Inside the Wealth Preservation Playbook of Top Earners with Richard McWhorter - Ep- 568

So when I'm dealing with people that have sporadic income, right, for contracts, music advances, whatever it may be, it's a very specific conversation as to, first of all, who they are, what they're trying to do, and then their understanding of what that, what that looks like for the future. When you're dealing with family offices, when you're dealing with high net worth or ultra-high net worth individuals, that's a different conversation depending on how their income is coming in. Is it coming in through an event or whatever it may be?

When income peaks early and fame is fleeting, From Spotlight to Stability reveals the precise, innovative strategies entertainers and athletes use to build lasting legacy beyond the balance sheet. Welcome to Streams to Impact, brought to you by Steedtalker Capital. I'm your host, Dr. Allen. We often find that high-performing professionals are achieving great success in their careers, yet they're still tapped in to the cycle of trading valuable time for dollars. Furthermore, far too many find their hard-earned portfolios exposed to invisible risks that threaten their stability. At State Talker Capital, we've developed a different path. We meticulously vet operators, ensuring only the top 1% make it into our vault. This system is purpose-built to defend your capital while unlocking opportunities. Traditionally reserved only for the ultra-wealthy. Ultimately, the greatest danger isn't just a bad investment. It's the irreplaceable years of lost compounding growth you face without the proper financial infrastructure in place. So before we get started, I just want you to claim your free gift, Beyond the Paycheck: The Financial Clarity Compass to Financial Independence, and grab your copy today at www.gobeyondthepaycheck.com. stevetucker.com/beyond-paycheck. So just a brief disclaimer before we get into today's program. Streams to Impact is for educational purposes only. It's not to be construed as specific investment, financial, legal, or tax advice. Please remember that all investments incur risk and you should not invest capital you are not prepared to lose. We always encourage you to consult your own legal, accounting, and tax advisors before making any decisions. We hope you enjoy today's show, and if you do, we would appreciate it if you would please take a moment to like, share, and subscribe. With over 3 decades inside the real-world consequences of sudden wealth, volatile income, and public identity, This advisor has built a career at the intersection of money, meaning, and human complexity. Working with clients across music, sports, and entertainment, he understands that wealth is rarely just a math problem. It is an identity problem, a timing problem, and often a purpose problem. His work has earned recognition from Forbes, Barron's, and the Financial Times. But what truly distinguishes him is how he helps high-profile individuals translate peak earnings into enduring impact, clarity, and control. Welcome, Richard McWhorter, managing partner and private wealth advisor at SRM Private Wealth.

Thank you for having me today. It's good to see you.

You bet. Good to be with you. So, when someone's income explodes before their identity or decision-making framework has fully formed, What do you see happening internally and how does that psychological mismatch quietly shape their financial outcomes for decades afterward?

Yeah, so in my experience, we've seen many people that have misunderstood a large contract, a large liquidity event, And looking at what the net is after taxes and if you have representation, if you have lawyers and agents and managers, looking what that net is and then seeing what that's going to do over the rest of my life. In a lot of these cases, it's not a, you know, these are not long-term events. It could be one contract. It could be— one event. So there's a lot of planning that has to go into that. And more importantly is that understanding of not looking at the large number but looking at that net number.

Richard, before we get too deep into this, tell us about yourself and how it is that you found yourself in this advisory capacity to high net worth individuals.

So I've been doing this since I was 17 years old. I was an intern and then became a receptionist and then became a— back then we were called sales assistants. I think they're client associates now. I've been doing this since I can remember. You know, right out of high school I got an internship. So, you know, when I was a sales assistant, I had 7 advisors that I would Working for, and you learn, you listen, you picked up tips here and there about how to advise and how not to advise, which was just as important as how to advise. And then over the time period, you, you know, there's a lot of things that happen over 30 years and different situations that occur and different people you meet. And It was just being in the right place at the right time sometimes. And other times it was a lot of work that where you found somebody that might be interested in what you do and what I do and how I do things and who I am as a person. You know, there's so many different ways in which we got to the point that we're at today.

