casinos and
• 57:20
  Speaker 3: you learn the very first time up what a marker is.
• 57:23
  Speaker 3: And so what Vegas created with the markers is there's
• 57:27
  Speaker 3: no exchange of money, right, it's just signing your name.
• 57:31
  Speaker 3: And then inside that contract that also says that they
• 57:34
  Speaker 3: have they can reserve the right to go into your
• 57:36
  Speaker 3: bank account and take the funds if you don't pay up.
• 57:40
  Speaker 3: And so as you can imagine, when there's no exchange
• 57:42
  Speaker 3: of funds and you just sign your name and that's
• 57:46
  Speaker 3: a rabbit hole that you can go down, that's disastrous.
• 57:49
  Speaker 2: There have been studies that people who spend cash versus
• 57:52
  Speaker 2: credit cards. Credit card you're just swiping or tapping, you know,
• 57:56
  Speaker 2: it doesn't feel like you're spending money when you're counting
• 57:59
  Speaker 2: out hundreds to buy a watch or whatever. I can
• 58:02
  Speaker 2: imagine the mark in Vegas has to be really dangerous.
• 58:05
  Speaker 3: Even to that point, we've had clients where we've decided
• 58:08
  Speaker 3: to have them write every check, pay every single bill.
• 58:12
  Speaker 2: They feel it.
• 58:13
  Speaker 3: So it's you send the check book. You know here
• 58:15
  Speaker 3: it is. Now you have to sign it. You see
• 58:16
  Speaker 3: exactly how much you're paying for each of these transactions.
• 58:20
  Speaker 2: It works, I would say, I would imagine that's effective.
• 58:23
  Speaker 2: But that raises a really interesting question. So the economics
• 58:26
  Speaker 2: of being an elite athlete. I mean, you go back
• 58:30
  Speaker 2: to the sixties and seventies, the top of the team
• 58:34
  Speaker 2: roster really wasn't making a lot of money. Now across
• 58:38
  Speaker 2: the whole industry, it's big bucks and the top is,
• 58:42
  Speaker 2: you know, crazy big bucks. How has this changed the
• 58:44
  Speaker 2: way you think about asset allocation planning? Looking at everything
• 58:49
  Speaker 2: from you mentioned safe assets, divenends and bonds, to speculative
• 58:55
  Speaker 2: venture capital and privates, How has the world of athletic
• 59:00
  Speaker 2: finances changed over the course of your career.
• 59:04
  Speaker 3: You have to be the first thing that's changed the
• 59:06
  Speaker 3: most is you have to be sophisticated from day one. Right,
• 59:09
  Speaker 3: So if you think when I was getting into the
• 59:11
  Speaker 3: business in twenty and nine and ten, these contracts didn't exist,
• 59:15
  Speaker 3: and I was I knew enough to get clients in
• 59:17
  Speaker 3: the mutual funds and get them to save. It's these
• 59:19
  Speaker 3: contracts are very big, and they're they're they're early, and
• 59:22
  Speaker 3: they're coming fast. And so it's just from a level
• 59:25
  Speaker 3: of planning and understanding how to build this. You know
• 59:28
  Speaker 3: that one of our lessons is the next generation is watching, right,
• 59:31
  Speaker 3: and so what what what are the decisions that we
• 59:34
  Speaker 3: can make now that's set sets you up, not just
• 59:37
  Speaker 3: for yourself but the future. Right. We're not talking about
• 59:39
  Speaker 3: going broke anymore. This is one hundred year money. And
• 59:43
  Speaker 3: so that that level of estate planning and that exists
• 59:46
  Speaker 3: for a twenty two or twenty three year old now
• 59:48
  Speaker 3: versus that we never had that before. And so I
• 59:52
  Speaker 3: don't think the ascolocation needs to change. It's just that
• 59:55
  Speaker 3: entrepreneurial bucket will evolve over time. And so having that
• 1:00:00
  Speaker 3: level of getting someone with the founder mentality. I don't
• 1:00:04
  Speaker 3: know about you, but I love being a founder. Being
• 1:00:06
  Speaker 3: a CEO is not as fun. So I like I
• 1:00:10
  Speaker 3: like having them. People say, be the CEO of your money,
• 1:00:13
  Speaker 3: like I want you to be the founder of your money.
