How To Not Go Broke After Hitting A Big Payday

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3:22But, you know, it's interesting. We haven't spoke about this too much on Market Mondays, but it is a financial conversation. And I was at St. John's yesterday. So Ian Jack, Captain Jack. Back home. So the ex, what's up? You know, he was somebody that actually was a five-star recruit basketball and went to North Carolina. And he's from the Bronx. And he did one year in North Carolina, and he's transferring to St. John's. The reason why I brought him up is that I'm at St. John's yesterday. I'm just looking. St. John's is a beautiful campus in Queens. And I'm just thinking to myself, like, man, Captain Jack's coming to St.

3:57John's for$2 million. They put$2 million. Gave him a$2 million NIL deal. I'm like, man, he's making more money than anybody on the campus outside of Rick Pitino. That's crazy. Yeah. That's a good point. You got a 19-year-old sophomore that's coming on. And I'm just looking at all of the prestigious buildings, all of the clergy, everything. And like I said, I mean, Rick Pitino's making the most money. But after that, you got a 19 year old. If he's not the second highest paid individual on campus, he's at he's at least top 10. So the next question that I have for that is for these kids that's getting NIL money.

4:38The fight, what financial steps should they be doing them and their parents to make sure that they're not blowing this bag? um once it's always percentages for me so it's not the percentage of money like for him specifically um you got to put half of the money away because he's already lit like a lot of times index funds i would do half index funds and then probably half microsoft and then visa for sure of course bitcoin if you can great but i think it's an easy win because especially just on Microsoft alone just own an open AI, whether they choose to be bought out or they become public, I don't know if they'll allow that.

5:22But that probably, I said at the top of the decade, it's going to be, I think, stock of the decade. And that's panning out to be true. So let's say if he put$500 ,000 into them, he's probably going to make$8 million off of that probably by year nine. Easy, easy win. Regardless of what happens, whether he goes to the league, what his contract situation is what i try and tell any player like think of it is you get your same salary in the nba or nfl without having to play more years so you will spend five six hundred thousand on a woman down the line trying to get out of a situation or you can put some of that capital in now and have it grow for you and you never have to worry about what's going on off the field so yeah i will put half away so i will put a million away into i was split up between microsoft voo third visa fourth bitcoin let it run in nine years you should have eight or nine million dollars easily and that's not even including the dividends and that's and don't give all your money away to women and that's the thing and that's the thing too because it's like this is an important conversation because you know i'm in the space so So what's happening now is that you have agents that take their cut, but then there's like street agents.

6:40There was always street agents, but now there's street agents that's brokering NIL deals. And they're taking anywhere from 5 % to 20 % of NIL deals. So parents, it's vitally important. A few things. A middleman is never really needed. But if you do have a middleman, you got to negotiate that contract to as low as possible. And to the kids, because you're seeing a lot of kids that's driving Lamborghinis and all of these cars on campus. Like you said, invest your money. You're getting$3 million. You're buying a Lamborghini. That's$500 ,000. And you're saying work. And you still got to pay taxes on the money.

7:17So I get it. You're 18. But like you said, if you put that money into an investment in a relatively short period of time, by the time you're 28, not even 30, by the time you're 28, you're going to have multiple millions of dollars where even if you don't make it into the league, you're still going to be a multimillionaire and you should be set for the rest of your life. If done correctly, like this NIL money is to the point now, like if done correctly, you don't even got to go to the league. You can be set for the rest of your life just based off of decisions that you make from NIL money when you're 18, 19 years old.

7:54And it helps. I would say we got to take into account that he's not coming from like any school. Like he was at North Carolina where he got NIL money as well. But there's a big difference in state tax when you leave from North Carolina to New York. For sure. Especially when you're playing in New York City. And so having somebody on your team, like a CPA, that can explain that to you. Because, yeah, it's a lot of money. And this is a hometown kid. This is like, you know what I mean? Like I think the best advice on top of everything that you said is that you got to realize everybody can't come with you on this journey.

