MiB: Joe McLean, MAI Capital
On this special bonus episode — as Jalen Brunson and the New York Knicks take on Victory Wembanyama and the San Antonio Spurs in the NBA Finals — I speak with Joe McLean, managing partner of sports & entertainment at MAI Capital Management.
Known in NBA circles as being the “money whisperer”, Joe discusses how he pivoted from a playing career to managing money for high-profile celebrities and professional athletes.
A transcript of our conversation is available below.
You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
Masters in Business
Barry Ritholtz interviews Joe McLean, Managing Partner, MAI Capital Management · Bloomberg Radio
00:00:16 Barry Ritholtz: This week on the podcast — what a fascinating conversation. Joe McLean, managing partner at MAI Capital, began his career as a professional and college basketball player before effectively becoming the money whisperer to pro athletes. He works with pretty much all major athletes across every sport: basketball, football, hockey, baseball, golf, NASCAR, you name it. Obviously, the average person listening to this doesn’t have a hundred-million-dollar contract, but a lot of the ideas, a lot of the rules, a lot of the ways of thinking about money with college athletes and professional athletes are surprisingly applicable to the average investor. The idea of saving a substantial percentage of your income in your first bucket — and once that’s covered, moving to a second bit of saving that you’re going to be able to live off in the future, that’s your growth and investing bucket — before you fund the entrepreneurial types of investment. I thought this conversation was fascinating, and I think you will too. With no further ado, my interview with MAI Capital’s Joe McLean. I’ve been looking forward to this for a while. I’ve got to start with your undergraduate years — four years at Arizona, Division One ball. What was the original career plan?
00:01:59 Joe McLean: A hundred percent to play professional basketball. From the time I was eight years old — Michael Jordan, Larry Bird posters on the wall. I remember when the ball was put in my hand. That’s all I wanted to do. I was super blessed. I grew up in Pittsburgh, Pennsylvania, and then my dad — T. Boone Pickens, in ’84, ’85 — he worked for Gulf Oil, and we either had to move to Houston or the San Francisco Bay Area. We chose the Bay Area, and it became Chevron. And I met a point guard named Jason Kidd, who was my high school point guard. So I was kind of blessed to be put in that position — the whole world would come watch him play. And I got seen by all the right people. My mom was the one who decided which college I was going to go to, because during the recruiting visit, Lute Olson and his wife, Bobbi, showed up, and my mom really connected with her. And she said, “That’s who you’re going to go play for. I want you to be in that environment.”
00:02:54 Barry Ritholtz: So we’ll get to Lute in a minute. Did you have height in high school? When did you shoot up?
00:03:00 Joe McLean: I did. I was always 6’3″, 6’4″, and then grew another two inches in college. But — full disclosure — I peaked around 19. I remember, I’m fast-forwarding here, but I was in an NBA pre-draft camp, and I was six-foot-six, I think it was. Ron Artest was right around the same height as me. And then we were standing in our underwear, and he extended his arms — I was in proportion, and he was not in proportion. I think he had a six-eleven wingspan. I was like, “I don’t know if I’m going to make it.”
00:03:32 Barry Ritholtz: So Lute Olson — Hall of Fame coach, multiple trips to the Final Four. You played all four years under him, averaging 10 points a game. Small forward — what was your position?
00:03:44 Joe McLean: Shooting guard, and I guarded the small forward and big-four positions. I had to learn very quickly how to hold onto a guard’s jersey, because everybody was getting much quicker, much faster than me.
00:03:55 Barry Ritholtz: And so you graduate college and you start playing pro in Europe. Where’d you play? What country?
00:04:02 Joe McLean: So you’d basically try out for an NBA team, then get cut, and then you had two decisions to make. One: go to the minor leagues, which is now the NBA G League. It was the CBA at the time. So you go to Bismarck, North Dakota. I lived there for a year, living in a Bismarck hotel and traveling by bus. And then I decided to go to Europe for the years after that. I played in 11 countries, because there are only two Americans per team, no binding contracts — you lose a couple games, they’ll rip up your contract and send you home. And so it’s a great way to see the world.
00:04:31 Barry Ritholtz: What countries did you play in?
00:04:32 Joe McLean: I played in Spain, Portugal, China, Australia, Cyprus. I moved to Ireland for a year to try to get dual citizenship, because then I wouldn’t be counted as one of those Americans. It’s the equivalent of probably Division Three basketball. I was sponsored by a pub, lived in a town called Ballina, which was 8,000 people, 84 pubs. We were sponsored by Longnecks. I made $300 a week, and I have family for life there. It was a great experience.
00:05:00 Barry Ritholtz: That sounds like a blast. So what was the moment when you realized, “Hey, maybe a pro career isn’t my future”? What was that come-to-Jesus moment?
00:05:11 Joe McLean: They were both on the court and off the court. The closest I ever got to the NBA was when they went on strike. The Sacramento Kings had the seventh pick in the draft. I lived in the Bay Area, and I knew they didn’t have any NBA players to work out their draft picks. So I called the scout and said, “Hey, I’ll bring my own lunch. You don’t have to pay me. I’ll just guard the guys you need to draft.” And I couldn’t believe it, but he said, “If you can be here next Tuesday, show up.” And so Tuesday turned into 22 straight days of workouts — I was literally working their draft picks out. They ended up taking Jason Williams. But I got to listen to everything they were looking for, and the process. And long story short, the 23rd day, nobody else was there but the coaches. And they said, “We’re working you out — today’s your day.” And I made it all the way through pre-draft, all the way through the final cut. I was getting on the bus to go to the very first NBA game, opening day, and I watched Oliver Miller walk past me in the locker room. And I was like, “Well, Oliver Miller’s not on our team.” And then I realized — no, he’s coming to take my spot. And so Rick Adelman looked at me, and his head went down, and I don’t even remember what he said. I just knew that it was over for me. That was as close as I was going to get — walking to the bus. And now I had to figure out what to do next.
00:06:32 Barry Ritholtz: So how do you get from working out with an NBA team to pivoting into finance? What was the factor that tipped you that way?
00:06:44 Joe McLean: I had no idea what to do. All my buddies at the time — this is 1999 — everyone I knew in the Bay Area was working for a dot-com company. Everything was dot-com at the time. So I did all my interviews, and I’d show up in a suit. I’d go to Oracle, I’d go to Pets.com — I think I did 50-plus interviews. And I’d show up in a suit, and everyone else was in flip-flops and t-shirts. And it’s like, this doesn’t feel right. I need structure. And so I started playing basketball for this club called the Olympic Club, and I met lawyers and accountants and financial-services people. And they pointed me in the direction to interview. I interviewed every financial-services company. A lot of the big ones — the Goldmans of the world — said, “Go get experience and come back.” And then I met an old former athlete who had had success at Franklin Templeton, and he said, “I’m going to give you a shot.” I’d had some experience investing in mutual funds with the money I made in Europe, but I didn’t really know what it was. And so I just said yes — because he looked like a coach to me. That was it. That was the only reason I got into financial services.
00:07:47 Barry Ritholtz: And how’d you do at Franklin Templeton? They’re a great shop — a trillion dollars. Jenny Johnson is the CEO.
