NHL career: 1980 to 1993
Position: Left wing
Teams: Toronto Maple Leafs, Hartford Whalers and Minnesota North Stars
Where he is now: Wealth manager, Gavin Management Group, Toronto
“Never underestimate the importance of a financial plan. I make one for every client”
I learned some life lessons from managing money that I hope will help others too. First, it’s key to understand your objectives. It doesn’t really matter if an index fund is up or down. What matters is how it relates to your own short-term or long-term goals. It’s also important to diversify your investments. That means not trying to hit a home run with one hot stock. A well-diversified portfolio for the long haul is best for most investors.
It also pays to keep an eye on your advisor. If he says he’s going to do something for you, make sure he does it. Follow up and monitor his decisions. It will get you better investment results.
Never underestimate the importance of a financial plan. I do one for every client. I run the numbers and show them how they’ll never have to work beyond their hockey-playing years if they just save a fraction of their large earnings and earn even a modest return of just 2.5%. Of course, many of them tell me they have a lot of tolerance for risk, but I like to show them how they don’t need to take more risk to achieve their goals. If you wouldn’t go to Vegas to gamble away your money, why would you feel it’s a good thing to take on more risk than you have to?
For most players, life risks are often much greater than they think—the risk of being exposed to an injury, or a lawsuit, or the fact that a hockey contract may not be renewed. All of these risks have to be managed so you maintain your cash flow and stay on course to building wealth. You have to see the total picture before you can make a plan.
I never underestimate the power of rewards. Athletes are goal-driven, so I advise them to reward themselves when they reach one of their financial goals. Receiving a bonus is a great example. Using part of a bonus to reward yourself makes your accomplishment tangible. Saving and investing part of it also makes you feel like you’re doing the right thing. You can do both if you make a conscious effort to split your bonus into the pleasure portion and the investing portion.
Most players have routines and they’re diligent with their food intake and physical training. They have to apply that same discipline to financial management. If they take it half as seriously as they do their sports training—then they’ll be just fine.”