Absolutely.

Yeah.

Well, thank you for sharing that. For clients whose income is inherently episodic, tied to things like seasons and tours, contracts, or public relevance, how do you design a wealth strategy that doesn't depend on constant peak performance and yet can still remain viable throughout the person's life?

Yeah, so getting to know the person as the person, not the rock star or athlete or whatever it may be, but getting to know them as a human being and trying to understand their spending habits and their spending behaviors and their risk tolerances and trying to understand all that stuff so I can start to design something over time that is going to be forever versus, you know, for a short period of time and then hopefully something else happens. And then understanding that, you know, like for example, in music, music is different, right? So music has, you might have an event, especially back when labels would give out money. Nowadays we don't see that as much, but You know, when you look at the different revenue sources that come off of a song, and then how do we monetize that over a period of time, meaning that, you know, do we get it into shows? Do we get— how do we increase listenership on either terrestrial radio or the Spotifys of the world? And then if you're an athlete, what do you do What's your— forget about where we're at today, but what's that second win for you, right? What's that second career, or if necessary? And I would say that the majority of them in athletics, it's— there most certainly needs to be some type of second career for them. Because as much as some of these numbers are very large, As I mentioned earlier, when you look at the net of it all, and it's not forever money.

Mm-hmm.

Some of the players are, right? We talk about the LeBrons of the world and the Michael Jordans of the world and people that are making hundreds of millions of dollars. But the majority are not making that kind of money, especially on a net level. And then they don't have the endorsements and Can they do broadcasting? Can they do coaching? What does that look like for them going forward? And for my job is to understand that in each one of these humans.

Yeah, I expect that is kind of hard to come to terms with. And if you come from a background where there has been no financial planning, which I expect is the case in many cases, It is going to be extraordinarily challenging to get them to understand that that this is temporary, and that that your career is going to peak. And you know, for athletes, that's pretty they're pretty young in their thirties, thirty-five at the most, sometimes go into forty, but that's unusual. And they're just beginning life. And I expect that's really challenging. So what happens when people don't make those provisions for that second career? How do you help them?

Yeah, so a lot of the times we get brought in as to fix situations, whether that be in music or whether that be in athletics. And normally that's Someone that's retired or retiring and seeing that daylight at the end and not necessarily knowing where that's going to go. So a lot of the times it's, you know, sitting down, going through the situation where we're at. What do we need to do? How do we— how are we going to navigate this? How are we going to— Find that potential of a second career.

Yeah.

Helping people through those processes. A lot of the times it's not, not all times, but a lot of the times it's not to the point where I get involved where it's going to be a dire situation and there's real significant financial distress. We have been involved in it, are involved in that currently. But primarily, it's people that have gone through the process that understand that how this income is not what they thought it was going to be. And what they have left is not exactly what they thought it was going to be for the next 40, 45, 50 years. And one point on what you just said was, is that, you know, the average careers are in the 2 to 4, 2 to 5, 2 to 6 range. So when you're looking at that short a period of time and these kids are 28, 29, 30 years old and their career's over, we need to start looking at that. And hopefully we are doing a better job of helping them see what this means today for them as they're getting their contracts. And then secondarily to that is what are they going to do about having this money provide for them for multi-decades to come? So yeah, and especially with a lot of, you know, there's financial literacy with anybody is an issue. But when you've spent your time you know, working so hard at your craft and spent your time just getting there, just to, just to get to the, to the eliteness of, of making it to the NBA or the NFL or Major League Baseball, just to get to that elite, the amount of time that you have to put into that, it's, it's so massive. And so when you're looking at being able to be good at that and then be good at financial literacy on the other side of it, That's a whole other thing. And lastly is that, you know, trying to find the team that's around these players or musicians that are going to be guiding them correctly.

Mm-hmm.

And all these have been issues in the past and the misunderstanding of what they can spend and what they can't spend and the guidance in regards to what the future looks like and not what it is today. All— and the teams around people. All these things are absolutely necessary for everything to go well. So, and there's wonderful examples of this, by the way. And then there's wonderful failures that we've also been— that have been public over the last number of years.