• 1:00:16
  Speaker 3: Like this is we don't want the shirt sleeves a
• 1:00:17
  Speaker 3: shirt sleeves metaphor that everybody talks about. Let's think about
• 1:00:21
  Speaker 3: that entrepreneurial bucket and where you think you could have
• 1:00:23
  Speaker 3: great impact. Some of them may say, I just want
• 1:00:26
  Speaker 3: to be a coach. I just want to coach my
• 1:00:28
  Speaker 3: high school team. Really, and I think that's great, and
• 1:00:30
  Speaker 3: that's it's.
• 1:00:31
  Speaker 2: Come out of the NBA to be a high school coach.
• 1:00:33
  Speaker 3: Correct, And that's I think that's that would be an
• 1:00:36
  Speaker 3: extraordinary gift back to the universe. As to as to
• 1:00:39
  Speaker 3: your you know, your mindset and what you what you
• 1:00:41
  Speaker 3: believe in and the gift back, it's important to have
• 1:00:46
  Speaker 3: fill your time right because that's so having more meetings
• 1:00:49
  Speaker 3: with people that are either executives or other coaches and
• 1:00:52
  Speaker 3: whatever your aspect is. You have to start thinking beginning
• 1:00:55
  Speaker 3: with the end in mind. You know, by the time
• 1:00:57
  Speaker 3: you're twenty five years old, even though you may play forty,
• 1:01:00
  Speaker 3: so that you can fall into that and make that
• 1:01:03
  Speaker 3: transition back to what we started with with the schedule,
• 1:01:05
  Speaker 3: the predictability, the accountability. You have that professional locker room
• 1:01:09
  Speaker 3: in life that is established for that third bucket.
• 1:01:13
  Speaker 2: So I'm seeing more and more of athletes getting involved
• 1:01:18
  Speaker 2: kind of across different sports. Michael Jordan now owns a
• 1:01:22
  Speaker 2: NASCAR team or as an investor in a NASCAR team,
• 1:01:26
  Speaker 2: and we see other athletes buying British soccer teams. How
• 1:01:31
  Speaker 2: do you think about sort of cross pollination from one
• 1:01:35
  Speaker 2: sport to another to another.
• 1:01:38
  Speaker 3: I think the common ground is just be be wary
• 1:01:42
  Speaker 3: of your time. You start spreading yourself. It's very easy
• 1:01:45
  Speaker 3: to look on social media and then you see someone
• 1:01:47
  Speaker 3: owns three or four different teams and they're in their
• 1:01:50
  Speaker 3: own sale GP and then they have a Formula one
• 1:01:53
  Speaker 3: race team and they all they're all limited partners in
• 1:01:55
  Speaker 3: these things. Right, It's it looks great, but just think
• 1:01:58
  Speaker 3: about how you want to spend your time, time and retirement.
• 1:02:00
  Speaker 3: Do you want to be spread out all over the
• 1:02:02
  Speaker 3: world and having you know, access to these things. Yes,
• 1:02:05
  Speaker 3: But at the same times you've got to go fulfill
• 1:02:07
  Speaker 3: You have an obligation to fulfill your time in these things.
• 1:02:10
  Speaker 3: And so part of it is like how do we
• 1:02:12
  Speaker 3: simplify your life. I'm reading now a book for the
• 1:02:17
  Speaker 3: second time, and I'm still not good at it. Called essentialism.
• 1:02:20
  Speaker 3: I think it's called essentialism, and that's that's the disciplined
• 1:02:24
  Speaker 3: pursuit of less because I have a ton of user
• 1:02:28
  Speaker 3: air in my life where I just say I help
• 1:02:31
  Speaker 3: clients say no, but I say yes too much to
• 1:02:34
  Speaker 3: to doing other things. And that's where we have to
• 1:02:37
  Speaker 3: remind Yes, you have a ton of access, but let's
• 1:02:40
  Speaker 3: be most careful of your time and where you want
• 1:02:42
  Speaker 3: to spend it. There there are there are opportunities, think
• 1:02:47
  Speaker 3: to own things, but to spread yourself out and be
• 1:02:52
  Speaker 3: all over the world and these soccer teams and all that.
• 1:02:54
  Speaker 3: It's an interesting it sounds interesting, but I don't think
• 1:02:57
  Speaker 3: it's effective.
• 1:02:58
  Speaker 2: So what do you think athlete investors are either not
• 1:03:02
  Speaker 2: thinking about or not talking about, what's a blind spot
• 1:03:06
  Speaker 2: that would be really useful for them to better understand
• 1:03:10
  Speaker 2: have greater awareness of.