00:07:54 Joe McLean: Honestly, the best company I’ve ever worked for. The transition for an athlete to do anything else is a very, very difficult thing, because the thing you have as an athlete is structure — you have a schedule, a sense of accountability, goals, a connection with a team. You have all of that. And the day you stop playing, you’re on an island. There is no schedule. There is no level of accountability. So what they gave me was — and I think you wrote about this in your first book — the first thing Jim Escobido told me, he was my manager at Franklin Templeton, he said, “You don’t know nothing about nothing. And the sooner you learn that, the sooner you’ll be curious and start having this level of intellectual curiosity.” I hold onto that every day. It’s one of the great gifts he gave me. And what I got to do at Franklin Templeton was spend six years in a car — I think I drove over 400,000 miles. As a wholesaler, all over the state of Pennsylvania, all over Arizona and Northern California — those were my regions — doing hundreds of rubber-chicken dinners. I wasn’t the advisor; I was working with the financial advisor. And I got to meet hundreds and hundreds of people going through different situations with their money. I learned from all these other people. It was an awesome experience.
00:09:14 Barry Ritholtz: So I want to roll back a moment. You described the structure of being an athlete, and you gave me six bullet points. They sound like they’d be useful for anything. Run through those bullet points again.
00:09:28 Joe McLean: So you have a sense of accountability. There’s a schedule, a structure. Every day you wake up knowing what the common goal is — both as an individual and the role you play. And there’s a level of expectation as to what you need to accomplish, not just in one day, but one month, six months down the line. You have the NCAA tournament, you have all these things going on that have longer-term goals, but you’ve got to have a day-to-day discipline to execute on that. When you transition, it’s all gone.
00:10:04 Barry Ritholtz: Well, that structure, that setup, sounds like it can be applied to any endeavor in life — any organization, especially where you’re working with other people.
00:10:15 Joe McLean: That’s right. And I see a little bit too much where younger people jump to become an entrepreneur. I get the premise — wanting to be an owner of everything you do, quickly. But there’s a level of foundation and humility that can be accomplished by going and seeking out another environment that provides those tools for you.
00:10:38 Barry Ritholtz: So you’re a former college player, a former almost-pro player. What did you learn shooting hoops that the CFP or CFA curriculum simply can’t teach?
00:10:54 Joe McLean: Perseverance. This is something I’m trying to teach my kids. I learned to fail and really enjoy it. For a while I was failing and not reflecting on why I failed. People use that term a lot — “failure’s a good thing.” It’s the best thing to have in my life. It’s not the failing part; it’s what you learn from failing that really is effective. And the idea that you’re willing to bet on yourself at all costs, no matter what. If you think about that as an athlete, the mindset is, “I’m willing to do whatever it takes. I’ll go broke to try to get this done.” I have been broke. “I’ll take as many risks as I possibly can take. I’ll fail, fail, fail.” Those are not necessarily great attributes as an investor, in terms of translating that mindset. So as an advisor, you have to appreciate where an athlete’s coming from, and actually make them aware of those traits — they’re great qualities to have success in your craft, but they may not be great qualities to have when you start thinking about financial advice and investing.
00:11:59 Barry Ritholtz: So let’s talk a little bit about athletes as clients. You somewhat famously won’t take on a new client if they don’t save at least 60% of their basketball earnings. I’m curious — how’d you come up with that rule? How many potential clients turn you down? How many clients do you have to turn down? Tell us a little bit about the genesis of that. It seems to make sense. What’s the average NBA career — seven years, something like that?
00:12:30 Joe McLean: A little bit less than that, probably.
00:12:31 Barry Ritholtz: All right, so it makes sense. Tell us where this rule came from.
00:12:36 Joe McLean: It came from learning from my early mistakes as an advisor. I was willing to take anybody as a client. That’s the one thing, if I looked back, I wouldn’t have done. But you’re building a business, you try to get revenue, and that happens — everybody does it. How I came up with the measurement was a young person saying, “I want to be a millionaire.” He had an NBA contract — it was a three-year deal. And I said, “All right, well, when do you want to be a millionaire? Because here’s the money you’re going to make, here’s the taxes you’re going to pay. You can actually make that choice as to when you want to log into your account and see a million dollars.” And he’s like, “Well, what do you mean?” I said, “Well, if you save 30%, it’s going to be May 1st of 2028 — that’s when you’re going to have a million dollars.” He goes, “Well, I don’t want to wait that long.” I said, “Okay. Well, what if you did 40%? What if you did 60%?” And so what I realized is that using fear is not a great motivator for young people to make decisions. Putting it around a milestone, or a level of respect that they want to attain, does. And so for me, that became the parameter: if you want to become a client, and we want a relationship built on mutual respect, then there are some things I’m going to require. And for me, it was 60 cents of every net dollar that they earn.
00:13:57 Barry Ritholtz: After tax, after agents, after all that stuff.
00:13:59 Joe McLean: Yeah. And then on the second deal, it goes to 70%. Third deal, it’s 80 to 85%. And what we realized is we had clients talking in the locker room about how much they’re saving. Eventually — it’s messy — but about how much they’re saving. And then we would show a scoreboard report: “Hey, so-and-so saved 92% last year; you saved 74.” And he’s like, “I don’t believe it.” And then they’re texting back and forth, and it begins this dialogue. And it was awesome. It sounds strenuous, and it’s easier said than done now, when you see the level of the contracts and how much money is going in and out of someone’s life on a daily basis.
00:14:35 Barry Ritholtz: This is the exact opposite of the 30 for 30, right — the Sports Illustrated story. Eighty percent of NFL players, 70% of NBA players, subsequently file bankruptcy. Crazy numbers. How significant is that in your mind? It sounds like that sort of fearful threat doesn’t really get the job done.
00:15:05 Joe McLean: It doesn’t. If I’m talking to a 19-, 20-year-old, and I say, “You know what, three years from now, if the next number-one draft pick walks into the locker room and they walk directly to your locker — because everybody knows that you handle your business on the court and you handle your business off the court, and you’re somebody who’s respected in both the business community and the community around the team you play in.” Because there are going to be pros in that locker room, and there are going to be knuckleheads. And if you don’t know who the knucklehead is, I promise, it’s probably you. So what we want to do is teach you the traits to become that person — where someone wants to walk directly to your locker and ask questions. That versus showing them statistics of going broke. Most young people are going to be like, “I’m one in a million. That’s not going to be me.” And the reason a lot of them do go broke still is — not many athletes retire with $10 million, $15 million, $20 million. But they have significant burn rates of three, four million dollars. And so do the math. In five years, it’s gone.
00:16:12 Barry Ritholtz: Divorces are expensive. Child support is expensive. There are a lot of friends with business plans — that could be an expensive can’t-miss. By the way, everybody in that locker room probably, statistically, is one in a million. How many people play in the NBA?
00:16:31 Joe McLean: Less than 400.
00:16:32 Barry Ritholtz: All right. Just 350 million people, almost by definition 350 people are one in a million. It’s kind of amazing. The other thing you have your athletes do is try to save two years of cash. That’s a quote of yours: “Athletes need two years of cash as a buffer.” How do you sell that idea to someone who just signed an eight-figure, multi-year deal?
00:16:59 Joe McLean: Well, you get a chance to show — especially in the early days — the rules evolve over time, once someone has shown their level of professionalism with their money. So early days, there’s that three-bucket strategy I’ve always put in place: that safety-and-security bucket you’re referencing. But that’s the first time someone’s learning what an NBA or NFL or MLB contract looks like. Like, “Here’s the deal I just signed — but what are all these red numbers that go through it? Who’s FICA?” and all these terms. And they see what a $10 million contract really is. It’s much less than —
00:17:35 Barry Ritholtz: Ten million.
