On this episode of Pro Mindset® Podcast, Erik Averill, former Major League Baseball (MLB) player, sits down with host Craig Domann to discuss the challenges athletes and families face when money is involved. Erik is the co-founder of AWM, a Certified Financial Planner™ (CFP®) and a Certified Private Wealth Advisor (CPWA®). Erik is the host of Athlete CEO podcast and the co-author of PAID: How To Maximize Your Signing Bonus, Simplify The Money Game and Secure Your Future. Erik played for the Detroit Tigers and the Seattle Mariners during his professional career.
Erik has applied his experiences as a professional athlete and financial planner to help athletes develop a career plan and manage their money. His experiences as a former professional athlete and personal exposure to bad financial advice inspired him to start AWM. In Erik's own words, AWM is "a multi-family office that specializes in helping young professional athletes or founders of companies maximize their net worth." Through Erik's skills, passion, and experience, he has helped many athletes achieve a better understanding of the business of professional sports. Erik's goal is to help athletes manage their money, maintain healthy relationships with their families, and allow their wealth to be a blessing rather than a curse.
Erik describes some of the common pitfalls that athletes fall into when they have come into money. He shares that there is a common dysfunction that takes place in the family circle when an athlete outpaces his parents and siblings in the money world. The family ends up putting the athlete up on a pedestal, and he becomes the patriarch of the family. The family revolves around the player, and it messes with the players' identity and the identities of the family members. Once the athlete's career comes to an end, the whole family is experiencing an identity crisis. Erik recommends that parents keep parenting their athlete child to maintain normalcy and harmony in the family circle. "Don't stop parenting your child. We see that when the young athletes become so important in being a top athlete, parents stop being the parent in the relationship. It's dysfunctional." It is vital to maintain relationships and the appropriate family dynamics, especially later on down the road when the athlete starts his own family and is trying to maintain a healthy relationship with his wife and children.
Erik also shares that money is a magnifier. The natural disposition of the athlete is magnified by the money that they make. "Money does not come with all the skillsets attached to it, (like) how to manage it. If you're an unhappy person, you're just going to be a more unhappy person. If you're already a generous person, you're going to have more things to be generous with."
Wealth tends to bring out their true character. When a young athlete comes into money, they do not have the skill sets to manage it properly. They are encouraged to be the CEO of their wealth, but they do not have the experience or skills to succeed at this new role. This is where a player falls into financial management issues. Erik encourages athletes to be extremely careful with who they hire to assist them and who they allow into their inner circle. "You have to be extremely careful of who you let into your inner circle and understand that all titles are not created equal. Not all agents are the same; not all financial advisors are the same."
Additionally, Erik advises athletes to find someone who can help them navigate the relationship side of their life. A pastor, counselor, or family therapist can help players and assist them through the pressure they feel. Choosing to have family meetings to establish how to be successful as a family will be beneficial as well. "Early on, you should have a family meeting and say, this is how we want to be successful as a family or this is how we want to be successful in a friendship. Working through that stuff is just as important as receiving the money."
Erik also talked about being released from the Detroit Tigers and the challenge of hitting his all-time low. "My identity had been so tied up in being a professional athlete. It was like they were ripping out a piece of my soul in that conversation." Erik had to reestablish his identity and his mojo. His faith and the mentors around him helped him tremendously in re-establishing his identity. "They essentially let me have 24 to 48 hours of my pity party. Then I had to come back to the surface and talk about what was in my control. Not focus on the emotions, the what-ifs, and the assumptions, but the game plan to move forward." Erik was able to find his focus, re-establish his identity, and be re-signed with the Seattle Mariners.
Erik's interview established the weight that a player's identity holds in their athletic career. Their identity can be influenced by their wealth, family, or the challenges that they face. A player must recognize this and learn to handle it with caution. Identity is a building block to creating your own Pro Mindset®. Establishing your identity and not letting it be shaken by outside influences will bring you closer to establishing your own Pro Mindset.
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