Can an ex-NFL star achieve a balanced portfolio?


by Matthew Allinson 10-20-2010 12:40 AM

MSN Money recently rolled out a new online reality series called The Invested Life. Over the next 9 months, it will feature the stories of 7 real-life investors who will be working with financial coaches to transform their portfolios and lives. Among these investors is former NFL linebacker Winfred Tubbs who played in the League for 7 seasons (Saints and 49ers) and retired in 2000. Tubbs is paired with his long-time confidant and Financial Advisor Ed Butowsky, and is on a quest to manage his money properly and have a balanced portfolio now that he is entering the married life and preparing for his daughter's college education.

Butowsky is the perfect guy for the challenge. He is the Managing Partner of Dallas-based Chapwood Capital Investment Management LLC, a boutique investment management firm that manages more than $3 billion in assets for high-net-worth individuals, including athletes and entertainers. Butowsky is a nationally-recognized expert in investment management with over 22 years in the financial services industry. He was quoted in the infamous Sports Illustrated article How (and Why) Athletes Go Broke and is passionate about making sure his clients' money gets invested the right way. In fact, he is so hell-bent on this objective that his firm offers a comprehensive and detailed forensic analysis service at no cost to pinpoint portfolio inefficiencies and root out dishonest advisors.

Tubbs, who has been living off his NFL savings and small business holdings, owns a dealership and a couple of apartment complexes. This is part of the problem according to Butowsky who says that his client has more money than he should in private illiquid investments. One of the major problems the veteran wealth advisor has seen over the years with his high-profile athlete clients is overallocation in private equity and real estate holdings.

In the video, Butowsky takes Tubbs to a steak house and uses a powerful visual of a well-balanced meal to demonstrate how he can balance his portfolio and make sure he never goes broke.

Butowsky recommends that every portfolio should have 50-60% in public securities (e.g. government bonds, stocks, mutual funds). He uses Tubb's steak to make this point.

Next up is the vegetables on Tubbs' dinner plate. They represent alternative investments like gold and silver. Butowsky recommends having about 5-10% of your portfolio in these investments.

Lastly, Butowsky puts a piece of cake in front of Tubbs and asks him, "Would you ever sit down and just have that as a meal?" He then likens private equities to desserts and warns Tubbs about the risks of putting too much of his money into this type of investment.

Nearly ten years out of retirement, Tubbs seems to have put himself in a fairly good position and is much better off financially than many other retired players. You have to wonder where Tubbs would be today if he hadn't been so lucky to run into Butowsky during his playing days.

This is a fascinating series that I will be watching closely as it unfolds. It provides valuable insight that all pros and aspiring pros can utilize.

If you want to check out more videos and blogs from both Tubbs and Butowsky, I have provided the links to their personal sections on The Invested Life website below.

Winfred Tubbs

Ed Butowsky  


Published 10-19-2010 © 2022 Access Athletes, LLC


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