Financial Advice Before The MLB Draft? The Pros and Cons | MLB Draft Podcast #11
With recent changes to the MLB draft payouts - do you need a financial advisor?
MLB Draft Podcast · Erik Averill, AWM Capital, Travis Chick
Audio is streamed directly from the publisher (media.transistor.fm) as published in their RSS feed. Play Podcasts does not host this file. Rights-holders can request removal through the copyright & takedown page.
Show Notes
Due to COVID-19, no matter what MLB draftees sign for – the maximum amount they will receive in the first calendar year is $100,000.
So, do you need a financial advisor?
After taxes and agent fees there can be as little as $30,000 left which will be used to live on. Nothing really left to invest. Seems like hiring a financial advisor can wait until next year.
If you’re only talking about investing, we agree.
However, are any of the following “financial decisions” important to your family?
- How much money is enough to forego/continue your college education?
- How is the signing bonus taxed?
- What strategies are available to minimize taxes?
- How to handle 1099 endorsement income?
- How to evaluate Team 401(k) options and individual retirement plans?
- Do you have that knowledge, skills and discipline for healthy money habits?
- How to protect your new net-worth from lawsuits and fraudsters?
If the answer is yes to any of these, that means you have a lot of work to do that has nothing to do with investing the money.
Most "financial advisors" reduce your life down to only the investments their company allows them to manage and charge on. Your expectation of a financial advisor should be that they should be able to provide advice on all your finances, not just on the investments that their company happens to sell.
You don’t need an investment broker, especially one that gives you hitting lessons. What you need is a Certified Financial Planner Professional who manages your entire net worth.
You’re making the most important financial decision. Don’t leave it to chance.
MLB Draft Podcast with Erik Averill, CPWA®, CFP ® and former MLB Pitcher, Travis Chick, CFP ®.
Episode Highlights
- New signing bonus structure (:36)
- When should you hire a CFP®? (2:35)
- College or pro? (4:01)
- The importance of qualified financial advice (4:34)
- What is an appropriate signing bonus number? (6:42)
- The value of human capital (7:27)
- Should you get qualified financial advice before the draft? (7:54)
- How to find an expert (9:28)
- Finding more resources on navigating the draft (13:03)
- Being proactive in your search (15:40)