NIL Series: Choosing a Bank and Building Credit | Zach Miller, Sam Acho, Jeff Locke, Riccardo Stewart | NFL Players’ Podcast #16
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It is not a secret that NIL has made it possible for college athletes to make money before they get to the NFL. College collectives are paying hundreds of thousands of dollars up to millions of dollars to 18-22-year-olds.
However, how prepared are these players to receive this money and make the best decisions? For the first time, student-athletes are Paying taxes, opening bank accounts, establishing credit, making significant purchases etc.
This episode focuses on how to choose a bank & building credit.
For questions, you can reach out to Riccardo Stewart at +1 (602) 989-5022.
+ Read the Transcript
Riccardo Stewart (00:11): Hey, I want to welcome you guys back to another episode of the AWM NFL podcast. My name is Ricardo Stewart and I'm your host. And as always, I'm joined with my coworkers and good friends, Zach Miller, Sam Acho, and last but not least, Jeff Locke. And so, ⁓ last episode we started this NIL, like talking about, primarily talking to parents and student athletes who are receiving money as NIL students. And many of them who were thinking about making that jump next yearc - for the NIL, excuse me, for the NFL, and what do I do now that I already have a little bit of money? And so last episode we talked about how to choose an advisor because there's so many out there and the differences.
And then today what I wanted you to do is just kind of take a mailbag of all the questions that we get. We meet with tons of college athletes that are getting ready to go pro and there's all these questions that come up. ⁓ And I'm gonna start first with this. You guys have heard me say it once, you heard me say it a million times, and that is more is caught than taught.
(01:09): Meaning majority of what you do is because of the people you're around. Usually the house that you were raised in. This past week we were, ⁓ my youngest son was playing in a little club baseball game and his old coach who hasn't seen him in four years like came over and he goes, hey, we call him Pup. He goes, where's Pup? I'm like, there he is right there, shortstop. And he goes, ⁓ my gosh. I'm like, yeah, he cut his hair. Cause he said, well, I'm here. He goes, no, he has the same mannerisms as you do - which I'm like laughing because like, obviously I didn't teach them like, Hey, this is how we walk.
This is how we, you know, but what chiropractors will tell you is like, when it comes to kids, like you learn how to walk just by watching your parents and you guys have all seen it. You've been at a grocery store and you're like, ⁓ my gosh, look at these pigeon toe, just like is that, you know, when it comes to finances, a lot of that is the same too. And I want to start first with ⁓ the question that comes up is how do I choose a bank? Let's just start. I have money.
(02:03): Whether you got a big NIL deal or you're just getting your monthly stipend from the school. ⁓ And I want to hear how you guys chose the bank. Was it the same bank as your family? And so Sam, let me start with you first.
Sam Acho (02:14): Well, the coolest thing for me, and this builds on that idea of generational wealth or generational wisdom, ⁓ is I remember being a kid and my dad, parents came from Nigeria, didn't really have anything and kind of came of the American dream, the whole thing. My dad would go to the bank on Saturdays and obviously it was early in the morning before it would close and I was, I don't know, eight, nine, 10, whatever it was, he would bring me with him and I would just see that interaction. I didn't know what exactly he was doing or what was going on.
We'd go into the bank, there'd be some conversations, he'd know people by name, they'd laugh, they'd joke, and it was a thing. And I remember when I chose my bank, I ended up choosing the same bank that he chose, and now I have similar kind of interactions at times, and ended up changing banks down the line. But I had this, it was this idea of, wow, my dad did not tell me this is how you interact with people, nor did he tell me this is the bank you choose, but I knew that, okay, man, there's this bank, and I would go on a weekend, whatever. And that was one thing.
And the second thing I learned too, there's a Leonard Fournette who I got a chance to train with over the off season. I overheard a conversation with him and I think it was his daughter and he was talking about, man, I'm going to leave some money for you for something, right? This idea of like, hey, if you get good grades, boom, here's a reward, right? If you study hard, here's a reward, right? He wanted to teach his kids about how to build not only generational wealth, we talked about his last name, meaning something, man, you're doing great in school, whatever. So I'm not sure the whole context, right? Well, I'm sure maybe we'll have him on the podcast. He can talk about it himself, but –
It was just so cool to see here and understand that the actions that we take as parents, for those of us who are parents, our children are following and watching. And it has this idea of, yes, generational wealth in a money perspective, but also in an impact perspective of things that are caught, not necessarily taught.
Riccardo Stewart (03:58): Love it. How'd you guys choose banks, Jeff?