00:17:36 Joe McLean: It’s much, much, much less. And then in the NBA there’s another tax — it’s like a jock tax — that they may or may not get back, based on basketball-related income, which is another 10% attached to these things.
00:17:45 Barry Ritholtz: What is the 10% jock tax?
00:17:47 Joe McLean: So there’s a tax — everybody in the NBA gets it; it’s up to 10% — and it’s related to the agreement the players have with the owners, that they have to get up to 49% of a number, of a revenue. And if the owners don’t get that number, then they get to dip into the cookie jar and take that basketball-related income and put it in their pocket. Most of the time, the players get 65% of that back. But in our budget, we budget as if you’re never going to get it back. So it’s a nice cherry on top at the end of the year. But when you think about paying taxes in every single state, and sometimes city, that they play in — whether it’s the New York Knicks or the Golden State Warriors, you’re paying a much higher level of tax. So going through that whole experience for the very first time is —
00:18:34 Barry Ritholtz: Well, the Toronto Raptors — even higher.
00:18:36 Joe McLean: Exactly. It’s startling. So it’s helping someone pre-experience what it’s going to look like and feel like to get paid for the next three years. Because we’ve seen the movie over and over. I’m just trying to show you the movie. Your story is going to be different from everybody else’s, but there’s going to be common ground. It’s just for you to pre-experience and understand it, and then to put your own goals and milestones on top of that.
00:19:00 Barry Ritholtz: Explain the three buckets. What are the three buckets you discuss?
00:19:03 Joe McLean: So there’s the safety-and-security bucket, and that typically is your cash to support at least 24 months. Because in the NFL, you may get paid just during the season; Major League Baseball, maybe six months; the NBA could be over a 12-month period. Everyone’s cash flow is different. So I want two years of seasonality to support your lifestyle inside the safety-and-security bucket. If you buy a home, it has to be necessary — a home where you want to live, not necessarily where you play. Quite often someone gets traded multiple times, they’ve bought homes in multiple cities, and now you’re trying to sell a house in Milwaukee when you’re playing in Dallas but you really live in Florida. So just put the house you want to live in long-term in the safety-and-security bucket. And typically we’ll buy that with no debt, because I don’t know when the next contract’s going to come once you’ve filled that bucket. The second bucket is the growth bucket. This is where you start to understand how money works for you. In theory, all I want young people to understand is: if you get 24 paychecks from the NBA over a 12-month period, our goal by the end of your contract is to find 24 other ways for you to get compensated. It could be in bonds, it could be dividends, it could be real estate over time. However, inside the growth bucket, for the first contract of their life, 85% of it has to be liquid. It has to be liquid. Because quite often, when I was researching young athletes, they were far too illiquid. They were investing in private deals. They didn’t know the value of it. It wasn’t supporting their lifestyle. And then all of a sudden they didn’t have the safety-and-security bucket, and they had to sell everything — and most of it wasn’t worth anything. So it’s no genius asset-allocation strategy from Yale that I came up with. That’s just life. And having someone prove to us over time that they know how to save and they’re responsible with money — so they can reserve the right for the third bucket, which is the dream-and-entrepreneurial bucket.
00:21:01 Barry Ritholtz: So what goes into that?
00:21:02 Joe McLean: That could be setting up a business. I throw venture capital and private equity over there — early-stage opportunities. It could be the second car — I don’t care what kind of car you get. I don’t care what kind of watch you buy — you just get one. If you want another great car, sell the other one and get the next one. But that extra bucket — it could be 5 to 10% of your life that sits over there. Now, when you put a safety-and-security bucket, a growth bucket, and a dream bucket in front of a young person, which one do you think they want to fill first?
00:21:41 Barry Ritholtz: Well, the dream bucket, of course.
00:21:42 Joe McLean: We all do, right?
00:21:43 Barry Ritholtz: That’s the fun one.
00:21:45 Joe McLean: So the discipline is, you’ve got to fill the first two before you reserve the right to be an entrepreneur or to fulfill that dream. Because part of what we talk about a lot is: live the dream that you’re playing right now. Don’t try to go out and establish all these other things and crafts. Focus on what you do well — because this, as you said, seven years or less, could be the greatest earning capacity in your entire life right now.
00:22:10 Barry Ritholtz: Really, really fascinating. Coming up, we continue our conversation with Joe McLean, discussing why he launched a boutique asset manager for athletes. I’m Barry Ritholtz, and you’re listening to Masters in Business on Bloomberg Radio.
00:22:41 Barry Ritholtz: My extra-special guest today is Joe McLean. He is known as the money whisperer to professional athletes. Let’s talk a little bit about how you got that title. You were a wholesaler for mutual funds at Franklin Templeton. What led you to launch a boutique asset-management shop catering to star and professional athletes?
00:23:04 Joe McLean: Well, I went on from wholesaling, and then I went to two other companies — Lord Abbett, and then AllianceBernstein. And AllianceBernstein at the time launched an Advisor Institute. There were 300 advisors at Bernstein who were bringing in a hundred-plus million in assets every year — a highly dedicated and focused team. So I went out and trained financial advisors on how to build a business and work with centers of influence. And I met another mentor in my life — a former minister who’d gotten a master’s in neuro-linguistic programming and understood how to communicate effectively with people. I spent two years on the road doing that, and then eventually became an advisor at Bernstein. A bunch of old teammates — I was less than a year into my financial-advisory career — came up to me when they were getting ready to retire. And they said, “I’ve been watching you. I think you’re in that money thing. Can you look at my stuff?”
00:24:05 Barry Ritholtz: That money thing.
00:24:06 Joe McLean: Yeah.
00:24:07 Barry Ritholtz: “You do that money thing,” right?
00:24:08 Joe McLean: That’s what they said. And these were 32-year-olds. Some had made over a hundred million dollars. I had not grown up with any wealth, but now I’m 15 years into the career and have learned from other families — and obviously the companies that taught me things, and being on the road — and I realized: no one has ever sat you down and walked through the level of planning that would be required for this level of wealth, to prepare you at age 32 to live off this money.
00:24:37 Barry Ritholtz: That’s astonishing.
00:24:38 Joe McLean: There was no class we ever took in college. And even if there was a class, you probably wouldn’t have paid that much attention to personal finance and investing. And sports and wealth was not something anybody was really interested in. I heard it from other firms who said, “I don’t want to get involved with athletes. It’s just babysitting.” Back then there were no sports-and-entertainment divisions at wealth-management firms. Nobody was involved. So I went to Bernstein and said, “This is it. This is where I want to be. I’m going to focus the whole rest of my life on this. I’m going to be a coach, but do it in finance.” And it was something they were open to, but not interested in — because it was way beyond investing. It was personal finance and cash flow and budgeting and creating a protected circle. Because there are so many things that could touch someone’s money. It could be the car guy, the shoe guy, the jeweler, the family — that all needed to be controlled, and put the scoreboard up financially as to what’s required to have success.
00:25:42 Barry Ritholtz: That sounds a lot like a traditional family office.