8:26and on top of that there's a lot of conversations out to red panda sports and then players and owners one game at a time yeah the politics of the business that you're in the nba nfl that's why the investment part is so important there's no reason because it's not talked about there is a system for you to get those big contracts and for people to steal that money away from you tim duncan comes to mind i'm glad glad kg recovered sebastian tailfare comes to mind like there's a lot of people i've met that have made 30 or 40 and they have 2 million left and everyone wants to blame it on the entourage no one ever talks about the financial syndicate that is an entourage that takes all the money away it's fine that's a fact like everyone like yo if y 'all quit hanging with 20 people what about the 20 financial people that's on the team that is feeing you to death 2-3 % of the time.

9:222-3 % with 20 people adds up. That's a fact. That's a fact. That's a fact. And the thing about, I'm going to give you guys some game. Outside of the usual conversation that we speak about on Market Mondays. Dia. A dia is a deferred income annuity. So if you're getting money, if you're getting a lump sum of money, especially when you're young, put a portion of that into a dia. Because what that does is that grows over the course of time and you take income from it. so like Allen Iverson right everybody always talks about like his legendary deal that he did with Reebok and how he's going to be getting like I think next maybe he started this year when he turns 50 50 he'll probably be 50 soon but whenever he turns 50 he gets like a million dollars a year for the rest of his life that's because when he structured that first deal he had a good advisor somebody on the team that actually said okay we're going to put a portion of this away so you can't spend it obviously you know people you know he had spending habits.

10:18So it's forced savings that grew over the course of time. And now let's say you put a million dollars in and you wait till you're 40 years old. That million dollars is going to be $10 million right now. You can draw income off of that 10 million for the rest of your life. Bobby Bonilla, a lot of these sports contracts, that lump sum was put into an annuity that grew over the course of time, tax deferred, by the way. And then now that provides a lifetime income and And depending on what type of annuity it is, you can actually have some guarantees on it. So it's like an insurance based product. So it's not as risky as just having it in the stock market.

10:56So that's something that, like I said, if you hit the lottery, if you have a lawsuit, if you get NIL money, sports, any lump sum, any type of thing where you get a lump sum at a relatively young age, I would definitely at the very least look into it. educate yourself on a DIA, D-I-A, deferred income annuity that you can put money into and you can draw income down the line. Yeah. So Iverson is going to receive from his Reebok deal,$800 ,000 a year annually. And he will have access to 32 million at 55. So he's 49 now. So when he's 55, he'll have access to that 32 million. And then some people be like, well, I don't, well, I want my money right now.

11:46It's a porch. You got to have portions. You got to layer it. Layer it. Layer it out. Nobody's going to be mad at saying, okay, I got$30 million waiting for me in 15 years. I mean, a good case study would, if you watch sports and study sports, look at what the Los Angeles Dodgers have done. Deferring contracts. Shohei Ohtani deferred$700 million. $600 million. $650 million. Deferred. You got to say, sometimes in life you guys save people from themselves. For sure. With disrespect to Allen Iverson, he's one of the greatest that ever did it. But, of course, he has financial problems, right? Like you go through a divorce and then you have issues that come and it's just like you're getting money at a young age.

12:28And sometimes as an advisor or as a parent, you have to save people from themselves. That's important. or the team that is put around them to take all the money away. Like, I would love to see from the time he was drafted in 96 to when they went to the finals, what did the value of the 76ers increase and then how much he made in jersey sales? Because if I don't put a plan in place and I allow you to go, everyone doesn't operate as a fiduciary, but there's a lot of teams that profit from the destruction of athletes. Of course. It's not talked about. Yeah, and they're going to leach off of them until it's the next athlete.