Jeff Locke (04:02): Yeah, so my dad was military. So I was fortunate to kind of get grandfathered into USAA, which is one of the better banks out there and they offer other services. Yeah, great commercials. But also I think we just went with like Bank of America because they had the best student bank account.
And that's really, I think how a lot of parents do it is they see some ads somewhere and they know somebody that set up a student bank account that has no fees and you just end up doing that. And then you end up turning it into your regular bank account when you're not a student anymore. And then you just kind of go from there without thinking about it again. So that's -
Zach Miller (04:38): That same, I opened a joint account with my parents, wanted to teach me like how a bank account works. So it was like the Bank of America, I think closest to my house here in Arizona. ⁓ So literally was all convenience. ⁓ They weren't good or bad. They were just the bank. ⁓ And it's all I knew for a long, for a long time was, Hey, you have money you put in the bank. Here's how you write a check. You know, some of that stuff, ⁓ like, you know, if you don't learn it at a young age, like no one ever teaches you it.
Riccardo Stewart (05:06): Nah, nah, you get hoes like I did. So I didn't have a bank at first, and I got my first scholarship check, and I got my Pell Grant. So like the two of them combined was like $2 ,800. ⁓ I hadn't had $800, let alone $2 ,800. And you know where I went? I went to the freaking check cashing place that literally like basically said check cashing place. ⁓ And you know, they charge you a huge fee and they give you all this cash. And finally somebody in the dorms like you need to get a banking account. And I'm like, well, how do I get one?
(05:36): go to a bank and I walked to the Wells Fargo that was like right across the street from the dorms. And that's how I got a bank, which like leads me in Zach. ⁓ How do I choose a bank? And are there some that are better than others and why?
Zach Miller (05:50): Yeah, I think when it's your first bank account, I think go for convenience and the ability to have access to your money. There's nothing worse than like needing your money, your cash, whatever you need to get money out from the ATM and not having access to your money. So like they're called like the money center banks, but think like Wells Fargo, Chase, Bank of America. Those are really your biggest banks with tons of locations nationally. So that's probably the easiest way.
Now, if you're actually trying to maximize how much money you can make on your money, online banks is where it's at. Think like your allies, like you can't go to a location there, but they have savings accounts that will pay pretty close to like 5 % right now. So that's actually a good place to put money so it can actually earn something versus if you put it at any of those other banks, Bank of America, Chase, you earn virtually nothing on your money sitting there. And so always you want to be money to be earning money.
And then there's even once you have kids, like I have these step accounts where these ⁓ managed debit cards for my 11 year olds to learn how to use a debit card. And so I make them pay for all their Sephora makeup and things like that. Girls, man, they like to use those debit cards. So, so it's a great way though. They'll just go, they'll just take that account to zero and it's a great lesson to teach them.
Riccardo Stewart (07:01): Man, this dude's back.
Riccardo Stewart "Coach" (6:58.220) I mean, we're over a center, our target audience is college kids. And so a few college kids have kids. He's like, you know, my 17 year old daughter got to get her a car. So, so, but like, stay on that point, Jeff, and maybe you can add to this. And I know it's a little bit off script, but it's going, Zach just said, okay, your money could be earning. When we're thinking about a bank, I've never thought about going to the bank where my money's earning. And he mentioned like 5%, like what the heck does that mean?
Jeff Locke (07:34): Yes, this thing in our world, I'm not gonna go into the details in the term, but just think 5%. 5 % is just like this floor out there that you should be earning on any of your cash just sitting there. So the way the actual big banks make money, you put your money in a checking account, they pay you like 0 .1 % on your money while it sits there, and then they go out and they buy the stuff earning the 5%. And that's how they afford.
(08:00): all the retail branches, that's how they afford everything, is they're making the difference in that money. What do you got Sam?
Sam Acho (08:06): What do you mean by that? I was having a conversation the other day and I was trying to have this conversation with the guy who's about to be like $100 million contract. And I was trying to explain, but so you said, I don't want to go into the details. What does this 5 % mean? Because this is what the people need to hear.
Jeff Locke (08:21): Yeah, so what you can do with your money essentially at any point in time is you can turn around and you can lend your money that you don't need right now to the US government, which in the world is seen as like the most stable thing you can lend your money to, right? So you can go out there and you can lend your money to the US government and make four to 5%. It kind of changes all the time. That's kind of what it is right now, right? And you know, you're good. You just, you.
