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Hall of Fame Retirement Advice From a Celtic Legend

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Several years ago I wrote a little book titled, Think Like an Athlete, Manage Like a Pro, where I extolled the many positive personal qualities that successful athletes utilize and that business leaders can employ to build their companies. One thing you won’t hear me recommend is that you invest like an athlete. The halls of retired professional athletes are littered with tales of bankruptcy and financial excess leading to financial ruin. One statistic I read recently stated that 78% of pro football players and 60% of NBA players are bankrupt within 5 years after retiring!

With this knowledge I was all the more intrigued to learn of the financial success of one of my all-time favorite athletes, John “Hondo” Havlicek. A recent Forbes magazine article explained how Hondo achieved his success with discipline and sound advice. Consider that he earned $15,000 in 1962 as a professional basketball player with the Boston Celtics. If we factor in inflation at 4% per year then $15,000 per year in 1962 would equate to $116,524 a year in 2014. There are probably ball boys in the NBA making that much today. So how did he do it and what can we learn from his success?

  1. Start early. Yes, Hondo told his advisors to invest his money in “Blue Chip” stocks. He was looking to invest his money for the long haul. Like Hondo if you don’t understand investing go with companies that you are familiar with which typically are Blue Chips, those that make up the DOW for example – like AT&T, Lockheed, Eli Lilly, H&R Block and UPS. The best way to invest in Blue Chips is through a mutual fund such as an exchange traded fund (ETF). If you didn’t start early, OK start now. It is never too late.
  2. Stay invested. Hondo didn’t try to time the market. He learned early that markets go up and down but over time he would benefit from the historical growth of the market instead of potentially missing some of the best days by pulling out when things look bleak. Consider that 95% of the market gains between 1963 and 1993 resulted from the best 1.2% of the trading days during that time! If you missed 90 of the best performing days your return would have dropped from 11% to 3%. Stay invested!
  3. Don’t overspend – Even though $15,000 a year in 1962 was considered a good income Hondo knew his career was not infinite so he had to prepare for the long –term. If you put a budget together now and start living within your means and find some extra dollars to invest it can have a huge impact on your retirement income.
  4. Find a financial manager you can trust. This was critical to Hondo’s success as he relied on expert advice early on especially when he invested in several Wendy’s hamburger franchises. Many pro athletes go broke because they pick an advisor who enables their bad spending habits instead of providing the “tough love” advice that is necessary especially at a young age. You should find an advisor who you trust and who provides good overall financial advice not just investment advice; financial planning advice. A good place to start is with a CFP – a Certified Financial Planner.

Unfortunately we tend to hear and read about the financial misfortunes of athletes. So it’s refreshing to hear of a success story like that of John Havlicek. What makes it even more meaningful is the fact that each of us can and should relate to his financial story and heed his advice. It’s much more difficult to relate to the mega millions being paid today to athletes and to comprehend how they can lose it all within a short period of time. Take these four tips to heart and you too can retire on your terms. Plan well. Live better.


Time Out! Which of the four steps John Havlicek embraced for his sound financial plan is most important to you? You can leave a comment here.

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Learning from the Mistakes of Others

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How does that old saying go, “Those who cannot remember the past are condemned to repeat it”? I believe it applies to the challenges of living successfully in retirement. What does “successfully” mean? I live by Earl Nightingale’s definition of success which is, “the day to day realization of a worthy goal”.

I think it’s safe to say that retiring on our own terms is a worthy goal. So, what can we learn from history? I recently read a post from the blog Retired and Relaxed. There was an interesting discussion on what we can learn form others’ retirement “mistakes”. Here is a sample of the things “I would have done knowing what I know now”:

  • Stay healthy as I grow old
  • Have started saving and investing sooner
  • Make sure I don’t outlive my savings
  • Know the right time to retire
  • Not worry about medical insurance

These are just a few of the revelations in the blog post. The thing that struck me was that many of these things can be accomplished through education. Of course, a lot of “staying healthy” is out of our control yet there is much we can control by learning more about nutrition and exercise, for example. I agree that learning about savings and investing earlier in life can save a lot of financial heartache later in life.

However, it is never too late to learn. Understanding Medicare and Social Security are two learning opportunities that are timeless. By working with a financial advisor, you can develop a strategy to live within your means and not outlive your money. Again, it’s all about learning.

Checkout my blog post titled, It’s Time to Leave “Someday Isle” and Start Planning Your Retirement Journey for more on the “woulda, shoulda, coulda” mentality. Another of my favorite sayings is, “the best time to plant a tree was 20 years ago. The next best time is right now. We can’t undo past mistakes. We can embrace an attitude of learning and start today where we are and make the best of the time before us. Don’t go it alone. There are people like me ready and willing to help you avoid repeating the past and retire on your own terms.