• 1:03:12
  Speaker 3: Well, let me for a second, I'll I'll over generalize
• 1:03:17
  Speaker 3: what's happening. So we've in sports per se, so we
• 1:03:20
  Speaker 3: went from spending money on materialistic things to over investing
• 1:03:25
  Speaker 3: in private things. And so it's yes, it's great that
• 1:03:30
  Speaker 3: we're talking about how much we're saving, but it's also
• 1:03:32
  Speaker 3: like I invested in this deal, and I invested in
• 1:03:34
  Speaker 3: this deal, and I invested in this deal, and as
• 1:03:36
  Speaker 3: you know, like no one really understands risk and taken
• 1:03:38
  Speaker 3: too much and at that point you truly start evaluating
• 1:03:42
  Speaker 3: what that means. So I don't know if everybody understands yet.
• 1:03:46
  Speaker 3: As an investor, you know, all these things that we're
• 1:03:49
  Speaker 3: investing in privately, you don't know how much it's worth.
• 1:03:52
  Speaker 3: And so that's a significant blind spot for many. Back
• 1:03:57
  Speaker 3: to those mental traits that we all have as athlete,
• 1:04:00
  Speaker 3: that we're willing to bet on themselves. With you, that
• 1:04:02
  Speaker 3: there is no nothing that we're not going to take
• 1:04:04
  Speaker 3: risk on. That's not the trait that you want as
• 1:04:07
  Speaker 3: an investor. Again, it's reminding that we don't need to
• 1:04:10
  Speaker 3: take this type of risk. You know, some clients growth
• 1:04:13
  Speaker 3: buckets were just in beauty bonds for ten years until
• 1:04:17
  Speaker 3: they produced enough income to support your lifestyle. But it's
• 1:04:20
  Speaker 3: a significant blind spot right now that nobody really knows
• 1:04:23
  Speaker 3: what some of these things are worth. But it looks
• 1:04:25
  Speaker 3: good on paper.
• 1:04:27
  Speaker 2: You had to say the very least I have to
• 1:04:29
  Speaker 2: bring up your podcast, The pros Pro. Your first guest
• 1:04:33
  Speaker 2: was Eli Manning, is that right. First, what what what
• 1:04:37
  Speaker 2: is this podcast thing? What motivated you to go that way?
• 1:04:41
  Speaker 3: It's this new thing, it's just starting, it just came out.
• 1:04:44
  Speaker 2: And what do you want to accomplish by sitting down
• 1:04:46
  Speaker 2: with people like Eli Manning.
• 1:04:48
  Speaker 3: It's ah for me. I was just hoping it's a
• 1:04:51
  Speaker 3: gift to the to the next generation that's seeking information
• 1:04:56
  Speaker 3: and get some quality information. So it's we see now
• 1:04:59
  Speaker 3: in the NIL world where I'll have a young person
• 1:05:01
  Speaker 3: come to me and say, Hey, I play in Oregon,
• 1:05:05
  Speaker 3: but I'm going to set up my LLC in Texas
• 1:05:07
  Speaker 3: because I have an aunt there and because I read
• 1:05:09
  Speaker 3: this thing on Instagram where I could not pay any
• 1:05:12
  Speaker 3: state income taxes and so there's information out there and
• 1:05:16
  Speaker 3: it's just not right. And so this whole idea of
• 1:05:20
  Speaker 3: wanting each of these clients to be the person that
• 1:05:22
  Speaker 3: someone walks to in their locker room and asks a
• 1:05:25
  Speaker 3: bunch of questions of the pro I just want to
• 1:05:27
  Speaker 3: now interview a lot of these successful athletes that have
• 1:05:31
  Speaker 3: been through like Eli as an example, you know, had
• 1:05:34
  Speaker 3: to come in to New York and lead a city,
• 1:05:39
  Speaker 3: uh and have to understand the most important things to
• 1:05:41
  Speaker 3: build trust quickly with his teammates with his coaches, like
• 1:05:44
  Speaker 3: there's all these really built in athletic things are important.
• 1:05:47
  Speaker 3: And then he came into an extraordinary amount of wealth
• 1:05:48
  Speaker 3: and he had to manage it. And then for him,
• 1:05:50
  Speaker 3: it's learning how to give give money away the most effectively.