Yeah, that's with high-profile individuals. Yeah, they have to deal with that. That public fallout. And yes, we have seen it many different times, and it's really quite sad to see that playing out in the public. Well, you said there's some fine examples and some, some pretty deplorable examples. Well, share with us some of the good examples.

Well, I think, you know, a lot of this is public, but, you know, you look at what Kobe's team has done. When Kobe was around and what he's done for their family and the LeBrons and the Michael Jordans. And we look at those examples of people that were either themselves or had a team around them that put them into situations where they were able to— Magic Johnson's another great example of that, I think. You know, where the money was much different when Magic was playing and to do what he did with it, with the access that Michael was given, that Magic was given, are, you know, he took that to another level.

Mm-hmm.

You know, you look in music and you look at the Dr. Dre's of the world who have done an amazing job. And you look at people that have been able to take their incomes and continue to create. There's no doubt about that. But to continue to create and then take that and then move that into another level of success. So, you know, these are wonderful examples from my perspective that it's absolutely doable. I don't think that Dre or Michael Jordan or Magic Johnson had this wonderful financial literacy coming out of school. I just don't see that. You know, the Charlie Sheens of the world are just the opposite, or the Nicolas Cages who have made mistakes and way overspent and thought this money was going to be endless. Those are the disasters in this, right? If you look in sports, you have Allen Iverson, which is a great example of management that really took care of him. He didn't realize it at the time because I think he fired the manager that actually put some of his Reebok money aside into an annuity that is now taking care of him potentially for, for, for the rest of his life, hopefully. But At the time, he was disturbed by the idea that this gentleman was helping him in the way that he was because he didn't realize, and the gentleman did, the manager, that, you know, Allen could be overspending. So, you know, listen, we've had multitudes of wonderful successes in— I really can't go into the ones that I was involved or that I've been involved in or— But we have these wild, wonderful successes on one side of it, you know, where people have somehow gotten into the— got with the right people and— or done it themselves and had that ability to do it. And then— but the majority, unfortunately, have been the other side, which are this—

Mm-hmm.

You know, I know Sports Illustrated came out with this, this, this stat that 78% of people that retire from sports are in bankruptcy or financial distress in a number of years after retirement, a couple years after retirement. I don't know where that number comes from, to be honest. But let's say it's not even 78%. But let's say it's 50% or 60%. And we all look at the wild amount of money that these guys are getting paid. The reality is, is that then why would we have so many in financial distress? Right. So there's all the different things that we've talked about, you know, between spending habits, financial literacy, bad teams, all that stuff. That's all the negative side. And then if you just turn on the other side, you've seen these wild successes because they had all that stuff in place prior.

Mm-hmm.

So yeah, anyway, that's, that's, that's, That's how I frame it.

Yeah, we look at all of these celebrities and think, wow, what a life they have, and life must be so easy for them. But like you said, they, they didn't get there by accident. They got there by hours and hours and hours of dedicated work and practice. And so they haven't had time for financial planning, but I think that perhaps there's something else going on there other than just money because they are in these high-profile positions. And I think it's difficult, and I think they struggle being able to separate lifestyle signaling from what is genuinely fulfilling. I think that, you know, that spotlight— I haven't ever been in it, but I suspect it is so— it's not only demanding, but there's just something about it that just keeps magnetizing people to be drawn to it. So how do you help someone distinguish between that spending that reinforces their true identity and their fulfillment in life versus just that spending that quietly erodes their long-term freedoms?

