Social media is like those funhouse mirrors you saw at amusement parks growing up. What you see is not reality. When it comes to wealth, social media plays a great part in distorting the perception of wealth.
Athletes, entertainers, and influencers who post about their latest purchases – the big house, the new car, fancy jewelry, and the vacation in Ibiza – aren’t telling you the truth about wealth.
True wealth isn’t about things but habits. It reminds me of the mandatory workshops on financial planning that NFL rookies must attend after being drafted. Finance professionals and former players teach these workshops.
Former San Francisco 49ers running back Marcus Lattimore is one player who teaches rookies to manage their wealth through all stages of their playing career.
In a recent foxbusiness.com article, he said that financial savvy is especially needed on NFL draft day when unpaid college players – many who grew up poor – are given million-dollar contracts. “This is an amount of money that these guys have never seen before,” Lattimore explained. “Our brains are wired for short-term thinking and – quite frankly – immediate gratification.”
Lattimore explained that one of the most important pieces of advice he gives to rookies is that they have to approach their money with the reality that their careers and money could end at any moment. He’s trying to prevent these rookies from ending up being one of the 78 percent of NFL players who either go bankrupt or experience financial stress within two years of retirement.
Athletes like former first-rounder QB Vince Young who sign fat rookie contracts and flash their “bling” all over social media but end up losing everything were never wealthy. Young racked up a lot of toys, but mostly he racked up debt.
Young was drafted 3rd in the 2006 draft by the Tennessee Titans and played his last game in 2014. Shortly after retiring, he filed for bankruptcy after earning over $26 million during his career. Maybe doing things like buying up every seat on a Southwest flight so he could be alone wasn’t among the wisest financial decisions Young made.
On the flip side, many football players do adopt wise financial habits that enable them to retire worry-free.
Current player, Byron Jones of the Miami Dolphins, who, on March 21, 2020, signed a five-year, $82 million contract, making him the highest-paid cornerback in the NFL, has never been known to flash his bling on social media. In fact, he hasn’t let all the money go to his head and seems to be extremely grounded when it comes to wealth. It seems that during his career, he’s picked up the same habits that set the wealthy apart from everyone else.
In a series of five tweets following the 2020 NFL draft aimed at newly drafted rookies, Jones imparted excellent advice on setting themselves up for long-term financial success and the pitfalls to avoid. Through these tweets, you can get a glimpse into the wealthy’s mind and profile and the habits they adopt to achieve wealth and financial independence.
Here’s what Jones tweeted:
DO NOT SPEND YOUR MONEY. That number you see on your contract is fake. You will pay roughly 40% to 50% in taxes, agent fees, union dues, 401k account + necessary insurance. Also, a large portion of your contract is NOT GUARANTEED.
Habit 1: Save your money because you won’t be able to work forever.
Do not live a lavish lifestyle. Although your mom may deserve it, she does not need a $100,000 car. She does not need a $1,000,000 house. It is not the time yet. If you protect your money early, you can live a comfortable life forever and provide for your family.
Habit 2: Don’t think short-term gratification. Think long-term security. Avoid expenses that only diminish your wealth and threaten your long-term financial security.
You can raise the standard of living for your family (top education for your kids, healthcare, low crime neighborhoods), but you must be PATIENT. Come up with a modest monthly budget, learn + see the power of compound interest as you invest, understand tax implications.
Habit 3: Leverage the power of compounding through passive investments – investments that make you money while you sleep.
Use the NFLPA to find credible financial advisors. Interview a few and ask honest, hard questions before you make a decision. Please do not use your uncle’s friend because he claims he can get you 50k on your tax return.
Habit 4: Leverage the expertise of others.
In the wise words of Marshawn Lynch, “SAVE YO CHICKEN.” Welcome to the NFL.
Habit 5: Save your money.
Byron Jones adopts the same habits the wealthy adopt to build wealth and achieve financial independence. The wealthy investor profile doesn’t match those of the athletes, celebrities, and so-called influencers you see on social media flashing their riches. The profile of the wealthy investor isn’t exciting, but it’s effective.
Here are a few habits of the wealthy worth adopting:
- They make their money work for them and not the other way around.
- They don’t stop at one stream of passive income.
- They have little to no consumer debt.
- They spend less than they make.
- They acquire assets that build wealth and not destroy it.
- They’re unemotional about investment decisions and think long-term.
- They don’t follow any crowds.
- They understand the value of partnerships and leveraging the expertise of others.
- They trade money for time and not the other way around.
The profile of the wealthy investor isn’t glamorous, but it works.
Kyle Jones is a co-founder and Key Principal of TruePoint Capital, LLC. Kyle is responsible for the company’s strategic planning, investment decisions, asset management, and overseeing all aspects of the company’s financial activities, operations, and investor relations.
Kyle obtained a Bachelor of Science degree from Texas State University – San Marcos, where he also played Division 1 Baseball.