• 1:05:53
  Speaker 3: And so the more I can just extract information from
• 1:05:55
  Speaker 3: people that have been there and done that and just
• 1:05:57
  Speaker 3: share that with everybody, it's a testament to what these
• 1:06:01
  Speaker 3: individuals have done. But at the same time, you know,
• 1:06:04
  Speaker 3: we can all learn from them as well.
• 1:06:06
  Speaker 2: Creating a permanent record is so important because the half
• 1:06:09
  Speaker 2: life of financial literacy is so short. Like I have
• 1:06:14
  Speaker 2: had the same conversation like every three years, Like didn't
• 1:06:18
  Speaker 2: we talk about this in twenty twenty three? Yeah, but
• 1:06:22
  Speaker 2: I kinda forgot. So let's I only have you for
• 1:06:26
  Speaker 2: a few more minutes. Let's jump to our favorite questions
• 1:06:29
  Speaker 2: I ask all of my guests starting with you refer
• 1:06:33
  Speaker 2: to a few people, but let's let's put them in
• 1:06:35
  Speaker 2: one place. Who are your mentors who helped shape both
• 1:06:39
  Speaker 2: of your careers?
• 1:06:41
  Speaker 3: My mom, for sure, you know she she did whatever
• 1:06:45
  Speaker 3: it took to raise three boys and then put me
• 1:06:48
  Speaker 3: in there, put me in the right situation, to have
• 1:06:50
  Speaker 3: an opportunity to be around Ludelsen. You know, something that
• 1:06:53
  Speaker 3: coach did. One of the great gifts that Coach Olsen
• 1:06:56
  Speaker 3: gave us was he made us go and public do
• 1:06:59
  Speaker 3: public speaking at school. So we had to do sixth, seventh,
• 1:07:02
  Speaker 3: and eighth grade when we were a freshman, and then
• 1:07:05
  Speaker 3: sophomore year you get started working your way into high
• 1:07:07
  Speaker 3: school and by senior year you had to speak at
• 1:07:08
  Speaker 3: a high school graduation. But he brought in people to
• 1:07:11
  Speaker 3: teach you how to communicate effectively. I had no idea
• 1:07:15
  Speaker 3: the power of that over time once you get into
• 1:07:18
  Speaker 3: the work world, and the level of confidence it gives you. Well,
• 1:07:21
  Speaker 3: at the same time, always having a high level of humility.
• 1:07:24
  Speaker 3: That was a great gift outside of all the basketball stuff.
• 1:07:27
  Speaker 3: And being always being prepared, that was a great gift
• 1:07:30
  Speaker 3: he gave us. You know, Jim Escabido was an example
• 1:07:33
  Speaker 3: at Frankel Templeton who told me you don't know nothing
• 1:07:35
  Speaker 3: about nothing, which was great. And then as I began
• 1:07:39
  Speaker 3: to get into understanding the mindset effectively, having someone like
• 1:07:43
  Speaker 3: Ken Hayman who really re taught me Maso's hierarchy of
• 1:07:47
  Speaker 3: human needs in this level of safety and security, so
• 1:07:50
  Speaker 3: many humans are stuck in and if we can give
• 1:07:52
  Speaker 3: them a reason to say no to a lot of
• 1:07:55
  Speaker 3: things and the power of a plan to get them
• 1:07:57
  Speaker 3: to some level of a connection, whether it's a human
• 1:07:59
  Speaker 3: or professional. That was a great gift that he give me,
• 1:08:02
  Speaker 3: but gave me. But I've found now over time that
• 1:08:05
  Speaker 3: it's less just mentors and more just finding ambassadors for you,
• 1:08:11
  Speaker 3: Like I see it with my kids as an example
• 1:08:14
  Speaker 3: of I have a daughter didn't necessarily have great confidence
• 1:08:17
  Speaker 3: in her stuff athletically, and then just someone just took
• 1:08:20
  Speaker 3: extra time to say, you know, if you did this, this,
• 1:08:23
  Speaker 3: and this, I think you could be exceptional, and it's
• 1:08:25
  Speaker 3: like it and then they work with you, and it's
• 1:08:28
  Speaker 3: just finding more ambassadors. And that's just what I'm trying
• 1:08:30
  Speaker 3: to do as an advisor. Advisors to be an ambassador
• 1:08:32
  Speaker 3: on behalf of more clients. It's super powerful. It's not
• 1:08:36
  Speaker 3: necessarily a mentor relationship, but it's just I think the
• 1:08:39
  Speaker 3: greatest gift you can give somebody else is your belief
• 1:08:42
  Speaker 3: in them, even when they don't believe in themselves, huh.