Well, and I'll make a comment on your statement, and I think The one thing that we need to make sure that we put into perspective is that, you know, when I look at the general public, we have a tremendous amount of consumer debt. We have a tremendous amount of credit card debt, right? So we're trying to live this lifestyle, in my opinion, that far exceeds what we can afford with our own money. And when you have people that have sporadic paychecks, forget about, you know, you get your monthly or bi-monthly paycheck, but you have sporadic paychecks, right, that may, may not come. I've got a 2-year contract, but I got injured. You never know any of that stuff. And if you're a musician, you gotta be putting out new stuff all the time, or you have to have a commercially successful song or whatever it may be, or tour or whatever that Looks like. So when it's sporadic like that, it just enhances that need for watching what we're spending. And when we're getting checks and we're still in that position, right, in totality, I mean, I would say the vast majority of US consumers have very low savings rates. I think the number came out at 3.5%. So if that's the case, then we're all trying to live this lifestyle that exceeds where we're at today. You know, I look back on some of the people that were my first clients and what they were able— I had a gentleman that was a door-to-door egg salesman, my second client ever. And door-to-door egg salesman and would save up his money and buy a piece of land and build a building on it and then rent that out. And he did this over and over and over and over again and built this wonderful estate, but everything was paid for. There was no debt. He didn't buy new clothes all the time. He didn't have the fancy car until he bought a car later on, but didn't really have the fancy cars and you know, didn't go out to eat at fancy restaurants and didn't do all these things that, you know, didn't go to Starbucks for his $7 cup of coffee or whatever it is. But my point is, is that, you know, he was fiscally restrained always. Now, whether there's a great balance between that and what I believe the general public to be is 2 different things.

Mm-hmm.

So I do think that the, you know, to get back to the point and the question that you asked is that I do think that Athletes, musicians, entertainers, people that have had one-time events, liquidity events of some sort. The real thing is to understand that spending, right? I like to give somebody a certain amount of money that they can go out and spend, and it's not going to be effectual on the overall plan, right? Especially when they first get money.

Mm-hmm.

Because they have certain wants and they have certain people that they want to make sure they take care of and Whatever other reasonings they may have. So let's put a little bit of that aside and we're going to do that. But remember, if we do any more than that, it's going to start to affect the long term. So if you exceed the spending that we can provide, then we need to make sure that we're understanding that we're going to need a second act to this, right? That we're going to need another to make up that income somehow later on. Because you're spending that today. So really, it's the educational process of telling and showing, and so that they can visualize that this is what it's going to look like. And if I— if they understand, the people that we deal with, they understand that if I take some money out, it will affect the entire, entire plan that we've set out for them so that we are taking care of them for the next 20, 25, 30 years. So that's the kind of education that I think is absolutely necessary. And it— but it's hard. I mean, it's hard to get people from, you know, that financial literacy that we've talked about, that's very, very difficult for them to even want to get involved in, right? Until they understand what the downsides are not. So once again, the right team around them and providing that guidance and making sure that they are getting more financially literate. I wish the general public would do that as well, so to be fair.

So trusts, insurance, estate structures are often discussed as technical tools, and I'm sure these are the things you discuss with your clients. In practice, how do you use them as a behavioral guardrail that protects your clients from themselves? You just talked about the challenges of doing that. What are some examples of how you actually put that into practice?

Yeah. So, we over the years have led with estate planning. And the reason for that is I think it's the first step that you need to take. You know, nobody knows how long we're going to be on this planet. Nobody knows what's going to happen when you're going to be, you know, able to make decisions for yourself financially and health-wise. So let's just get that done, right? Let's, let's get your voice into these documents. Let's, let's, let's make sure that all that stuff's in place. Then the second part is, is that then we look at these, the way that the estate is structured, right? Do we have stocks? We have bonds, we have real estate, we have commercial real estate, we have private equity, whatever Whatever that— We have sports, whatever that looks like, then we can find the best ways to then reduce or stagnate the growth of the estate depending on the size of that estate. So for example, we use— for a lot of people that we deal with on the family office space is primarily real estate people. And so we can do things where you're fractionalizing real estate, so it's reducing the value and And there's all these wonderful discounts that potentially you can apply for so that it once again reduces that. So we go through grantor retained annuity trusts. We can go through a multitude of different estate planning tools to see if any of those fit either your thinking or your estate. The last part for me is the insurance part. So the insurance is, we have, we've done everything that we possibly can to reduce it. We still need some protection, and we're gonna get some leverage by paying this premium on life insurance, either a term policy or whole policy. And we're gonna, we're gonna then re— you know, cover any type of need that's there at that time. So I come in with, from an insurance perspective, at the very last ditch effort. So yeah, we— that's kind of how we go through many of the estates that we work with.