00:25:46 Joe McLean: I had no idea what a family office was at that time, but I was identifying that this was the need. So long story short, it couldn’t be done at a traditional wealth-management business. It had to be an RIA, at the time, for me. And so that was the move to start Intersect, which was heavily focused on personal finance and family office. And I was still learning the game, too. The contracts weren’t as big as they are today. But I remember being in the 2011 draft, and I think I was competing against two other financial advisors — maybe. Nobody was really interested in this industry.
00:26:25 Barry Ritholtz: That’s unbelievable to me. So at 11 people, you’re managing $1.7 billion for about 50 clients. How did that grow? And when did you start to hear from people thinking, “Hey, this might be a good tuck-in into a bigger shop”?
00:26:42 Joe McLean: That happened all in less than seven years. In sports, I realized a couple of things. One, I didn’t want a client base that was only athletes. You had to pass the test of a 50-year-old business owner who was going to ask more sophisticated questions, who was going to challenge you to make sure you created a process, a plan, and a portfolio sophisticated enough to support his or her needs. So this became a mutual-admiration club of entrepreneurs, business owners, and athletes. A baseball player wants to talk to an NBA player and a golfer, and so on. It was a great community built in there. And that’s how all these other sports came about. I was a classic case of high growth trying to keep up with operations. So I was constantly taking my own capital and reinvesting, trying to stay up with the support. And that’s when I had someone come up to me — I was trying to find an investor just to help me out, because I couldn’t support it myself. And that’s when I was introduced to MAI, which, unbeknownst to me, was a very quietly built family office for athletes, dating back to Arnold Palmer — Mark McCormack were the first owners and clients of the business.
00:27:59 Barry Ritholtz: Client-owners. That’s pretty savvy.
00:28:01 Joe McLean: Yeah. Mark McCormack was, for sure, the OG in the sports-agency world. His focus was to take an athlete to an entrepreneur, to an owner of everything they did. And famously, he got Arnold Palmer — Palmer did handshake deals on just about everything he ever did. He had a handshake deal with Wilson, and Mark saw the value of what Palmer was doing for that company and was able to renegotiate it. Most people don’t. Wilson was actually a meatpacking company way back when. A banker came in and saw that it was undervalued, because they weren’t utilizing the entire cow. And they started taking the hides and making footballs and basketballs. And they extracted extraordinary value out of that. It eventually became a sporting-goods and equipment company. So they were very savvy when they did that deal with Arnold Palmer, and McCormack came in and unlocked all kinds of value for Palmer. And so when you look at athletes now, they talk about becoming an owner of everything they do — this is something they did. This is 1973, ’74.
00:29:11 Barry Ritholtz: I kind of remember Arnold Palmer designing golf courses and putting his name on them and getting fairly well compensated for that. Am I recalling that correctly?
00:29:20 Joe McLean: He did that and a lot more — the royalty rights, the drink. And that umbrella — that iconic logo he has. If you’re in the golf world, you know that’s Arnold Palmer. He was the one who famously told every athlete, “If you’re going to put your signature on something, make sure people can recognize who you are.” And I know Peyton Manning and others have taken on that banner. He was a trailblazer, very early days. And his level of wealth was extraordinary — it would rival the likes of Stephen Curry and Kevin Durant as you see today.
00:29:55 Barry Ritholtz: And the other thing about golfers — the successful ones have a much longer career life, and then they start playing in the seniors for another 20 years.
00:30:05 Joe McLean: Yeah. There’s nothing like golf — it has a completely different level of financial planning, because there are no guaranteed contracts. If you win a tournament, yes, you may get a year or two of your tour card, but if you don’t, and you’re missing cuts, then there’s no money. It’s one of the most difficult sports to survive. The successful ones, obviously, as you said, could have a 30-, 40-, 50-year career.
00:30:30 Barry Ritholtz: But it’s a winner-take-all.
00:30:33 Joe McLean: It is. It’s very difficult.
00:30:33 Barry Ritholtz: So MAI acquires Intersect. After the acquisition, you go from founder-CEO to managing partner, running the multifamily office inside this larger platform. You spent a long time building up culture and trust. How do you maintain that when you’re tucked into a larger shop and a very different brand?
00:30:59 Joe McLean: The good thing was — and it took a long time for me to figure it out before I made a decision — the firm was a service-oriented business. It wasn’t a business that was providing services; it was service-oriented. That was very different for me, because I didn’t come in with any high level of business prowess. I was a service provider. I still am. I think there’s nothing beneath me in terms of what’s required to serve a client and the people around them. And they had the same mindset. It was actually, at the time, a loss leader for the IMG business. IMG would charge their 20, 30%, and they would have MAI — which was McCormack Advisors International, the acronym — as a service center to do your taxes, your bills, and build your portfolios. So they had the same mindset I had. But there was another level, as you know, of acquisitions and really growing. We had gone from $12 billion to $80-plus billion in assets. So it is difficult to maintain the culture. But it’s a very independent, fiduciary-minded world that was aligned with me. I think the evolution of where the advisors and the clients are going now is this level of partnership — because that’s what I was experiencing in my boutique. It’s not a client-advisor or advisor-client relationship; it’s a partnership. Young people don’t want to be told what to do. They want to be given information to make better decisions — but don’t tell me what to do. So I’ve learned a lot in that culture. That’s where, now, the term “family office” is everywhere. That’s how you’ve got to build it going forward.
00:32:34 Barry Ritholtz: So I love the distinction between simply managing money — this “money thing” your friend asked you about — versus managing wealth and all the related services. Is that effectively the evolution you’ve gone through, from Intersect to MAI?
00:32:55 Joe McLean: A little bit. I would say MAI and the rest of the industry are coming around to how we’ve serviced athletes — and not just because they were athletes, but because they were young people. The industry is trying to turn toward how to service the next generation of wealth, and this transfer of wealth that’s happening from the baby boomers. If you look at the history of advice, it was really built on the backs of the baby boomers. I always look at 1981 — I think there were six or 700 mutual funds to choose from. And all of a sudden it was this hockey stick. It just exploded. And what happened? The baby boomers were turning 35, which tends to be the age where you finally have some money to spend and invest. And then you look at this explosion, and the value proposition to that marketplace was simply access — access to the capital markets. So I always tell young people: if you ever watched The Pursuit of Happyness, the great movie — Will Smith cold-calling — he was just giving you access. And then it became about alpha, generating — “How is my black-box research better than this person’s?” And then it became about spending and income strategies in retirement — that was the third one, all satisfying to baby boomers. Now the value proposition has flipped. It’s access, not to the publics, but to the privates. And it’s spending and income, not in your retirement, but in your entire life — managing that lifestyle. These are things we’ve done from the very beginning, because there never would have been a dollar to invest if I didn’t control the cash flow.
00:34:27 Barry Ritholtz: Really, really fascinating. You talk about dealing with younger people, especially athletes — we’ll get to college athletes in a little bit. How do you get a young person to understand that owner mentality, both from a risk perspective and a compounding perspective — especially today, when they’re always connected, there’s so much going on, so many speculative distractions? How do you get them to think like an owner, and not like a simple player, day by day?
00:35:04 Joe McLean: Day by day, really.
00:35:08 Barry Ritholtz: It’s a long game.
