OT: MCW The Smartest Young NBA Player Out There

[HakAttack]

Take your money out of T-Bills and put it all into Waffles, tasty Waffles with Lots of Syrup!

 

[kirbivore]

solid gold house

 

[dyedorange]

MCW's mom: smartest mom in the room.

 

[jncuse]

Let's compare his situation to Spazz Napier.

Who would have thought that he would have issues once he became a professional... Bazz was partying too hard and the Heat sent him down to the D-League

 

[Rocco]

Well if they just stick the money in Vanguard Index Funds they'll probably do well enough.

That worked out well in 2008.

 

[CusefanATL]

That worked out well in 2008.

How did it do by 2014?

 

[CusefanATL]

I know. My comment was intended more to suggest that you really, really have to try to screw it up if all of the sudden you get millions.

there are plenty of people who went "broke" doing "smart" things.

Derrick Coleman wanted to revitalize detroit. Lost almost everything.
Dan Gilbert wanted to revitalize detroit - making billions

Mark Brunell invested in Fla real estate and lost almost everything
Donald Trump invested in Fla real estate and makes billions

Not to mention when family gets involved, there are numerous cases of them "stealing" or doing "dumb" things with the money. Money also changes people and family members. When they get used to being on the "payroll" - its nearly impossible to take them off of that payroll with out serious issues.

MCW has 2 years of communications and rhetorical studies. Which is not to be confused with anything at Newhouse. I took a few CRS classes... it was 1 of the athlete majors. He is more than likely not equipped to handle money. He may not know the difference between a savings account that Bank of America offers at .007% interest and an online savings account with Ally that offers 0.85% - let alone the difference b/w fixed annuities, variable university life, term life, whole life, hedge funds, mutual funds, stocks, bonds, short, long, 12% financing on a mercedes, or a 5/1 arm mortgage.

he is going to need good help. especially when contract #2 comes into play.

 

[OttoinGrotto]

there are plenty of people who went "broke" doing "smart" things.

Derrick Coleman wanted to revitalize detroit. Lost almost everything.
Dan Gilbert wanted to revitalize detroit - making billions

Mark Brunell invested in Fla real estate and lost almost everything
Donald Trump invested in Fla real estate and makes billions

Not to mention when family gets involved, there are numerous cases of them "stealing" or doing "dumb" things with the money. Money also changes people and family members. When they get used to being on the "payroll" - its nearly impossible to take them off of that payroll with out serious issues.

MCW has 2 years of communications and rhetorical studies. Which is not to be confused with anything at Newhouse. I took a few CRS classes... it was 1 of the athlete majors. He is more than likely not equipped to handle money. He may not know the difference between a savings account that Bank of America offers at .007% interest and an online savings account with Ally that offers 0.85% - let alone the difference b/w fixed annuities, variable university life, term life, whole life, hedge funds, mutual funds, stocks, bonds, short, long, 12% financing on a mercedes, or a 5/1 arm mortgage.

he is going to need good help. especially when contract #2 comes into play.

It can be so much simpler than that. In the comparisons you mentioned, each of those people was trying to get their money to do more. For these athletes, given how many of them end up pissing it away, maybe the better course of action isn't investment. Maybe it's just having a budget. I mean, geez, even on a budget of 200,000 a year, MCW's first contract allows him to live very comfortably for like 60 years doing nothing but letting the cash sit. Now sure, that budget per year has less buying power at the tail end, but by then you can hopefully expect that there's been an accumulation of assets owned outright like real estate, cars, etc.

All of these athletes have some kind of financial advisor that's looking to make smart investments and grow their fortune. Given how broken or at least fragile that model is, my question is, why? So many of these guys end up broke. It's not because they didn't have enough cash on hand to be set up for life.

The paradox is that these guys would benefit if they're smart enough to say everyone's too stupid to touch their money.

