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Pro athletes Isaiah Thomas and Dexter Fowler talk about top money tips

Pro athletes Isaiah Thomas and Dexter Fowler talk about top money tips

Malerapaso | Istock | Getty Images

HUNTINGTON BEACH, Calif. — Professional athletes are faced with a difficult task early in their careers: learning to handle large sums of money when pushed into stardom, often at a young age.

Isaiah Thomas, an all-star basketball player, and Major League Baseball player Dexter Fowler sat down with CNBC at the Future Proof wealth festival to discuss the money lessons they learned during their professional careers. Financial advisor Joe McLean, who works with Fowler and Thomas, also shared advice on working with wealthy athletes like NBA star Klay Thompson and pro golfer Sergio Garcia.

Here are six of their best money tips.

1. Save more than you spend

Isaiah Thomas at the 2016 NBA All-Star Game.

Elsa | Getty Images Sports | Getty Images

“Once I had money, when my professional career started, learning how to save was the most important thing I learned,” said Thomas, 33, a point guard who currently a free agent. He has played for a lot teams over a decade-long career, and was a two-time NBA All-Star during a stint with the Boston Celtics from 2014 to 2017.

When his first paycheck came in, Thomas and McLean set parameters: 70% of each net dollar was allocated to a piggy bank. This made saving automatic, said McLean, founder and CEO of San Ramon, California-based Intersect Capital, which ranked 94th.e on the CNBC Top 100 Financial Advisors list in 2021.

“Saving more than you spend was our philosophy every month,” Thomas said.

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The percentage saved can change depending on the athlete and the stage of their career, McLean said. It could be 40% for a player’s first contract, 60% to 70% for the second and 80% for the third and beyond because “the cash flow is so high at the time,” McLean said.

This approach helps players choose the lifestyle they want to live “before your lifestyle chooses it for you,” he added.

“You have to make the decision from scratch” to build a habit, he said.

2. ‘Always prepare for rainy days’

“Always prepare for rainy days,” says Fowler, 36, an outfielder who won a World Series in 2016 with the Chicago Cubs. currently a free agent.

“You never know what’s going to happen,” he added. “You [could] get into a car accident; you could stop working.

“Hope for the best, but prepare for the worst.”

Dexter Fowler during game seven of the 2016 World Series.

Gregory Shamus | Getty Images Sports | Getty Images

Fowler describes himself as a lifelong saver. As a young boy, he kept the physical birthday checks from relatives because he didn’t know they had to be cashed.

“People live in the moment,” he added. “Don’t get me wrong, take your vice.

“I like watches; that’s my vice, but I don’t have ten vices,” said Fowler. “That’s how you go crazy; you’re going to spend money, but spend it the right way.”

3. Be mindful of financial consequences

For individuals who make significant sums of money, there is no immediate consequence of poor financial decisions, McLean said.

“Maybe you have a high Amex bill, [you’re] swiping, making some big purchases, but because money is still coming in, the card still works,” he said. “You don’t feel it.”

As McLean explains, “the laws of finance do not follow the laws of physics.”

This is what happens in sports: you save a lot of money, but you have a big lifestyle and you don’t let that increase.

Joe McLean

founder and CEO of Intersect Capital

“If you walk over a log, you have to keep a close eye on where you’re going, and if you take your eyes off, you’ll fall into the water,” he said. “If you watch your money while making a lot of money, nothing will happen.”

Until the money runs out, at least.

“A lot of athletes think it will never stop, or it will never end,” Fowler said during a question-and-answer session on Future Proof on Tuesday. “But it does.”

4. ‘Live as if you’re already retired’

“Live like you’re already retired,” Fowler told CNBC.

The thinking is: If you spend too much during your working years, it’s hard to switch back to a more frugal lifestyle later on — which may be necessary for someone who doesn’t have the nest egg to support lavish spending.

With this mindset, “you don’t have to change your lifestyle when you retire,” Fowler said.

“And it’s hard to do,” he added. “You’re in locker rooms and clubhouses… [and] you see a guy driving a [Lamborghini].

“You’re like, I make seven times as much as you do, and I don’t feel like I can afford that.”

5. Merge your money

6. Look beyond the lump sum

Fowler received a signing bonus worth almost $1 million in 2004 when he was drafted by the Colorado Rockies. He was just out of high school, 18 years old, and had gotten his first contract, he said.

“You sit there and you’re like, I’ve got $1 million?” he said. “A million dollars was a ton then.”

“But $1 million won’t get you very far,” he added.

For ordinary retirees, the same principle can apply — a $1 million nest egg may sound like a generous sum of money for living big, but it may not go as far as people expect in a retirement that could last three decades or more.

When he got his signing bonus, Fowler immediately wanted to buy a car. All the newly drafted players were buying Escalades and Range Rovers – so he bought a Range Rover, against the advice of his father, who recommended leasing rather than buying a car, Fowler said. (Fowler now leases his cars exclusively; he owns two Teslas. Cars are “depreciating assets,” he explained.)

Tax also ate a significant portion of his signing bonus, Fowler added. When he played a minor league ball after the draft, he realized it’s hard to live on that salary, earning him about $300 to $400 every two weeks — making the bonus essential to make ends meet. .

“I saw a bunch of guys get off-season jobs,” he said. “I was lucky that I didn’t have to.”