It is often said that likelier route to achieving financial independence is not so much in generating superlative returns as much in having a disciplined approach to saving. This applies even more so for sports superstars who often at a very young age tend to earn big bucks, quickly get on to a lavish lifestyle forgetting that their earnings period is short lived as their bodies age and their skills are no longer valued. This NYT piece talks about the unlikeliest of places – the NBA known for the extravagant lifestyles of its star – where a wealth manager has built a successful franchise inculcating discipline and frugality (in the given context) among his superstar clients.
“Every day of Joe McLean’s job, as the premier wealth manager of the N.B.A. elite, requires him to make the kind of purchases that most of us make only once or twice in a lifetime. He bought 25 cars on behalf of his clients last year, and he probably sold nearly as many. He closed on four houses in February alone. You wouldn’t believe how many pool tables he’s bought, let alone how many pools.
Managing basketball players’ money is not the same thing as managing their wealth. It’s Mr. McLean’s job to protect his clients’ assets no matter what form they take. Their cars need customizing. Their houses need renovating. Their private bowling alleys need polishing. Their koi ponds — filled with 30 creatures, each worth around $5,000 — need a specific kind of emergency netting installed when the team is on the road and there’s a hurricane bearing down.
…This is not to say Mr. McLean’s clients are profligate. To retain his services, each player must agree to put aside at least 60 percent of every dollar he earns, with the rate climbing to 80 percent if he’s fortunate enough to land a long-term deal. Or they’re gone. Mr. McLean has fired two clients for ignoring the policy.
….Mr. McLean doesn’t negotiate his clients’ deals — he’s not an agent. His job is to grow every dollar that comes in and track every dollar that goes out. He’s part investor, part butler, a C.F.O. and a golf buddy, a sports therapist and, when necessary, the disapproving dad. When the explosive power forward Aaron Gordon got his first big contract last summer ($84 million), Mr. McLean warned him that “with great abundance comes great discipline.”
Mr. Gordon, 23, is unusually self-aware for a rich young athlete, and he knew it was exactly what he needed to hear. “Joe helps me pump the brakes,” he said over the phone in April, the night before Orlando’s first playoff game in more than a decade. “I like the idea of instant gratification. I want to hit home runs every single time. Joe’s been dealing with money for a long time, and he understands it’s not about home runs, you know, it’s about the singles, it’s about the doubles. Longevity.”
Mr. McLean earns players’ trust in part by doing the work — sourcing the golf clubs, buying the koi nets — almost entirely himself. His company, Intersect Capital, manages contracts worth $1.7 billion for about 50 athletes, and it could add another billion in value this summer alone. And yet his firm, which is in San Ramon, Calif., employs only 10 other people, because the white-glove treatment is the whole point.
…”And Joe’s been right by my side. Whether he has to tell me, ‘O.K., this month you spent too much, we gotta calm down these next few months’ — I trust him that much.”
Note: the above material is neither investment research, nor financial advice.Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services and as an Investment Advisor.
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Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.