by Irv Soonachan
I hadn’t been to see a financial advisor for a very long time, and had just filed my tax return when I met Golden State Warriors forward Anthony Tolliver. The timing couldn’t have been better.
A 24-year-old NBA player is not normally a good person to visit for financial advice, but Tolliver isn’t a normal NBA player. He holds a degree in finance from Creighton, where he was a fixture on the Dean’s List, and most importantly, he can break down investing and financial management topics in a way the average English major can understand. That’s not normal for anyone.
Those aren’t the only reasons he stands out in the NBA: His first paychecks resulted in the purchase of a Chrysler 300, not an Escalade, and the only bling he rocks are a pair of subtle (by NBA standards) diamond earrings. On the court, he got his first real NBA playing time this season for the Warriors, and made himself known by averaging 15.2 points, 8.9 rebounds, and 2.3 assists over the team’s last 16 games.
Tolliver said if his career ended he’d probably get a job on Wall Street, but luckily for Gordon Gekko it looks like he’s going to stick in the League for a while. In the meantime Tolliver gave me six very smart financial rules to start living by.
Anthony Tolliver’s Financial Management Rules to Live By:
1. Live Below Your Means
Tolliver broke into the professional ranks on a $24,000 per year D-League contract, but that didn’t stop him from saving money.
“That first year I lived like I did in college, when I didn’t have any money,” he said. “If you lived off Ramen Noodles in college, continue that. Continue to live like you’re in college. Keep doing the things you did when you didn’t have money in your pocket. Free concerts, free entertainment. Try to live like that as long as you can. Any time you go from living one way to living the next way, it’s going to be really hard to back up.”
2. Put Aside a Set Amount from Every Paycheck
“Try to save at least 25 percent of what you make,” Tolliver said. “That’s a pretty comfortable number that a lot of people can live by. If you make $40,000 per year, you can live off $30,000, and save $10,000. Figure out a way to do it — in four years you’re going to have a whole year plus some in savings. Sometimes it’s tough to do.”
Tolliver freely admits he’s frugal. Last year he made more than $250,000, but said he lived as though he was making $50,000.
3. Have an Investment Plan
Tolliver advises starting simple. At first, just put the money you set aside into a savings account. This will be your rainy day money.
“It’s not going to gain a lot of interest, but it’s something,” he said.
Tolliver set his savings account up so that he was only allowed a limited number of withdrawals without a penalty.
“Once you start putting money in the account, you don’t want it to be easily accessible,” he said. “If something happened and there was an emergency, I could get to it. But at the end of the day, I didn’t want to get to it. That was my base.”
“I made parameters,” he said. “I’d say, ‘Once I get to this amount of money, I’ll take a chunk out and put it into CDs, or whatever.’”
And finally, with NBA paychecks reliably rolling in, Tolliver started his own company: A real estate investment firm that has already made its first couple of purchases.
But for the 99 percent of us who don’t speak the language of CDs, mutual funds, and starting our own investment firms…
4. Look for Good Advice
Even if you’re not represented by David Falk or Leon Rose, there’s plenty of low-cost advice from reputable sources out there.
“A lot of banks have a financial advisor you can work with,” Tolliver said. “If you bank with them, most will do it for free. If your bank offers free services, why not use them? Especially when they’re going to help you out and teach you what to do with your money.”
5. Play it Safe
Going on E-Trade and gambling your hard-earned savings on the stock market is a bad idea, said Tolliver:
“I’m not a super risk-taking type person. I know lots of people who have gotten into the stock market at the right time with the right companies and gotten rich, but there are also a lot of people who have lost every penny they have trying to do the same thing.
“I have a lot of my money in mutual funds, which really spreads the risk around. Investing in individual stocks is something that I wouldn’t recommend unless you really know what you’re doing. It’s not for the average Joe.”
On the other hand, Tolliver believes home ownership, over the long term, is a safer investment.
“Going into real estate is the best investment you can make,” he said. “It’s pretty consensus that the market has bottomed out, pretty much across the United States. If you can get into real estate right now, it would be a phenomenal time to do it. It’s going back up, it’s inevitable.”
6. Reward Your Successes
“When you start making money treat yourself to something nice, but nothing outrageous,” Tolliver said. “You worked hard, you got that job, so you deserve it. You can’t just go through life and give yourself nothing; you have to keep yourself motivated.”
Tolliver’s gifts to himself at his career milestones have been nice, but far from over the top. The first gift for his D-League contract was new rims for his car, which at the time was a Chevy Tahoe. Another time he said he gifted himself a new stereo system.
But what about the diamond earrings?
“These were a gift from Claire’s,” he said.
“I will never in my lifetime buy real earrings, because I lose them so much,” he explained. “I know the hard work it takes to make a dollar. Real earrings this size might cost $2,000, and if I lost $2,000 I would be sick to my stomach.”
Which led Tolliver to his last piece of advice: “You can fake it ‘till you make it.”
In the short time since we spoke, I found Anthony Tolliver’s advice very useful. What do you think?
– Tolliver is a free agent this summer, but said his first preference is to come back to the Warriors
– You can’t mention Tolliver’s season without linking to one of the most mind-boggling dunks in the history of Western Civilization. But it’s worth noting that Tolliver’s overall production in that game was comparable to Amar’e’s.
– The Warriors lost one of their all-time greats recently when former owner Franklin Mieuli died. Mieuli helped the team win a title and was instrumental in racially integrating the franchise – and ultimately the NBA.