 

[sufandu]

It can be so much simpler than that. In the comparisons you mentioned, each of those people was trying to get their money to do more. For these athletes, given how many of them end up pissing it away, maybe the better course of action isn't investment. Maybe it's just having a budget. I mean, geez, even on a budget of 200,000 a year, MCW's first contract allows him to live very comfortably for like 60 years doing nothing but letting the cash sit. Now sure, that budget per year has less buying power at the tail end, but by then you can hopefully expect that there's been an accumulation of assets owned outright like real estate, cars, etc.

All of these athletes have some kind of financial advisor that's looking to make smart investments and grow their fortune. Given how broken or at least fragile that model is, my question is, why? So many of these guys end up broke. It's not because they didn't have enough cash on hand to be set up for life.

The paradox is that these guys would benefit if they're smart enough to say everyone's too stupid to touch their money.

Yeah, it shouldn't be that hard for someone making his kind of money to be smart with investing. The key is finding someone that is an experienced financial advisor that caters to a variety of people not just celebrities or athletes. I'd want a guy that handles Bob Smith's 401K because if he can understand a normal middle class guy's risk while investing, he can make smart decisions with a millionaire's money. Like you already said, establish a conservative budget and stick to it. Combine that with a conservative investment strategy (no need to be aggressive with his income) and there's no reason to ever have any problems.

If middle class people can invest well enough to have a comfortable retirement on far less income, and that happens all of the time, it should be that much easier for someone in MCW's situation to do it.

I have a friend who's spouse died during surgery and received a multimillion dollar settlement from the hospital for negligence. The first thing she did was contact Dave Ramsey about hiring a respected financial advisor. By the way she and her family live, you'd never know she's a millionaire. They're comfortable, but they buy used cars instead of new, take advantage of sales at the grocery store, and her husband still works a blue collar 40+hour/week job. They don't live extravagantly, but they'll be set for life.

 

[Knicks411]

Klay Thompson is another one whose parents manage how he spends.

Hahahah pretty sure he was getting an "allowance" for a while. His Dad has been there before, so it was probably a smart move. I think now that he got maxed out he is probably on his own?

 

[CusefanATL]

Hahahah pretty sure he was getting an "allowance" for a while. His Dad has been there before, so it was probably a smart move. I think now that he got maxed out he is probably on his own?

IIRC, they came back after all the hoop-la and said they were kind of joking about the allowance.

 

[Rocco]

How did it do by 2014?

5 years worth of lost returns. Good money managers can navigate those storms.

 

[CusefanATL]

5 years worth of lost returns. Good money managers can navigate those storms.

the worst stock index fund 10 yr avg annualized return I saw was 6.89%. Most were in the neighborhood of 8-11%. I'd say if he just kept his money there, he would have been fine.

https://investor.vanguard.com/mutual-funds/vanguard-mutual-funds-list

 

[Knicks411]

IIRC, they came back after all the hoop-la and said they were kind of joking about the allowance.

Can I say I like the story better the first way though?

 

[kirbivore]

there are plenty of people who went "broke" doing "smart" things.

Derrick Coleman wanted to revitalize detroit. Lost almost everything.
Dan Gilbert wanted to revitalize detroit - making billions

Mark Brunell invested in Fla real estate and lost almost everything
Donald Trump invested in Fla real estate and makes billions

Not to mention when family gets involved, there are numerous cases of them "stealing" or doing "dumb" things with the money. Money also changes people and family members. When they get used to being on the "payroll" - its nearly impossible to take them off of that payroll with out serious issues.

MCW has 2 years of communications and rhetorical studies. Which is not to be confused with anything at Newhouse. I took a few CRS classes... it was 1 of the athlete majors. He is more than likely not equipped to handle money. He may not know the difference between a savings account that Bank of America offers at .007% interest and an online savings account with Ally that offers 0.85% - let alone the difference b/w fixed annuities, variable university life, term life, whole life, hedge funds, mutual funds, stocks, bonds, short, long, 12% financing on a mercedes, or a 5/1 arm mortgage.

he is going to need good help. especially when contract #2 comes into play.

He doesn't need life insurance yet.