• 1:08:46
  Speaker 3: And so that's the power of being an ambassador. I
• 1:08:49
  Speaker 3: think I highly recommend it for as many people as possible.
• 1:08:52
  Speaker 2: Let's talk about books. What are you reading right now?
• 1:08:54
  Speaker 2: What are some of your favorites. You mentioned a book earlier.
• 1:08:58
  Speaker 3: I want to Greg McNown I think it's as Yeah,
• 1:09:01
  Speaker 3: that's a great, that's a uh. That is a discipline,
• 1:09:04
  Speaker 3: pursuit of less and getting rid of some of the inefficiencies.
• 1:09:07
  Speaker 3: It's in everybody's life, and you could end up doing more.
• 1:09:10
  Speaker 3: I always my favorite book is always the one. Like
• 1:09:14
  Speaker 3: for me, it's whatever got you reading. I didn't read
• 1:09:18
  Speaker 3: in college. I did what I had to do to
• 1:09:20
  Speaker 3: get good grades and stay eligible. And my first book
• 1:09:24
  Speaker 3: ever read was John Grisham was the Firm, and it
• 1:09:27
  Speaker 3: was for me. It was it got me excited to
• 1:09:30
  Speaker 3: want to turn the page and and so. And now
• 1:09:33
  Speaker 3: I read as often and as much as I possibly can.
• 1:09:37
  Speaker 3: I just can't get enough of it. But I always
• 1:09:39
  Speaker 3: say for those that aren't reading, just read anything that
• 1:09:43
  Speaker 3: would excite. Could be a magazine, it could be a
• 1:09:46
  Speaker 3: comic strip. But whatever it gets you excited to start reading, start.
• 1:09:51
  Speaker 2: Let's talk about streaming. What are you either watching or
• 1:09:54
  Speaker 2: listening to? What keeps you occupied when you're traveling around
• 1:09:57
  Speaker 2: the country visiting various athletes.
• 1:10:00
  Speaker 3: Binging constantly on everything Netflix, and just watch Madison, which
• 1:10:04
  Speaker 3: was a great. Oh really so sad.
• 1:10:06
  Speaker 2: Well.
• 1:10:06
  Speaker 3: I don't give much away, but it's it's sad. I
• 1:10:09
  Speaker 3: like good cries on air I cry more on airplanes
• 1:10:12
  Speaker 3: than anywhere else.
• 1:10:14
  Speaker 2: If you watch Madison, I'm assuming you saw a landman
• 1:10:17
  Speaker 2: for sure.
• 1:10:18
  Speaker 3: Yeah.
• 1:10:18
  Speaker 2: Anything Tailor Shardon is extraordiny.
• 1:10:20
  Speaker 3: I don't know when he sleeps, and.
• 1:10:22
  Speaker 2: He's got another there's like a new show coming out
• 1:10:25
  Speaker 2: like this month. I'm just astonished how how productive he is.
• 1:10:31
  Speaker 2: Give us another. What else are you watch?
• 1:10:36
  Speaker 3: Oh my god, I can't even remember the one I'm
• 1:10:37
  Speaker 3: watching with my wife. We always have these rules where
• 1:10:40
  Speaker 3: we have to watch them together. We can say outside
• 1:10:43
  Speaker 3: saying one, there's one whether they're dating. Age is like
• 1:10:48
  Speaker 3: twenty year difference. I can't remember that one. It's I
• 1:10:52
  Speaker 3: became dumber every twenty minutes that I watch it. My
• 1:10:57
  Speaker 3: I rewatched West Wing and John Adams and Band of
• 1:11:00
  Speaker 3: Brothers probably twice. I'm in a loop.
• 1:11:03
  Speaker 2: So it's funny. I was. I don't remember what I
• 1:11:07
  Speaker 2: was doing when West Wing was on, but it wasn't
• 1:11:09
  Speaker 2: watching TV. And it's on my list of things to
• 1:11:13
  Speaker 2: go back and watch during the pandemic. We watched mad Men,
• 1:11:17
  Speaker 2: which I had never seen, and it's really amazing, amazing show.
