Show Me the Money, or Not
The Woodward staff includes folks who bring together different financial planning perspectives. In this post, Joe and Allison are going to provide us with different viewpoints on US Olympic swimmer Katie Ledecky and her recent decision to turn down a number of highly probable and highly lucrative endorsement opportunities and, instead, attend Stanford University.
The Case for Going Pro (Presented by Joe):
Allison, my first reaction to hearing this story was “Is she crazy?” Experts put her potential endorsement deals in the range of $3M-$5M per year. I’m not pushing for a new job, but if I was representing her, I would be on the phone this minute with Oakley, Speedo, Nike, Apple, and Wheaties, to name just a few.
People may scold me for only thinking about money, but I’m a financial planner and part of my job is to help clients grow their wealth, maximize their human capital during their working years, and take advantage of financial opportunities.
While Katie Ledecky is planning to return to the Olympics in 2020, and it’s quite possible that all these sponsorship opportunities will still be there, there are no guarantees. She could get injured, she might catch the flu the week before her events, or new swimmers might emerge and challenge her swimming supremacy.
I know that by staying amateur, she will receive a full ride scholarship to Stanford, and be able to live the life of a student athlete. Stanford is a fantastic school but so is $20M and the freedom and flexibility it brings with it. She would have tremendous opportunities, worthy projects to get involved with, and great causes to support. And she can always go back to school.
The Case for Staying Amateur (Presented by Allison):
Okay, Joe, this all seems reasonable except for one thing…we haven’t asked Katie Ledecky what she wants. Maybe being a student athlete right now at Stanford is more important to her than having the freedom and flexibility of millions of dollars.
I think we can agree that not everyone has the same financial objectives or the same views about money. Additional money can bring great opportunities, but it can also bring tremendous pressures, particularly at the young age of nineteen.
You mentioned that part of our job as financial planners is to help clients build their wealth and take advantage of financial opportunities. While this is true, it is also our job to help them live the lives they want. And sometimes this means prioritizing life goals that differ from, or even conflict with, purely maximizing wealth.
Resolution (Presented by Joe and Allison)
We believe that the best approach is to sit down with Katie Ledecky and ask her what she wants. We’ll present the opportunities to her. We’ll help her explore and review and discuss the pros and cons. We’ll outline the trade-offs. We won’t push our personal opinions on her. We’ll act as a guide. And, we’ll advise based on her particular situation and goals.