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Think Like an Athlete, Retire Like a Pro

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Like many of you I watched a little football this past weekend. As a former competitive athlete I have an appreciation for the mental part of the game. Not to take anything away from the athletic abilities of the players, if you strip that away or could somehow even-out the talent on both teams you would find that it’s the team and players with the mental edge that will usually win.

I have been an athlete most of my life and once I made the transition to the business world after playing college football I found myself relying on the same qualities in business that served me well as a competitive athlete. In many cases they gave me an edge over my coworkers and competitors. I also realized that these qualities were not limited to athletes. They could be learned. So what is “the mental edge”?

One of my classmates from Stanford, Mariah Burton Nelson, who was a terrific competitive athlete in her own right in college (basketball), wrote a compelling book titled, We Are All Athletes, where she explores how everyone can apply the athletic qualities of champion athletes to everyday life.

To clarify, when I discuss the “qualities” of a champion athlete I am referring to qualities like discipline, goal-oriented, humility, commitment, courage and having a plan. Let’s take a closer look at these qualities so you have a better understanding of how you too can “think like an athlete and retire like a pro”.

  1. Goal-oriented – Think for a minute about your favorite athlete or sports team. Do you think that at some point there was a goal or do you think that individual or team success “just happened”? I know from my own athletic experience I always had a goal. I wanted to be the best I could be in my sport. But I learned at an early age that wishing wasn’t going to get it done. I had coaches who helped prepare me and parents who encouraged me and a belief in myself that I could get there i.e. passion. I also had a belief in my ability.

    So how can you apply this to your retirement planning? Well, it all starts with goals; short-term goals (1-5 years) and long-term goals (5+ years). It involves you sitting down with a pad and pen (or iPad and stylus) and deciding on what your retirement will look like and how you will get there i.e. savings and investing goals, lifestyle and timeframe.

  2. Have a plan – One of my college coaches, the late Bill Walsh (yeah, he coached at Stanford before his 49er fame), used to script the first 20 plays of every game. Part of it was contingency planning so if things didn’t go as planned there was another play to call that would address the new situation. We have to do the same with our own financial planning. We can hope to get a 7% return on our investments but what if we don’t? That is Plan B. A football team can plan for a strong running game, but what if the team comes out passing? How will they defend the change in plan? We have to know what the goal is and the plan will make sure we get there, maybe with a few detours but we will get there.
  3. Humility – Hey, life happens, right? That’s what Plan B is about. Frankly this is a quality many athletes struggle with, how to be humble. What was that old poster from years back, “It’s hard to be humble when you’re as great as I am”? I’m sure we all know a few people who embody that saying. Humility and our financial lives do go hand in hand though. To me, humility means having respect for wherever we are in life and that applies to your financial life. So if you are not where you want to be financially, respect that and make a commitment to “put a stake in the ground” and say, this is where I start, today”.
  4. Courage – It takes courage to be a champion athlete and it takes courage to execute a successful financial plan. Just like an athlete you make sacrifices and tough decisions for the good of your financial plan because you believe that your plan will take you to the “Super Bowl” of retirement whatever you perceive it to be. You own it.
  5. Discipline – The most disciplined athletes are the most successful. Your discipline will be a reflection of how committed you are to realizing your financial goals. I put discipline and courage together. You can’t have one without the other. Discipline takes sacrifice. Your financial success will be a direct result of the disciplines you embrace. No it won’t be easy. Things worth having rarely are.
  6. Commitment – Do you “walk your talk”? This is where games are won and lost and financial fortunes are made and lost. I’m not referring to staying with an investment or a plan that just isn’t working. Coaches change up game plans at halftime to respond to things that are working or not working. Commit to the right activities and behaviors. Change your plan as necessary and don’t do it alone.
  7. Teamwork – Just as championship athletes rely on their team for their individual success we have to rely on our financial professional to help us develop and execute our financial game plan. This is no time for going it alone. The “stadiums” of financial planning are littered with retirees who went broke trying to do it themselves. Work with someone that you trust. Do it as a team!

You don’t have to be an athlete or even follow sports to embrace the qualities that go into a championship athlete and team. You are an athlete when it comes to building your financial success. Think like an athlete, retire like a pro!

Time Out! Which quality do you struggle with when it comes to executing a successful retirement income game plan? You can leave a comment here.

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Your Life Experiences Affect Your Money Decisions

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A financial advisor was trying to get the business of a wealthy, retired man in San Diego. At their previous two meetings, the advisor talked about making big returns on the client’s money and had the client pegged as an “aggressive” investor. At the next meeting, the advisor was going for the “close” and had fancy charts to cement his presentation and what he thought was a sure sale. As the client sat stoically the advisor asked, “You seem somewhat distracted. Have we missed something?”