• 1:11:22
  Speaker 2: Final two questions. What sort of advice would you give
• 1:11:26
  Speaker 2: to a recent college grad interested in either a career
• 1:11:32
  Speaker 2: as a professional athlete or working with professional athletes in
• 1:11:36
  Speaker 2: a financial capacity.
• 1:11:38
  Speaker 3: It does help to come with a sports background, However,
• 1:11:42
  Speaker 3: it's nowhere near the most important trait. The more you
• 1:11:46
  Speaker 3: can bring interesting experiences and knowledge to sports, the better.
• 1:11:50
  Speaker 3: That was the example of Moneyball and a bunch of
• 1:11:52
  Speaker 3: statistical sure nerds, you know, brought data to help drive
• 1:11:56
  Speaker 3: more opportunities in sports and be more effective. So you
• 1:11:59
  Speaker 3: can bring an outside perspective. However, I think whether it's
• 1:12:03
  Speaker 3: getting into sports or anywhere else, coming in with this
• 1:12:07
  Speaker 3: service mindset of nothing is beneath you. I did have
• 1:12:10
  Speaker 3: a situation one time where an honor student came in
• 1:12:12
  Speaker 3: as an early early job with us and said, hey,
• 1:12:15
  Speaker 3: I I've been paying bills and bookkeeping for clients for
• 1:12:18
  Speaker 3: the last six months, and I was an honor student
• 1:12:21
  Speaker 3: at such and such college, like this is beneath me,
• 1:12:23
  Speaker 3: and I'm saying, well, last week I was cleaning gutters
• 1:12:26
  Speaker 3: in a client's house because it was the first time
• 1:12:28
  Speaker 3: then being a homeowner, and we're trying to teach them
• 1:12:30
  Speaker 3: how to manage a home. Nothing's beneath you. So I
• 1:12:33
  Speaker 3: think if you just come in with built to serve,
• 1:12:35
  Speaker 3: with that service mindset, you're going to be successful in
• 1:12:38
  Speaker 3: anything that you do.
• 1:12:39
  Speaker 2: Huh. I love that answer. And our final question, what
• 1:12:43
  Speaker 2: do you know about the world of investing in wealth
• 1:12:45
  Speaker 2: management today? Might have been useful twenty five years ago
• 1:12:49
  Speaker 2: when you were first getting started.
• 1:12:52
  Speaker 3: I would have listened to what when a first job?
• 1:12:54
  Speaker 3: When Sir John Templeton at Franklin Templeton was giving us
• 1:12:58
  Speaker 3: some of these quotes like the forwards and investing is
• 1:13:01
  Speaker 3: this time it's different? You know? Bull markets are born
• 1:13:04
  Speaker 3: on pessimism, they grow on skepticism, they mature on optimism,
• 1:13:08
  Speaker 3: and they die on euphoria. I would have listened, maybe
• 1:13:12
  Speaker 3: because nothing's changed.
• 1:13:13
  Speaker 2: Uh.
• 1:13:14
  Speaker 3: And it's taken me a long time to have to
• 1:13:17
  Speaker 3: not have any fomo when it comes to investing, but
• 1:13:20
  Speaker 3: I'm there, and I would have listened to a lot
• 1:13:22
  Speaker 3: of his traits and quotes from back then because obviously
• 1:13:25
  Speaker 3: he had lived in before me. I just wish I
• 1:13:27
  Speaker 3: would have listened early days.
• 1:13:29
  Speaker 2: Huh. Joe really fascinating stuff. Thank you for being so
• 1:13:33
  Speaker 2: generous with your time. We have been speaking with Joe McClain.
• 1:13:37
  Speaker 2: He is managing partner at MAI Capital Management. If you
• 1:13:42
  Speaker 2: enjoy this conversation, well check out any of the previous
• 1:13:46
  Speaker 2: six hundred or so we've done over the past twelve years.
• 1:13:49
  Speaker 2: You can find those at iTunes, Spotify, Bloomberg, Apple Podcasts,
• 1:13:55
  Speaker 2: or wherever you get your favorite podcasts from. I would
• 1:14:00
  Speaker 2: be remiss if I didn't thank the Cracked team that
• 1:14:02
  Speaker 2: helps put these conversations together each week. My audio engineer
• 1:14:07
  Speaker 2: is Steve Gonzalez. Anna Luke is my producer. Sean Russo
• 1:14:12
  Speaker 2: is my researcher. I'm Barry Ritoltz. You've been listening to
• 1:14:16
  Speaker 2: Masters in Business on Bloomberg Radio.