00:35:09 Joe McLean: There’s no level of putting a Monte Carlo analysis in front of someone and showing them 20, 30, 40 years out what the compounding effect could be. It looks nice, but there are behaviors and discipline that have to be created day by day, month by month, over time. But if you gamify it, it works. That’s the aspect of putting the scoreboard up — are you winning or losing each month? And the one thing — if you look at contracts today in sports and how big they are — as you know, with anything, with great abundance typically comes less discipline. You see a lot of people with great talent, but they don’t necessarily work that hard. But if you work hard and you have talent — tough to beat. It’s almost impossible to beat. And so that became my investment philosophy, even with young people or old people. When you think about the laws of physics versus the laws of finance — think about this abundance. The laws of physics say, I’m trying to cross the creek, there’s a log I’m going to walk on. If I take my eye off that log, there’s instant feedback — I’m going to fall in the water. The laws of finance say, if I have an abundance of money going out of my life, and I take my eye off my money, nothing happens. There’s no immediate feedback. American Express doesn’t call and say, “Hey, you just spent $55,000 this month — slow down.” No — they’re giving you more benefits. The laws of finance give you no immediate feedback. So the philosophy has to be creating a standard of what you’re going to focus on in the future. It could be a month from now — let’s just win this month, and then let’s win the next six months. And all of a sudden, now we’re winning for years. But until you become aware of that, most people don’t have success with it.
00:37:12 Barry Ritholtz: Fascinating stuff. Coming up, we continue our conversation with Joe McLean, managing partner at MAI Capital, discussing what it’s like to advise athletes and entertainers on their finances. I’m Barry Ritholtz, and you’re listening to Masters in Business on Bloomberg Radio.
00:37:43 Barry Ritholtz: My extra-special guest is Joe McLean, the managing partner at MAI Capital, where he has helped build not only the firm’s family-office group but its sports-and-entertainment division, serving hundreds of professional athletes and entertainers. So that sounds like a very fascinating group of people to work with. I want to start by thinking about what’s going on at the college level: name, image, and likeness. This has become a giant business. Suddenly you have 17- and 18-year-old phenoms with potentially seven-figure contracts. What’s it like having a conversation with a suddenly wealthy 18-year-old?
00:38:36 Joe McLean: And by the way, it’s in high school now, too — people are getting sponsorships in high school. So it’s a —
00:38:42 Barry Ritholtz: A 16-year-old. Even worse.
00:38:45 Joe McLean: You know what’s interesting — I was blessed with four years of Coach Lute Olson at the University of Arizona, and an extraordinary network of alumni and teammates I got to know, or who were also coached by him. So I see the benefit of staying for four years — not jumping around school to school. At the same time, I’m trying not to sound like I’m 52 years old and say, “Back in the good old days, this is what we did,” because we weren’t getting contracts offered to us for $1.4 million. I just looked at — there are research services out there for each of these sports — I looked at one for a player who averaged 5.6 points a game this year. But they’re projected to have success, and they’re going to get $1.8 million next year to go play as a sophomore in college. And that’s extraordinary. So how do you pass up going to another school for those types of things? It’s really getting them to sit down and think about some things that are important besides money: their college experience, who’s the coach you’re going to be playing for, does that match the style you think you could have success in? Then, outside of that, the financial advice that’s required — “Hey, you’re now a 1099 contractor. There are no taxes taken out of these deals.” So you can’t just spend a hundred percent of it — you owe money to the government. And that becomes the whole lesson of gross versus net, and setting up some success. The good news is they’re learning these life lessons before they become a pro. Because what we also remind them is that every NBA, NFL scout is watching how you’re reacting to this money. If you get a million dollars and you go buy a Ferrari — which happens — they’re going to put that on their board: this is someone who may not be responsible when we give them $10 million. So they’re getting a window into the human being, as to how they may react once they turn pro. These are all conversations we’re having much, much earlier. But I think it could be a good thing long-term. I know, as a college sports fan — everybody says, “I don’t like these portals,” and I agree with them. But as a young person with opportunities, they’re going to be smarter, they’re going to want to learn faster, and there will be more successful outcomes than less.
00:41:08 Barry Ritholtz: That’s really fascinating. The obvious things that are potential minefields — they seem to be getting good advice and avoiding them. And it sounds like a lot of the college athletes getting big paydays are making better decisions than poor ones. Is that your experience?
00:41:30 Joe McLean: I think so. And by the way, I think 90% of these NILs are probably a hundred thousand dollars or less. They’re much smaller deals — by the hundreds. It’s reminding them — if they don’t have a base around them, that professional locker room we talk about — first and foremost, the number-one priority is to be a great teammate. Because we’ve seen the scenarios where the quarterback makes $2 million and is disrespectful in the locker room, and now all of a sudden nobody’s blocking for you. That will happen.
00:42:06 Barry Ritholtz: We saw it in the Super Bowl this year.
00:42:07 Joe McLean: Exactly. So if you don’t think through those types of things and be aware of it — maybe you want to contribute to that community and create a donor-advised fund with some of this money, and give it away, and bring awareness to what your brand is. Because your brand really is not what your social followers are. It’s being a great teammate, a great human being, responsible. You can have all these extraordinary experiences, say, in the NCAA tournament, but if you’re a knucklehead off the court or off the field, there are going to be consequences.
00:42:42 Barry Ritholtz: So let’s now move into the pros. But we’re not talking about 52-year-olds in basketball — you’re 23, 24, 25, early in your career. I’m curious about a couple of things. The first: you have a day like last week, where the market’s melting down. A 25-year-old guy in the first year of his second contract calls up and says, “Hey, are we okay?” How do you manage clients who are perhaps a little freaked out by the news flow?
00:43:16 Joe McLean: Over time, for me, the benefit has been introducing them to other people besides myself — first and foremost, other professionals in the markets and other asset classes, who they can get on the phone with and understand what the facts of the case are versus the noise around it. And typically every scoreboard we have is projected out through their entire contract. So what are the things we can control versus the things we can’t control? I always go back to that. Yes, the market’s down — let’s say it’s down 10%. What are the things we can control right now? We can control our spending, our decision-making, and our attitude. So that may be an opportunity — let’s look at our spending; maybe we dial it back so we want to invest more over time. It’s opportunistic. These are all very rational things that, as you know, most humans become very irrational about. And the more I can get someone to talk about their emotions, the more they move to a rational state. So it’s just talking out loud — let’s talk through this. A lot of these athletes, over the last couple of years, really haven’t been through a major market.
00:44:23 Barry Ritholtz: Fifteen years of bull market.
00:44:25 Joe McLean: When it’s been really good. I remember, early days, this happened, and I had one player liquidate all their 529 plans because the market was down 15% — and that was, obviously, one of the mistakes, the consequences of that. But if you don’t go through it… I was a benefactor of losing all my hard-earned money in Europe in 2000. I was investing in mutual funds at $10 that went to a hundred dollars in these biotech funds, and then March of 2000, everything went to zero. So it was a lesson I learned early — not to have concentrated all in one asset class. So most of the clients are fairly diversified.
00:45:11 Barry Ritholtz: So let’s hold the 23-, 24-year-old aside and talk about a 25-, 26-year-old with a max contract — their second contract. You don’t think of a 26-year-old as a potential family-office client, but at that level of income, that level of wealth, it kind of makes sense. Is this the right model for those athletes, for those professionals?
00:45:41 Joe McLean: A hundred percent. So if you think about what you’re describing — a 25-, 26-year-old on a max contract is probably making over $40 million a year. Let’s talk through a couple of things that are happening. It’s a guaranteed contract if you’re in basketball or baseball, even hockey to that extent — but it’s not guaranteed for death.