13:10Yep. And then rinse and repeat year after year, decade after decade. And then some more game for you is that if you have a business manager, so there's a few different things here. There's the agent who works out contracts, stuff like that. Then there's a business manager who is actually more on the financial side, right? The business manager, it would be better to have them on salary as opposed to them getting percentages of the deal. Hold on. Say it again. That's the gem of the day. It's going to save you millions. Facts. You got to put them on salary. And that's something that even Steve Harvey spoke about on his conversation with us because you got, especially in Hollywood, now going to Hollywood, you got an agent, you got a business manager, you got the talent manager, you got the financial advisor, you got the CPA, you got And all these people are taking percentages.

14:06And it might seem small, 4%, 5%. It adds up, especially if you're dealing millions of dollars. Like before you know it, 35 % is out the door. That's before taxes. Now you got to pay taxes. So now you've given away 60%, 70 % of your money. Now you understand why people can actually go broke. 30 % of your money is going to tax. 35 % of your money is going to taxes. Then you got 30 % going to all of these other people that I just named. then we're not even talking about all the lifestyle as far as you know your cars your house then you got you know child support you got all of these things now before you know it you've you're in the red so you may not have your ip exactly so it's better if you can put people on salary because then also when you put them on salary is tax is tax deductible for you because you're paying them make sure that they they fill out their their w-9 forms right now you're paying as an employee, independent contractor, however you set it up.

15:03But now that's tax deductible to you as a business entity. Set up your business entity, your LLC, your S Corp, your C Corp. You know, you got to do it. You just can't go into this just thinking you're just talent. That's how you're going to get taken advantage of. Yeah. And Money Master the Game, one of the things that

15:26had a great impact on me was the fee structure that if you have other people invest for you, right? But no one talks about it on the talent or entertainment side or business side. Like I am, great point Rashad made to put everybody on salary because even if you're starting out as a beginner entrepreneur and you're saying, hey, do this business with me, you get 50%, I get 50%, it's a recipe for disaster. You have to count up all the fees and percentages that you're paying. If you're an artist, tour manager, and then also too like even let's say for us you may have to enter a deal with somebody then they don't even want to give you your data like it's theft across the board and then they'll say well you're tough to work with no i don't want to be robbed no you're gonna take 20 and i don't get my data and no then you're gonna cross collateralize what i built with something and be mindful because you'll look up in 10 to 15 years and you'll be paying 20 or 30 different people a bunch of percentages and if you're averaging 12 or 15 return you're in a negative so but that's all i gotta say about that you haven't that's a that's a million dollars worth of gain for you for sure and breaking news last night the japanese prime minister ishiba says japan's financial situation is worse than the greece situation scary times the greek situation from two oh wow yes no one's saying a word wow like there's things on a chessboard financially worldwide i forgot who said it but um there was like for all parties involved india the united states china it is best for us to all get along because the real world war is going to be like the collapse that happens in all of the markets if we don't find a way to get along we need each other and i like each other can't we all just get along for real reginald denny said that no was that right that was running king rest in peace that's a piece of running an illegal alien from guatemala charged with raping a child in massachusetts an ms13 gang member from el salvador accused of murdering a texas man a venezuelan charged with filming and selling child pornography in Michigan.

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18:31Sponsored by the United States Department of Homeland Security. Hey, it's Joel. And Matt. From HowToMoney. If your New Year's resolution is to finally get your finances in shape, we've got your back. Prices, they're still high. And the economy is all over the place. But 2026 is the year for you to get intentional and make real progress. That's right. Each week we break down what's happening with your money, the most important issues to focus on, and the small moves that make a big difference. Kick off the year with confidence. Listen to How to Money on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

19:05What if mind control is real? If you could control the behavior of anybody around you, what kind of life would you have? Can you hypnotically persuade someone to buy a car? When you look at your car, you're going to become overwhelmed with such good feelings. Can you hypnotize someone into sleeping with you? I gave her some suggestions to be sexually aroused. Can you get someone to join your cult? NLP was used on me to access my subconscious. Mind Games, a new podcast exploring NLP, a.k.a. neurolinguistic programming. Is it a self-help miracle, a shady hypnosis scam, or both? Listen to Mind Games on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

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