Doug Davis has been around the sports community all of his life. With a family of Mississippi State athletes, Doug's dad and uncle were highly-accomplished football players, Doug played varsity tennis, and his nephew was the Bulldog's baseball captain a decade ago. Considering this history, coupled with advising investors since 1985, Doug has compiled this list of why so many coaches struggle with their retirement game plan.
Waiting Too Long
It’s a very simple concept in athletics…more repetitions at an earlier age typically create a better-skilled player as their training progresses. The same is true with investing and retirement planning: start early and your nest egg has more opportunity to prosper. Start late and you’re constantly playing catch-up as the clock winds down. The difference in waiting 10 or 20 years to take action can be striking…and tragic.
Not Understanding the Basics
Insider jargon in baseball is just as prevalent in the investment world. If you remain uninformed and don’t learn the basics, your risk of making poor decisions dramatically increases. There are no dumb questions, and you should always feel comfortable before taking action.
Not Having a Late-Inning Game Plan
Baseball coaches are forever planning how they will execute their late-game strategy – whether to change pitchers, steal a base, lay down a bunt, etc. These strategies are practiced multiple times each week. But as a Pac-12 coach told Davis recently, "We’re a mess on our finances. So many of us don’t have a clue what to do." Of course, you're busy. But you have a duty to your family, don't you? Excuses don't count. No Interest + No Knowledge + No Game Plan = a Highly-Probable Bad Financial Ending.
Spending vs. Saving
Thanks to tremendous television revenues, conference networks and championships, etc., today’s D-1 coaches are making more money than ever before. They’re also spending (and borrowing) more on nicer homes, cars, clothes, vacations…But for saving, not so much. This from a Big 10 coach: "Many on our staff are doing nothing about their retirement." The majority of coaches are in the same boat. How about you?
Trusting the Wrong People
Today’s coaches are easy targets for investment fraud. Exclusive offers "for coaches and professional athletes-only" can be quite tempting – with the promises of high returns with no risk, "other coaches are doing it" and "it won't last long." Go to the internet and look up the ESPN article titled "Underwater." Read it, file it, and email the link to your coaching peers.
Changing Financial Advisors in Every New Town
The coaching profession is often a life of constant upheaval and uncertainty. If you can find a trusted advisory fit for your family, it often makes sense to maintain this relationship throughout your coaching career vs. always having to create new advisory connections, strategies, and statements.
"I don’t have time." "Let's talk after the season…signing day…fall practice." The years keep rolling by and nothing ever gets accomplished. Such a repetitive cycle often crushes a successful financial ending. You get out what you put in.
So how are you going to fix this, Coach?
Doug Davis is Managing Principal at Davis Investment Strategies, LLC, 4800 SW Meadows, Suite 300, Lake Oswego, OR 97035. He can be reached by phone at 503-534-3690 or by email at email@example.com. Doug has advised investors for almost 30 years, including coaches and athletic directors, on their investment and retirement strategies. His articles and viewpoints have appeared in The Wall Street Journal, Business Week, Investors Business Daily, This is AFCA, and other publications. You can learn more about his work with the sports community at www.davisinvestmentstrategies.com.
Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN). Member SIPC. Davis Investment Strategies is a separate entity from WFAFN.