00:46:04 Barry Ritholtz: But it is for injury.
00:46:05 Joe McLean: It is for injury, but not for death. So there’s life-insurance planning involved, where both the team is trying to get coverage on that person — for their first $30 million — and then you’re trying to get coverage. And if you have big endorsements, the Coca-Colas and Gatorades are all trying to get coverage on you as well, to protect theirs. So there’s a level of sophistication they’ve got to start thinking through from a risk-management standpoint. Again, back to the three buckets — they still remain for the rest of their life, so you’ve got to keep filling them. But now it gets complicated. What’s the goal here with this money? Is it just to save it and sit on it? Or now they’re getting access to really interesting opportunities — they want to maybe own a team someday. So this is the —
00:46:55 Barry Ritholtz: Third bucket.
00:46:55 Joe McLean: Right. This is the entrepreneurial one, where you’ve got to keep filling the first two and always know what it costs to be you. That’s always January 1st — did you know what it costs to be you? And how do we make it cost a little less to be you, if we can be smart with some of the savings in all areas? So what do we want it to cost to be you when this contract’s over? Again, back to that burn rate — how much you’re going to spend in retirement, because I’m assuming you’re never getting another deal. So is it $2 million a year? Is it a million and a half? What’s the number we think you could live comfortably on? And obviously, when you’re 35 years old, this money has to last much, much longer. So just going through that level of planning, and giving them information so they can make better choices. But that is when this entrepreneurial bucket really kicks in. They’ve established a brand as a great player — performance is the number-one factor of their success financially — however, now there’s an opportunity to develop something that could be sustainable for 30, 40 years as an entrepreneur. And that’s where we start identifying what philosophy they want to have in that sector.
00:48:02 Barry Ritholtz: So you mentioned death or injury. I’m curious about your take on the most — or the least — appreciated risks on a modern team roster. Is it injuries? Is it lifestyle creep? Is it that entourage that could be a bad influence? “Deal flow’s in the DMs” is a line I saw that cracked me up. What do you think is just bad mojo that potentially derails a client?
00:48:35 Joe McLean: Well, a couple of things. You mentioned risk and injury — you cannot avoid this. There is a way to protect yourself over time. At this point, at this level of wealth, at the size of these contracts, you have to have your own doctors, your own trainers. You have to get information that comes directly to you, not through the team to you.
00:48:55 Barry Ritholtz: So we’re talking nutritionists, trainers, physical therapists, massage therapists — straight down the line.
00:49:02 Joe McLean: And they all have to report to the client, not to the team. The team has these people, and they’re great people, but they work for the team. We’ve had situations where clients got injections, and it killed cartilage in their hip, and it eroded over time. And all of a sudden they’re in a situation where they may not get the next deal. So at a max contract, someone’s going to be spending somewhere between $400,000 and a million dollars a year into their body.
00:49:32 Barry Ritholtz: Wow, that’s unbelievable.
00:49:33 Joe McLean: Yeah. And if you think about the benefit of that — players are playing to 35, 40 and beyond.
00:49:40 Barry Ritholtz: I look at Tom Brady — no business playing into his forties, and playing fairly well. That has to be the result of all that self-investment.
00:49:50 Joe McLean: No doubt. There’s a track record there that others can turn to — LeBron James being one of them. They see the value in that investment, and they also see the risk of not investing in it. I’ve had these discussions on the first contract, when I look at — because I see the personal P&L on everybody when we’re paying all their bills — and I could see, “Are we really still going to McDonald’s? You’re crushing fast food constantly.”
00:50:19 Barry Ritholtz: But at 23, aren’t you kind of immortal? How do you get someone who’s been the biggest, fastest, strongest guy everywhere he went to realize, “Hey, this is a rusty bag of bolts if you don’t take care of it”? How do you get a 22-year-old to understand you’re not immortal?
00:50:38 Joe McLean: You show them that if you’re in the NBA, and you’re a draft pick today, and you get to your fourth contract — assuming a 5% growth rate of the salary cap — you’ll have grossed a billion dollars in contract value.
00:50:54 Barry Ritholtz: Get out of here. That’s unbelievable.
00:50:56 Joe McLean: A billion dollars. Yeah. So what are the things you can do now to be around in your fourth deal? It obviously extends beyond being a good player.
00:51:05 Barry Ritholtz: That’s four-year deals or longer?
00:51:08 Joe McLean: Between three and four-year deals. So if you’re 21, by the time you’re 31, 33, depending on your contract cycle, you could have grossed a billion dollars. That’s where the Cooper Flaggs of the world are trending toward — Jalen Rose, Jayson Tatum — that’s where they’re trending.
00:51:26 Barry Ritholtz: Wow. I was courtside for the Lakers game against the Knicks last year. And what is LeBron — 38? He was, last year. He’s amazing — just a force of nature. And that doesn’t happen by dumb luck. That looks like a lot of work.
00:51:48 Joe McLean: My legs were tired in the fourth quarter when I was 21 years old.
00:51:52 Barry Ritholtz: It’s extraordinary what he was doing. He was faster than everybody out there, other than maybe one of the point guards. And he’s a monster — when he’s in the paint, you are not stepping in front, you’re not taking that charge. You’d wake up next Tuesday.
00:52:06 Joe McLean: The old-school guards, back in the day, would play their way into shape the first 20 games — because, lord knows what they did all summer. Athletes’ summers now are just as physical and difficult as the seasons, in terms of preparation.
00:52:21 Barry Ritholtz: That’s fascinating. There’s a quote of yours I really like: “The number-one trait of a great advisor is being willing to get fired.” Give us an example of what leads someone to get fired, when you’re delivering the cold, hard truth.
00:52:40 Joe McLean: Let me give you one where I almost got fired first. This was one of the most important clients in the history of my career. And I thought I was doing the right things — and I still, today, think I was, but I was doing it the wrong way. This was a situation where there were a bunch of knuckleheads surrounding the client. They were going to really affect that person’s brand off the court or field. And it was really starting to irritate me. So I decided to take it into my own hands and address it personally with them, with the friends and with the family members. I got into everyone’s face, and I was ready to take them down. Because when I look at doing trust planning for a client, I know who they love — that’s who’s in the trust, literally — and who we’re going to take care of financially, and the ones that are outside the circle. Most of them were outside the circle, and they were really affecting this individual. So I was going to try to take them out — but do it verbally. And so I addressed it, and all of a sudden I got called to a meeting with the client. And they came at me and said, “Don’t you ever come at my friends. If this ever happens again, we’re never going to work together.” And for me, this was the first time we were having some conflict, and I was ready for it. I was excited to have this conversation — like, let’s get real about what’s happening. And even when you don’t know it’s happening, the person was shutting down more and more. They weren’t ready for conflict. So if you’re going to say a great advisor is willing to get fired, you also have to prepare your clients for conflict — healthy conflict. I realized I never prepared to have this conversation with someone where we’re going to be brutally honest with each other. So the two traits I found you have to have to have great professional conflict: you have to have mutual respect, and you have to have compromise, and you have to have these conversations in advance. So now I have them in advance: “Hey, there are going to be times when we disagree, and I’m never going to blow smoke. You’ve got tons of yes-people in your life. But I’m never going to disrespect you, so don’t disrespect me. And at some point I’m going to win, and sometimes you’re going to win, in terms of a level of compromise.” If I’d had that, I think this would have gone better. It did not — it went really bad. We were able to repair it over time. And I’ve had situations, unfortunately, where maybe I didn’t get the client early enough to create behaviors — gambling, mental health, all these aspects that are all over life and in the world. They’re all over sports, too. And there are just some people you can’t save. So those are some unfortunate situations where we did have to fire somebody.
