Even the Ultra Wealthy Need Smart Financial Planning

financial planning

Even the Ultra Wealthy Need Smart Financial Planning

By Alan Olsen, CPA, MBA (tax)
Managing Partner
Greenstein Rogoff Olsen & Co. LLP

How many times have you heard about an ultra-wealthy individual who has somehow managed to blow all of his or her fortune and end up with practically nothing? There are countless stories of regular people who have won the lottery and instantly gone from rags to riches, only to return to rags in just a few short years. Another common news clip is to read of a rich young athlete who didn’t know how to handle all that sudden fame and fortune and therefore has ended up broke and out of work, and sometimes even homeless.

Financial Planning Works

While these stories are unfortunate, the truth is, many of these people could’ve been better equipped to handle their circumstances with a little help, including solid and sound financial planning. For athletes in particular, generally speaking you’re dealing with very young individuals who in many cases have grown up with very little money. When they go from being worth a few hundred dollars to literally millions from one day to the next, they are not ready to handle all the perils that can come with that kind of money.

Even the Wealthy Should Plan

Many people in this situation simply figure that money is no longer a problem, so why should they worry about financial planning? After all, they have more money than they’ll ever need in a lifetime. However, just because someone is extremely wealthy that doesn’t mean he or she should shun financial planning. In fact, some might argue that financial planning is even more important for the ultra wealthy.

Big Baseball Deal

Let’s take a look at a huge deal that happened late last year in Major League baseball. Last November, Giancarlo Stanton signed what was reportedly a 13-year, $325 million deal with the Miami Marlins. That’s a lot of money. Of course, Mr. Stanton will get paid a lot of money from this deal, but he will not see $325 million. For starters, the IRS will take a cool 40 percent of his earnings right off the bat. Secondly, he is also subject to the athlete tax or “Jock tax” as it is sometimes called. That means he will be charged state taxes for any time spent playing games in other states (and some cities) who have income taxes.

Numbers Can Be Misleading

There are many other factors that come into play as well, including paying his agent somewhere in the neighborhood of 5-10 percent. His contract is also back-loaded, which means if he is not able to complete the entire deal, he could miss out on a lot of money that is scheduled to be paid out in the last few years of the contract. So, the bottom line is even though he signed for $325 million, he won’t be bringing home $325 million.

That’s Part of the Problem

This is the perfect situation for a young athlete to make big financial mistakes, without the help of a good financial planner. Without sound advice and guidance, any young person in this position is bound to think they have endless cash flow and the world at their fingertips. However, that just simply isn’t true. The money will run out quickly if a budget isn’t put in place and a financial plan isn’t followed. It’s important for Mr. Stanton, and anyone else who finds sudden-fortune to put a smart team of financial experts in place to help with their newfound wealth. That team includes a good accountant and most likely an experienced estate lawyer.

Choose Wisely

Lastly, young athletes need to avoid the hangers-on. Their financial team should consist of the right people and not necessarily friends and family members who are just after their fortunes. Long-lost relatives can often lead to long-lost fortunes as well.

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.


Alan L. Olsen, CPA, Wikipedia Bio



GROCO.com is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

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MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

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