#36 | Finances of Young Athletes and Child Care feat. Ali Siam & Natalie Boyle

Practical Tax with Steve Moskowitz

When young athletes come into money, here’s why they need expert tax advice and the inflationary world of child care has Americans struggling to balance work and family. And as always taxes. Episode Transcript Intro: Welcome to the Practical Tax podcast, with tax attorney Steve Moskowitz. The Practical Tax podcast is brought to you by Moskowitz, LLP, a tax law firm. Disclaimer: The information contained in this podcast is based upon information available as of date of recording and will not be updated for changes in law regulation. Any information is not to be considered tax advice or legal advice and does not form an attorney/client relationship. Further, this podcast may be construed as attorney advertising. You should see professional consultation for your individual tax and legal situation. Chip Franklin: All right. Well, welcome to another edition of Practical Tax, with tax attorney Steve Moskowitz and Chip Franklin. Steve, this has always intrigued me and that is the athlete that comes into a lot of money when he has never had any money in his life. Steve Moskowitz: Oh yeah. Chip Franklin: I know, because you've done a lot of sports shows. You and I have talked about this in the past and you've talked about luxury taxes and all, but this is something that really touches me. I had a long talk once with MC Hammer about what he went through and all the money he lost. I knew Dexter Manley, you might remember that name from back in the old Washington football team days, and he lost it all, and others. It's always broken my heart because it's difficult for these kids. They bring along everybody they grew up with and everything and they try to give to everyone and then it's gone. I think that's just so sad. Joining us right now is Ali Siam. He is a sports agent who has a lot of experience in this. He's negotiated more than a dozen or so NFL contracts and he's nice enough to join us on Practical Tax. Ali, welcome the show. Say hi to Steve. Steve Moskowitz: Hi. How are you? Ali Siam: Hi, how you guys doing today? Thank you for having me. Chip Franklin: There's a lot in the news, obviously, every year as the different drafts happen. There was a kid on my street who signed a deal with Tampa Bay. He was the 28th pick in the draft in baseball. Here, in Southern California, that happens a lot. He got three-and-a-half million signing bonus, but he's 18, so now he's going to be playing against the best people he's never seen. When he was in high school, he was the best player in the county. Now, he's just another guy. Fortunately, he has a father that will help look out after it. Let me ask you both, and let me start with you, Steve, when we look at this kind of income coming in, how many people are really prepared for that? Steve Moskowitz: Almost nobody. Here's problem number one, when the guys get it, they're really young and they don't realize that the life of a professional athlete is nowhere near the life of most other jobs, and that is a job. You get beaucoup money up front and you spend it, but the problem is most other professions, you wouldn't blink an eye when say how long you would be working. With an athlete, a lot of athletes are finished in their 20s, maybe into their 30s. What other position do you know of that you say, "Oh, 40, are you kidding? 50?" How many football players can only play a couple of seasons because they get injured so much? So, the bottom line is, basically, if I was talking to somebody like this, I'd say, "Look, let's take a look at this contract and figure this is the money you're going to get for a lifetime. So, you're 21 years old, let's say you have another 60 years to go or so, let's divide this and see how much we're getting here." And then what I do is I make it practical, I say, "Look, we're not going to save every penny. Here's a portion of percentage, just blow it. Have a good time, have fun," but it's a percentage.