00:55:37 Barry Ritholtz: So that raises a really interesting question. Everybody walks around with these devices, and these devices are everything from social media — which can be a minefield — to all the gambling apps. And even if you’re not touching DraftKings, between Kalshi and Polymarket, or Robinhood, you could speculate, gamble, just go down a rabbit hole. For someone with a lot of cash burning a hole in their pocket, this always-connected, always-on world could be really dangerous. What sort of advice are you giving clients who have these seven- and eight-figure contracts?
00:56:22 Joe McLean: Those are the ones where you use a little bit of fear, and start sharing some stories that have happened to others — potentially getting blackballed. Even investing in or betting on your own sport — just getting anywhere near attached to it — is something that could affect the growing wealth you could create over time. There’s a level where you can scare them with that. And for all of us — gambling and sports, and the amount of revenue — I don’t think it’s a great thing. It really isn’t.
00:56:55 Barry Ritholtz: No.
00:56:55 Joe McLean: It’s pretty awful. You have a whole generation of young, mostly males, that have become gambling problems, addicted to it.
00:57:00 Barry Ritholtz: Does fear really work in that — “Hey, you’re risking a billion dollars against fooling around with 10 or 20 thousand dollars”? Why? It doesn’t make any sense.
00:57:15 Joe McLean: The scarier ones are in Vegas. When you go to Vegas, or some of the other casinos, you learn for the very first time what a marker is. What Vegas created with markers is — there’s no exchange of money. You just sign your name. And inside that contract, it also says they can reserve the right to go into your bank account and take the funds if you don’t pay up. So as you can imagine, when there’s no exchange of funds and you just sign your name — that’s a rabbit hole you can go down. That’s disastrous.
00:57:48 Barry Ritholtz: There have been studies that people who spend cash versus credit cards — with a credit card you’re just swiping or tapping, it doesn’t feel like you’re spending money. When you’re counting out hundreds to buy a watch, or whatever, I can imagine the marker in Vegas has to be really dangerous.
00:58:05 Joe McLean: Yeah. Even to that point, we’ve had clients where we’ve decided to have them write every check — pay every single bill, so they feel it. So you send a checkbook — here it is. Now you have to sign it. You see exactly how much you’re paying for each of these transactions. It works.
00:58:21 Barry Ritholtz: I would imagine that’s effective. But that raises a really interesting question. The economics of being an elite athlete — you go back to the sixties and seventies, the top of the team roster really wasn’t making a lot of money. Now, across the whole industry, it’s big bucks, and the top is crazy big bucks. How has this changed the way you think about asset-allocation planning — looking at everything from safe assets, dividends, and bonds, to speculative venture capital and privates? How has the world of athletic finances changed over the course of your career?
00:59:04 Joe McLean: The first thing that’s changed the most is you have to be sophisticated from day one. If you think about when I was getting into the business, in 2009 and ’10, these contracts didn’t exist. I knew enough to get clients into mutual funds and get them to save. These contracts are very big, and they’re early, and they’re coming fast. So from a level of planning, and understanding how to build this — one of our lessons is, the next generation is watching. What are the decisions we can make now that set you up, not just for yourself but for the future? We’re not talking about going broke anymore. This is hundred-year money. So that level of estate planning exists for a 22- or 23-year-old now, which we never had before. I don’t think the asset allocation needs to change — it’s just that the entrepreneurial bucket will evolve over time. Getting someone with that founder mentality — I don’t know about you, but I love being a founder. Being a CEO is not as fun. I like having them say, “Be the CEO of your money.” Like, I want you to be the founder of your money. We don’t want the “shirtsleeves to shirtsleeves” metaphor that everybody talks about. Let’s think about that entrepreneurial bucket and where you think you could have great impact. Some of them may say, “I just want to be a coach. I just want to coach my high school team.” And I think that’s great.
01:00:31 Barry Ritholtz: Come out of the NBA to be a high school coach.
01:00:34 Joe McLean: Correct. And I think that would be an extraordinary gift back to the universe — as to your mindset and what you believe in and the give-back. It’s important to have something to fill your time. So having more meetings with people who are either executives or other coaches — whatever your aspect is — you have to start thinking, beginning with the end in mind. By the time you’re 25 years old, even though you may play until you’re 40, you can fall into that and make that transition — back to what we started with: the schedule, the predictability, the accountability. You have that professional locker room in life, established for that third bucket.
01:01:13 Barry Ritholtz: So I’m seeing more and more athletes getting involved across different sports. Michael Jordan now owns — or is an investor in — a NASCAR team, and we see other athletes buying British soccer teams. How do you think about cross-pollination from one sport to another?
01:01:37 Joe McLean: I think the common ground is just: be wary of your time. It’s very easy to look on social media and see someone owns three or four different teams — they own SailGP, they have a Formula One race team, they’re all limited partners in these things. It looks great. But just think about how you want to spend your time in retirement. Do you want to be spread out all over the world, having access to these things? Yes. But at the same time, you have an obligation to fulfill your time in these things. So part of it is: how do we simplify your life? I’m reading, now for the second time — and I’m still not good at it — a book called Essentialism. That’s the disciplined pursuit of less. I have a ton of user error in my life, where I help clients say no, but I say yes too much to doing other things. So we have to remind them: yes, you have a ton of access, but let’s be most careful of your time, and where you want to spend it. There are opportunities to own things, but to spread yourself out and be all over the world in these soccer teams — it sounds interesting, but I don’t think it’s effective.
01:02:58 Barry Ritholtz: So what do you think athlete investors are either not thinking about, or not talking about? What’s a blind spot that would be really useful for them to better understand, to have greater awareness of?
01:03:12 Joe McLean: Let me overgeneralize what’s happening in sports. We went from spending money on materialistic things to overinvesting in private things. It’s great that we’re talking about how much we’re saving, but it’s also, “I invested in this deal, and this deal, and this deal.” And as you know, no one really understands risk until they’re taking too much. At that point, you truly start evaluating what that means. So I don’t know if everybody understands yet, as an investor, that all these things we’re investing in privately — you don’t know how much it’s worth. That’s a significant blind spot for many — back to those mental traits we all have as athletes, that we’re willing to bet on ourselves, that there’s nothing we’re not willing to take a risk on. That’s not the trait you want as an investor. Again, it’s reminding them that we don’t need to take this type of risk. Some clients’ growth buckets were just in muni bonds for 10 years, until they produced enough income to support their lifestyle. But it’s a significant blind spot right now — nobody really knows what some of these things are worth. But it looks good on paper.
01:04:27 Barry Ritholtz: Yeah, to say the very least. I have to bring up your podcast, The Pro’s Pro. Your first guest was Eli Manning — is that right? What is this podcast thing? What motivated you to go that way?
01:04:41 Joe McLean: It’s this new thing. It’s just starting — it just came out now.
01:04:44 Barry Ritholtz: And what do you want to accomplish by sitting down with people like Eli Manning?
