Danny Schayes was a classmate of mine at Syracuse. His dad, Dolph, was a basketball Hall of Famer, and the apple didn't fall far from the tree.
What’s amazing about Dan is that he used every bit of his talent. There’s nothing that got wasted. The fact that he made the NBA, maybe it was a bit of a shock to many, but the fact that he was a player for 18 years was just incredible. He worked and strategized to stay in a league that was out of his league. He was an “overachiever” in many ways, but his focus and high basketball-IQ powered him through.
Going a step further, Danny is the former Executive Director of the NBA's Retired Players' Association. He's been a broadcaster for ESPN, TNT and several teams and writes a regular column for Sheridan Hoops about finance and the NBA.
If you want to understand what’s really going on off-the-court for an NBA player, you have to read Danny's new book, "Fast Broke: Learn the real reason athletes go broke, so you don't have to." I talked with him below about it. You'll even find some good tips for yourself.
Brandon Steiner: Who is this book for? Why did you write this book?
Danny Schayes: The book is for anyone who wants to be successful. When I started this project I wanted to create an education experience that I always would have wanted as a player. It didn’t exist then and in most ways it still doesn’t. The more I understood the real issues at work, the more I realized that the very same issues that work against athletes being successful are at work in everyday life. The fact that athletes lives are extreme examples in many ways make it easier to see. But the underlying forces at work become clear when you look at it.
BS: Were you smart with your money during your NBA career?
DS: I was very “smart” with my money as a player. The reason that I emphasize the word smart is that the definition depends on which side you are on. I did all the right things that I was supposed to do. I saved the majority of my income. I lived below my means. I hired quality advisors. And at the end of the day I made everyone a lot of money while I made a little. Most of the advice I received was designed to benefit the very financial companies providing me the information. At the time, I did not understand investing, generating passive income, or creating assets. I did not know how to think like a rich person. As a result I was really at the mercy of the people who did.
BS: Why do athletes fail? Why are non-athletes just like them?
DS: The biggest reason that athletes struggle is that they fail to learn how to think and act like a rich person. Step One is to assume total responsibility for your own outcome and results. Step Two is to learn enough about investing and managing money to effectively oversee an investment team and strategy. You don’t need to be a hedge fund manager, or a real estate mogul. But you need to know enough to keep from being dependent on others to do your thinking for you. Non-athletes have the same issue. Most people in everyday life delegate their most important life decisions to others without understanding how to be the owner of their own team. As a society we know a great deal about what we do at work but most people know very little about the three most important areas of their lives: money, health, and relationships.
BS: What can the league do to help it’s employees manage their money properly?
DS: One of the most interesting factors that players deal with is the question of “whose responsibility is it to see that players get educated and receive good advice?” Is it the leagues job, the union’s job, or the agent’s job? The answer isn’t always clear as sometimes the three groups are adversaries. There is a lot of competition for players attention plus pressure to keep players focused on playing. I think that players have been poorly served in the past because most of the education they get revolves around products. They try to decide what insurance policy should they buy or which mutual fund to invest in without understanding the basics of investing, financial planning, asset protection, or any of the foundation skills needed. How can anyone be expected to make good choices until you understand the fundamentals? In daily life, very few people with consuming jobs have the time or energy at the end of the day to become financially smart. It takes effort and discipline to spend time learning finance when American Idol is on.
BS: How can people help themselves?
DS: The first thing people can do is make a mental shift to take control of their lives. When that happens a whole new world opens up. In practice, they need to see the big picture before taking any specific action. After all how can you know what stocks to buy when you don’t yet know why you should own stocks or what your strategy is? Start with the big picture and work your way down. Make a purchase or investment decision last.
BS: A lot of people don’t know where to turn when it comes to coaching. They end up relying too heavily on others to manage their wealth instead of figuring out how to grow their wealth. How does someone find a great coach?
DS: Finding a great coach gets easier as you learn more. You know better questions to ask and more of what you want. It is crucial to find a coach who has the same investment philosophy that you do. That means that you need an investment philosophy. Very often a good tax accountant is a good place to start. He or she should do more than help you fill out the forms. They should be a crucial part of your planning. After all, taxes are most people biggest expense. In addition good bookkeeping and tax planning should more than pay for itself. It easy to measure how much a good accountant will save you.
BS: How do you set goals? How do you keep them?
DS: A key to setting goals is to pick a time when you aren’t rushed or in a crisis. It is the same reason why you should never grocery shop when you are hungry. A good time is to start near the beginning of the tax year so you have time to follow your plan. You also need to set up times, either monthly or quarterly, that you review your progress. Remember all coaches look at the stat sheet during the game to see how it is going. One of the best reasons to have a coach is to keep you accountable to your goals. It’s harder to cheat yourself when you have to answer to someone else.
BS: A little off the book, you have a column on Sheridan Hoops and you’re an active NBA media personality. What are your thoughts on “The State of the League”?
DS: Currently the league is in fantastic shape. It has guaranteed long term income in a new TV deal. It has labor stability. There is a new commissioner who is great for the game and a union head who is learning the job and is very qualified. Most importantly there are a large group of young stars ensuring a bright future. You have to look very hard to find something really wrong. Sure there will always be individuals to deal with be it an owner (Donald Sterling) or a player getting in trouble. But quality people are in the right places to keep things looking up.
Danny Schayes is a Director of Business Optimization at Intensity and a leader in the business of professional sports. Schayes frequently advises sports organizations in complex business matters that include contract negotiations, pricing strategy, marketing optimization, and executive leadership. Follow him on Twitter. And learn more about his new book, "Fast Broke: Learn the real reason athletes go broke, so you don't have to." at www.dannyschayes.com and www.fastbroke.com.