Yeah.

Well, for our last question, so at any moment when public relevance fades, whether through retirement, injury, or shifting cultural attention, what financial mistakes do you see most often, and what conversations do clients wish they had started 10 years earlier?

The spending is the big one, right? So checks are going to keep coming in. Checks are now all of a sudden stopped. And now what do I do? So what they should have been doing is when I'm playing, when I'm getting my paychecks, we should be doing things at that time, not being reactive afterwards, but being proactive when we know what's coming in. You know, I hear a lot of the times from a variety of different clients that I'm going to inherit some money. My company might be selling in the next couple of years, all these types of things. For me, none of that's reality. Until it's real, it's not real to me. So I don't do any planning based upon those concepts until they become that reality. So when I'm dealing with people that have sporadic income, Right, for contracts, music advances, whatever it may be. When I'm dealing with those people, it's a very specific conversation as to, first of all, who they are, what they're trying to do, and then their understanding of what that, what that looks like for the future. When you're dealing with family offices, when you're dealing with high net worth or ultra high net worth individuals, That's a different conversation depending on how their income is coming in. Is it coming in through an event or whatever it may be? But as I said, I'm not looking for that next contract. I'm looking for today. So a great example of this is that people in, let's say for example, a showrunner, we do a 3-year, let's say just for round numbers, 3-year, $10 million deal. With whatever ubiquitous streaming platform there is. And then what we'll do is I'll say, okay, out of that $10 million, what are we netting after taxes and your management and everybody else? All right, we're going to end up with $7 million, or let's just use that number. So then I'm going to say to them, let's put $3 million away into very conservative investments. We're going to put that away. We're going to create a foundation for you. So that foundation is there in case everything else goes away. You lose the other $4 million. We've got $3 million that's set aside for you for, for hopefully forever, as long as we don't spend it. Now, if we get another contract, then I'm going to do the same thing, and that foundation theoretically goes higher and higher and higher. And each time it happens, each time we have an event, Then we will start to do that and we'll set some of that aside. Now, hopefully they see the benefit of that and they want to increase the amount that we're setting aside percentage-wise. But let's say it doesn't. Let's just say it stays exactly the same year after, I mean, each contract after contract. Once again, that foundation just continues to grow. So now we're in a spot where we've always got this taken care of. And then, as I said, When the contract stops, when the event doesn't happen anymore, or whatever that looks like, we've now taken care of and put away money and set that aside so that that's their worst-case scenario at that point. So one of the methods— there's, once again, when you understand who you're dealing with, when you understand how they think, that's how I have to design things. It's not this wonderful one-size-fits-all. It is very individualized, and it takes time. It really does take time. I don't want to stress that.

Yeah, so time and discipline for sure.

For sure. And listening.

And listening. Yes, indeed. Well, what a phenomenal look into the high-stakes world of entertainment and support finance. Richard has shown us that securing a lasting legacy requires more than just high earnings. It demands strategic insight, creativity, and a forward-thinking vision. If you're in the entertainment or sports industry looking to secure your financial future and align your wealth with your purpose, Richard has provided a fantastic resource, and you can find that at www.srmprivatewealth.com. To learn more about their precise and innovative financial solutions, please go to their site and you can have this resource available to you. You'll find this information also in our show notes. We hope this conversation has giving you valuable insights into protecting your capital and creating a lasting legacy. And don't forget to claim your free gift, Beyond the Paycheck, by going to www.go.stetalker.com/beyond-paycheck. And thank you for spending the time with us today in Streams to Impact, brought to you by Steadtalker Capital. If you enjoyed this episode, We'd be honored if you'd like, share, and subscribe to help others find their path to financial independence. Until next time, keep building your legacy.

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