The client proceeded to tell the advisor that he didn’t like his strategy and his proposal to invest in risky stocks made him somewhat angry. He explained that his father died penniless after investing too aggressively in the stock market. He went on to explain that his father lost his manhood and his money and that wasn’t going to happen to him.

The lessons in this story are two-fold. First, the advisor failed to ask the right questions. Secondly, he didn’t respect how the client’s life experiences impacted the way he viewed money, which he would have learned had he asked the right questions. We are a product of our environment and life experiences. We either learn from them or we are destined to repeat the mistakes of those who influenced us.

My parents were hard-working people. My father was a career Marine and my mother a stay at home mom. We lived paycheck to paycheck during my childhood though I never felt I lacked anything. My parents never had enough money to even think about saving for retirement as they were busy paying for necessities for my brother, sister and me. So they never thought about retirement income. Fortunately, my father had two pensions and Social Security so they ended up in a financially ok place when my father retired from the City of San Diego.

As a result of my life experiences, I had a keen interest in money and finances growing up. As a kid, I sold flower seeds door to door and I had two paper routes to earn spending money. In high school, I worked at the local drive-in theater.

Not only did I want to have a more comfortable financial life than my parents, but I also wanted to know all about personal finance. That thirst for knowledge drove me to a career in financial services. I have certainly made my share of financial mistakes along the way; too much credit card debt in the past, investing in a “sure thing”. The good news is that those mistakes have made me a better teacher and advisor. They have also made me more prepared for retirement than I probably would have been otherwise.

How about you? What lessons can you take from your life experiences with money? Here are three suggestions to make the most of those experiences:

  1. Write down the mistakes you and/or your parents made with money. Be specific. How do you feel about them? Have they helped or hindered you?
  2. What lessons have you or can you take with you to improve your personal financial life? Write them down in a Financial Journal.
  3. Write down your short and long-term goals in your journal. These could be to get out of debt (long-term), start saving for a grandchild’s college education (long-term), decreasing your spending (short-term), not using credit cards (short-term), etc.

Finally, as we learned from the story at the beginning of this post, find a financial advisor or coach who you trust and who asks the right questions to get to know you and your financial life. There is no such thing as one size fits all when it comes to your unique financial goals and concerns. Don’t let anyone short change the experience for the sake of their personal gain. You are in charge! Please leave your comments below. You can also check out my FREE personal budgeting course here.

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3 Ways Good Habits Can Increase Your Retirement Income

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Over the past several months I have read two excellent books about habits and how they influence our lives in some good and some not so good ways. If you get a chance, please pick up a copy of The Power of Habit by Charles Duhigg and/or Atomic Habits by James Clear. Both books offer some practical advice on how habits can build us up as well as serve as roadblocks to achieving our goal of becoming the best version of ourselves. In this post, I offer three ways that habits can benefit you in building your retirement nest egg.

  1. Start small. As James Clear points out, “habits are the compound interest of self-improvement.” If you have a big goal like saving $100,000 in your retirement account you won’t necessarily start by saving $1,000 every week if you haven’t saved anything to date. You start by looking at why you haven’t saved anything. Perhaps you are spending $50 a week on Amazon.com. The things you buy are not really necessary so you agree that every time you get the impulse to buy on Amazon you will put $25 in your retirement account. Once you feel good about that new habit you might increase it to $50 then $100, etc. You are using the same trigger that used to cause you to spend money on Amazon and you have replaced it with a deposit to your retirement account.
  2. Focus on what you want to become. In the example above, instead of focusing on the $100,000 focus on who you want to become – a savvy retirement saver who builds a comfortable nest egg to provide income for life. You can identify with that transformation versus a dollar amount. It is like losing weight. Instead of focusing on the pounds you want to lose, focus on the vision of the healthier version of yourself who will enjoy life more once you lose the weight you want to lose.
  3. Focus on your system instead of goals. If you want to save more money for retirement then focus on your system for getting there instead of the goal itself. Charles Duhigg in The Power of Habit speaks of the cycle of a habit. There is a “cue” then a “routine” then a “reward”. If you have a cue that leads to a bad habit yet the reward is positive then perhaps you can keep the cue and the reward just replace the routine. That is what we did in the example above. We replaced the shopping on Amazon with putting money in your retirement account. That is a system that works, in this example. What cues do you have that lead to bad spending habits? It could be boredom, hunger, a need to be social. How can you replace the unproductive behavior with a better routine? Maybe it’s paying with cash when you get an impulse to buy something on credit that you really don’t need.

Habits can be extremely helpful on the road to financial peace of mind. As the authors Cleary and Duhigg explain, habits need to help us become a better version of ourselves. In other words, they need to become part of our identity. Good habits shape our identity which is why good routines are critical to success in forming good habits. Habits can change our beliefs about ourselves. Pick one routine this week that you will work on changing that will lead to better spending habits.