Hillary Howard: 5:11. From the first time a professional athlete begins his or her career, they need to start considering life after the playing days are finished. And we can learn a lot from them by planning our own retirement from day one.
Shawn Anderson: Well, here to help us prepare to win the long-game, Nina Mitchell co-founder of Her Wealth and Senior Wealth Advisor at The Colony Group in Bethesda. Great to have you back Nina.
Nina Mitchell: Thank you Shawn.
Shawn: So, you've spent a good part of your career as a wealth advisor, working with professional athletes, as well as other successful professionals. What do athletes who are making millions have in common with the rest of us?
Nina: Well, I've been managing the financial lives of professional athletes for about 30 years and most of my retired athletes are still working in their second career today. Sure, the athletes make or earn millions of dollars, but they also have very short sports careers that on average last maybe 3 to 6 years. So, just when most professional athletes are retiring in their 30s, the rest of us working professionals are hitting our prime earning years and hopefully, we too can have an opportunity to make a few million over our entire 40-year career.
Which brings me back to what we have in common with our fellow athletes; we all want lifelong financial security, but too often we just wait too long, spend too much and just don't have a good game plan to get us there.
Hillary: Okay, so folks who are trying to build their careers in a corporation or their own businesses, what do they need to start thinking about?
Nina: Well, whether you're an athlete or a corporate executive, it definitely helps to have a financial advisor who can be your coach and keep you on track. And many of the same principles apply to athletes and executives alike. First, you got to create a realistic budget that includes taxes and allocates money for long term financial goals. There's always going to be a lot of competing goals for limited dollars; whether it's retirement, it's kids' education, it's a new house. So, you've got to stay disciplined and you can't get caught up with leading too extravagant a lifestyle and having too much debt.
And then next, of course, quantify your savings plan. You know, you can never invest too much or too early, and so you definitely want to make sure that you maximize your compounding benefits and you don't invest too conservatively. And in fact, for many of our clients’ financial plans, we use a tool called Monte Carlo analysis, which runs a 1000 random simulations of their financial plan against future market conditions. And it's a great tool to help determine how much they can withdraw each year from their plan with a high probability of success that they won't run out of money. And being proactive this way, just allows us to stress test their portfolios regularly and make adjustments.
And I would just say lastly, you know, whether you're a professional athlete or a corporate executive, make sure you have enough life and disability insurance for your family. And I know our Her Wealth website has a great preview time and checklists that our listeners might like. One it’s called Fearless Financial Plan for Retirement.
Shawn: Alright, very good. Thanks Nina. That is Nina Mitchell with The Colony Group in Bethesda, you can read more at wtop.com, search Her Wealth.
Consider this your training manual to get and stay financially fit for life!