01:04:48 Joe McLean: For me, I was just hoping it’s a gift to the next generation that’s seeking information — and getting some quality information. We see now, in the NIL world, where a young person will come to me and say, “Hey, I play at Oregon, but I’m going to set up my LLC in Texas, because I have an aunt there, and I read this thing on Instagram where I could not pay any state income taxes.” There’s information out there, and it’s just not right. So this whole idea of wanting each of these clients to be the person someone walks to in their locker room and asks a bunch of questions of — the pro — I just want to interview a lot of these successful athletes that have been through it. Eli’s an example: he had to come into New York and lead a city, and understand the most important things to build trust quickly with his teammates and his coaches. There are all these built-in athletic things that are important. And then he came into an extraordinary amount of wealth, and he had to manage it. And for him, now it’s learning how to give money away most effectively. So the more I can extract information from people that have been there and done that, and share that with everybody — it’s a testament to what these individuals have done, but at the same time, we can all learn from them as well.
01:06:06 Barry Ritholtz: Creating a permanent record is so important, because the half-life of financial literacy is so short. I’ve had the same conversation every three years — “Didn’t we talk about this in 2023?” “Yeah, but I kind of forgot.” So, I only have you for a few more minutes — let’s jump to our favorite questions. I ask all of my guests, starting with: you referred to a few people, but let’s put them in one place. Who are your mentors, who helped shape your career?
01:06:41 Joe McLean: My mom, for sure. She did whatever it took to raise three boys, and then put me in the right situation to have an opportunity to be around Lute Olson. One of the great gifts Coach Olson gave us was that he made us do public speaking at school. We had to do it in sixth, seventh, and eighth grade. And then sophomore year, you start working your way into high school, and by senior year you had to speak at a high school graduation. He brought in people to teach you how to communicate effectively. I had no idea the power of that over time — once you get into the work world, and the level of confidence it gives you, while always having a high level of humility. That was a great gift, outside of all the basketball stuff, and always being prepared. Jim Escobido was the example at Franklin Templeton, who told me, “You don’t know nothing about nothing,” which was great. And then, as I began to understand the mindset, having someone like Ken Haman, who retaught me Maslow’s hierarchy of human needs — this level of safety and security that so many humans are stuck in. If we can give them a reason to say no to a lot of things, and the power of a plan, to get them to some level of connection, whether it’s human or professional — that was a great gift he gave me. But I’ve found, over time, that it’s less just mentors and more finding ambassadors for you. I see it with my kids — I have a daughter who didn’t necessarily have great confidence athletically, and then someone just took extra time to say, “You know, if you did this, this, and this, I think you could be exceptional.” And then they work with you. It’s just finding more ambassadors. That’s what I’m trying to do as an advisor — to be an ambassador on behalf of more clients. It’s super powerful. It’s not necessarily a mentor relationship, but I think the greatest gift you can give somebody else is your belief in them, even when they don’t believe in themselves. That’s the power of being an ambassador. I highly recommend it for as many people as possible.
01:08:52 Barry Ritholtz: Let’s talk about books. What are you reading right now? What are some of your favorites? You mentioned a book earlier.
01:08:58 Joe McLean: Greg McKeown — I think it’s Essentialism. That’s a great — that is the disciplined pursuit of less, and getting rid of some of the inefficiencies in everybody’s life. And you could end up doing more. My favorite book is always the one — for me, it’s whatever got you reading. I didn’t read in college. I did what I had to do to get good grades and stay eligible. And my first book ever read was John Grisham, The Firm. For me, it got me excited to want to turn the page. And now I read as often and as much as I possibly can. I just can’t get enough of it. But I always say, for those that aren’t reading: just go read anything that excites you. It could be a magazine, it could be a comic strip — but whatever gets you excited to start reading, start.
01:09:50 Barry Ritholtz: Let’s talk about streaming. What are you either watching or listening to? What keeps you occupied when you’re traveling around the country visiting various athletes?
01:10:00 Joe McLean: Binging constantly on everything — Netflix. I just watched Madison, which was great. So sad. I like a good cry. I cry more on airplanes than anywhere else.
01:10:14 Barry Ritholtz: If you watched Madison, I’m assuming you saw Landman, right?
01:10:18 Joe McLean: For sure. Yeah.
01:10:18 Barry Ritholtz: Anything Taylor Sheridan does — he’s extraordinary.
01:10:20 Joe McLean: I don’t know when he sleeps.
01:10:21 Barry Ritholtz: And he’s got another — there’s a new show coming out this month. I’m just astonished how productive he is. Give us another — what else are you watching?
01:10:36 Joe McLean: Oh my God, I can’t even remember the one I’m watching with my wife. We always have rules where we have to watch them together — we can’t binge outside. There’s one where they’re dating, and the age is like a 20-year difference. I can’t remember it. I became dumber every 20 minutes that I watched it. I rewatch West Wing, John Adams, and Band of Brothers probably twice a year. I’m in a loop.
01:11:03 Barry Ritholtz: It’s funny — I don’t remember what I was doing when West Wing was on, but it wasn’t watching TV, and it’s on my list of things to go back and watch. During the pandemic, we watched Mad Men, which I had never seen. It’s a really amazing show. Final two questions. What sort of advice would you give to a recent college grad interested in either a career as a professional athlete, or working with professional athletes in a financial capacity?
01:11:38 Joe McLean: It does help to come with a sports background — however, it’s nowhere near the most important trait. The more you can bring interesting experiences and knowledge to sports, the better. That was the example of Moneyball — a bunch of statistical nerds brought data to help drive more opportunities in sports and be more effective. So you can bring an outside perspective. However, whether it’s getting into sports or anywhere else, come in with this service mindset of “nothing is beneath you.” I had a situation one time where an honor student came in — as an early job with us — and said, “Hey, I’ve been paying bills and bookkeeping for clients for the last six months, and I was an honor student at such-and-such college. This is beneath me.” And I said, “Well, last week I was cleaning gutters at a client’s house, because it was the first time them being a homeowner, and we’re trying to teach them how to manage a home. Nothing’s beneath you.” So if you just come in built to serve, with that service mindset, you’re going to be successful at anything you do.
01:12:39 Barry Ritholtz: I love that answer. And our final question: what do you know about the world of investing and wealth management today that might have been useful 25 years ago, when you were first getting started?
01:12:52 Joe McLean: I would have listened to what Sir John Templeton, at Franklin Templeton, was giving us in some of these quotes. Like, “The four worst words in investing are: this time it’s different.” And, “Bull markets are born on pessimism, they grow on skepticism, they mature on optimism, and they die on euphoria.” I would have listened, because nothing’s changed. It’s taken me a long time to not have any FOMO when it comes to investing — but I’m there. I would have listened to a lot of his traits and quotes from back then, because obviously he had lived them before me. I just wish I would have listened in the early days.
01:13:28 Barry Ritholtz: Joe, really fascinating stuff. Thank you for being so generous with your time. We have been speaking with Joe McLean. He is managing partner at MAI Capital Management. If you enjoy this conversation, well, check out any of the previous 600 or so we’ve done over the past 12 years. You can find those at iTunes, Spotify, Bloomberg, Apple Podcasts, or wherever you get your favorite podcasts from. I would be remiss if I didn’t thank the crack team that helps put these conversations together each week. My audio engineer is Steve Gonzalez. Anna Luke is my producer. Sean Russo is my researcher. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.
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