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Playing to Win
Samantha Marshall and Matt Purdue
08/01/2005
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Williams was desperate for the sound judgment of an experienced third party.
When news spread that he had declared himself eligible for the NFL draft, he was
inundated by dozens of agents and money managers soliciting his business. He was
already determined that he was not going to let his agent handle his financial
affairs, a mistake that many of his colleagues have made. “Having an agent
negotiate your contract and keep control of your capital is just retarded,” he
says. “It’s such an obvious conflict of interest, but a lot of NFL players got
taken.”
Realizing his dearth of life experience and the temptations to spend
that would come his way, Williams turned to Don Bradley, associate dean of
students at Oklahoma, to help him find financial experts he could trust.
(Williams later contributed $100,000 to his alma mater to develop a
strength-training facility.)
After Bradley whittled the best financial
advisor candidates to three, Williams interviewed each one and chose Mangum for
his personable nature and hands-on approach. “I liked the fact that I could get
him on the phone at any time,” Williams says.
Mangum’s firm serves
approximately 70 football players. Of his 50 employees, 15 conduct due
diligence, a service that Williams makes ample use of as he passes along
business proposals from acquaintances and “relatives I didn’t even know I had.”
Before Williams makes practically any purchase, Mangum researches dealers who
fit his budget and offer the best value, he says.
Initially, Williams was
quick to give loans, but he has lost count of the hangers-on who have defaulted.
“I lost a few friends over loans,” he says. Williams now shelters himself from
people who hold out their hands. “I like to treat my friends, but some of them
take it like a weakness.”TOP VIEW
Professional sports is known for creating millionaires overnight, but for every
MVP who retires comfortably, there are many who quickly squander their newfound
wealth. Two of the NFL’s brightest new stars are setting an example for others
by vigilantly managing the fortunes they earn in their short careers by
educating themselves, taking control of their finances and forging strong
relationships with trusted advisors. |
A Quick Study
Williams’ conservative investment portfolio includes a range
of stocks, bonds and small to large cap funds. Each asset is managed by a
specialist handpicked by CapTrust. Mangum works with a CPA firm and legal team
to conduct most of Williams’ tax and estate planning.
“A player’s biggest
enemies are taxes and inflation, so we have to be very tax sensitive,” Mangum
says. He uses irrevocable life insurance trusts to minimize estate taxes and
municipal bonds and charitable donations to soften the tax bite.
Mangum’s
thorniest challenge is educating players about fiscal responsibility and
convincing them that their football income is a short-term proposition. Players
must race to amass $6 million to $8 million, to generate an annual income of
$300,000 to $400,000 over their lifetime. But Williams, who is aiming much
higher, is one of Mangum’s best students. “Roy tends to be the one who asks a
lot of questions,” he says.
Growing up, Williams witnessed firsthand the
effects of poverty. With both parents working, he was cared for by an aunt who
sold crack. One of his earliest memories is of finding a pile of white powder on
his aunt’s table. Thinking it was baby powder, Williams rubbed it on his
arms.
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