The key to achieving financial freedom is paying yourself first and investing in your financial education, says basketball star Brock Motum.
The Australian olympian who is playing at the highest levels in Europe invests in much more than just his basketball career. Unlike many professional athletes, Brock has developed significant experience in investing in equities and property, but more important have been the investments he has made in himself, his family and his financial knowledge.
Brock talked to KnowHow founder Bushy Martin on the Get Invested podcast about his approach to achieving his wealth goals.
“The biggest thing I’m investing in right now is just my time in learning about how to best to achieve financial freedom, just by reading some books, following certain people on Twitter and reading articles about how I want to go about investing my money as it comes,” Brock said.
“I have a big passion for property. I spend probably a couple hours a week I would say on realestate.com.au or the Domain app, just by browsing through properties or reading the different articles that are on their site.
“So I think property is definitely something that I want to be involved in in the future. It just needs to be the right place, right time and right strategy for me. And so right now, I’m just spending a bit of my time gaining as much knowledge as I can, so when I do decide to pull the trigger on some properties, I know the best way to do it.”
But for Brock, it was being exposed to finance from a young age that helped set up a crucial foundation for him.
“Money has been taught to me from a young age. My Dad’s always had a pretty good hold on his financials and there was probably indirect lessons he passed on to me in the way that he’d always talk about super, investing in shares and telling me about salary sacrifice and how short term is not ideal,” Brock revealed.
“And so I guess introducing me to those things and having those conversations, even when I was younger, I probably didn’t really understand what he was talking about, but I had those words and those stories in my head. And then so when I did come to understand it all made sense. And so when it was time to implement what he’d said, I’d already had that advice from a younger age. And I was a bit more financially educated.”
He went on further to explain the disadvantages people, and in particular athletes, can face by not being financially literate from a younger age.
“People that don’t have those discussions or don’t really know the benefits and understandings of how money works [are disadvantaged]. Honestly, I don’t think there’s enough education,” he said.
“I think a lot of [players], especially over here (in Europe) and in the bigger teams, they have their agents, and when they sign with their agent they get the whole package and it comes with a financial adviser etc. And they don’t really know where their money is being invested. And I think, ‘OK, they’re still ahead of the game and they have someone managing their money and investing for them’, but there are intricacies to that in understanding, one, where your money is being invested and two, how much you’re paying that person to invest your money.”
When it comes to researching and seeking advice from a professional, Brock encouraged people to take the time to get the right advice.
“I did my research on financial planners and financial advisors, and I narrowed down what I wanted in a financial advisor. And I took a few meetings with different companies and even some banks, and I learned what I did like and what was definitely a no go. And I ended up finding exactly what I wanted. And now I’m with a company that I’m happy with,” he said.
“You need to understand how your money is invested, why you’re paying and what you’re paying. And it just takes a little bit of research and a few questions to ask, and it will save you a lot of money and a lot of time. And not just that, but I think day-to-day things like credit cards and even foreign exchange rates, just being in tune with how the dollar is, that really adds up over time.”
But no matter how many different resources you utilise, one strategy remains the same for Brock – the long-term game. He encouraged investors to get started as early as possible, and to ‘pay yourself first’.
“If you can get started mid 20s or even early 30s, it’ll be a huge difference when it comes down to when you need that money and when you want to rely on that. And whatever your strategy is and your goals, the longer that you’re in the market, the better off your returns are going to be in the long run,” Brock said.
“I would say the biggest thing I’m taking is that you have a lot of expenses in your day to day living and life. But I would say when you get your cheque each month or whatever it is, set aside an amount for yourself.
“For example, if it’s $10,000 a month, set aside X amount (whatever you can do at the beginning), and then pay your bills and things that you need after that and then whatever’s left. So it’s not that when the cheque comes in, you pay your bills, and then whatever is left you say ‘ok, that’s what I’ll invest’. I think you can always find ways to spend money and there’s always something that you can buy or spend your money on. But if you pay yourself first and set that aside, that’s money you can’t touch and that’s money that’s been invested already.
“And then you make do with the rest. So I think paying yourself first is a big thing and great way to get ahead. And that’s something that I’ve learned helps a lot. It obviously helps with the larger wage you get, but I think it’s applicable to any size pay cheque if you live within your means and you stay in your own mind.”
Listen to the full interview here.
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KnowHow has partnered with the Australian Basketball Players’ Association to help basketball stars build the life they love outside of their basketball careers.