(08:51): They would have to be a global catastrophe of epic proportions for you to not get your money back and your four to 5 % back on your money. ⁓ Right. But you have to know where to put that money. Zach talked about doing an online account. The online accounts are set up in a way where they don't have retail branches. They don't got all these costs to try and make their business run so they can give you more of that 5 % every time. Cause all you have to do is have an online account set up.
So, we see this all the time, it's people actually not earning what they should be on the cash that they don't need in the moment, which is going out and getting that four or 5%. And we see, essentially you're giving your money away to big corporations is really what you're doing at that point.
Riccardo Stewart (09:32): Ooh, that's that good stuff that they didn't teach us ever in school. All right, well, I got a bank. I got a debit card. You know what? Now I need a credit card. And I need to build credit because that's the next question that comes up is usually it's here's what we get. We get a kid who's getting drafted and he has enough money, wants to go buy a car. He wants to buy a house potentially. And he's like, man, I don't have credit.
(09:59): And there's all of these myths out there on how to build credit and we hear it and we're usually like that's not the way. ⁓ What's the best way, Zach, going back to you, what's the best way to build credit?
Zach Miller (10:12): Well, one of the, I mean, the biggest thing is to start early with paying bills on time. And so one of the easiest ways to get it is to apply for a credit card as early as possible, set it on auto pay so that it's literally you're using it and it's paid off each month. This is true of all credit. It's true of rent payments. Once you get a place in college, you're renting, all of that gets contributed to your credit score. And then your credit score is actually not an easy thing to calculate. And there's different types of credit score. So the biggest thing though is getting started early with having establishing credit. And then the credit history is gonna be the biggest contribution to your score. So getting that on time payments going and there is a lot more to it, but that is the easiest way to get started.
Jeff Locke (11:03): Rick, we're going to talk about those myths. You mentioned some myths with credit, right? And we hear this all the time and it drives us crazy on this call. So ⁓ the first myth we hear all the time is that you should carry a credit card balance, right? And we think this, ⁓ which means essentially you put $300 in your credit card this month, and then you only go in there this month and pay 30, which is the minimum balance. And you carry that $270 extra over to the next month, right? Someone somewhere, probably someone at a credit card company invented this myth.
Riccardo Stewart (11:03): Yeah. Yes, please get it.
Jeff Locke (11:32): so they can make money on you not paying your balance off, right? But that does not help your credit in any way. It actually hurts your credit to carry a credit card balance month to month. So like Zach said, you wanna make sure you're paying the statement balance in full every single month to build credit if you can. There's gonna be some months you might be tight, but like you need to be paying that statement balance in full. The next myth, go ahead, go ahead.
Sam Acho (11:55): What is credit? What is credit and why do people need it?
Jeff Locke (11:59): Yeah, credit is just how a bank views you in terms of how much they trust you to lend you money. That's all it is. Right. So we're talking about you got to establish ⁓ little credit cards along the way. So they trust you with little amounts of money. So when you get to buy in a car and buy in a house later, they then know they can trust you with much bigger amounts of money. And that's all credit is, is just a test of your behavior to see if they can trust you with their money they're going to lend you. Right. So.
(12:29): The other myth, and sorry to riff here guys, because this pisses me off. I can't stand these credit card things out there. The other thing you've got to make sure you do to get the best credit score is say you have a thousand dollar credit limit. Okay. You want to only spend $250 a month of that thousand dollar credit limit. That's called utilization. So you want to use 25 % of your available credit. Cause then the banks look at you and say, Hey, this guy could have spent up to a thousand dollars, but he's...
(12:58): So locked in and like so good about paying money back. He's only using 250 of it, right? So we can trust him more. We know he's not going to go out and try to use all of his credit at one time, right? So those are two of the biggest things we see missed and reasons scores are not where they should be when it is time to buy that big house and you get the really bad interest rate that you don't.
Zach Miller (13:21): And there's also a, there's a hack there that if you want to really boost your credit and your parents have good credit, you become an authorized user on their credit card as early as possible. And you get to kind of share in some of their credit that they have good credit and you get a little bit of that benefit.
Riccardo Stewart (13:37): Now, if your parents don't have good credit, don't, just don't do it. So a few more.
Sam Acho (13:44): You're laughing Ricardo, but you're being honest.
Riccardo Stewart (13:47): Man, trust me, I lived it. I lived it, no, I lived it. Okay, so we're gonna continue. We're definitely gonna have another episode, because there's so many questions to run through, but I'm gonna run through, it's a couple more that comes, and that is, Sam, I'm gonna start with you, because you are someone that people trust, and they're gonna ask you a question, and that is, ⁓ now that I have this money, what should I do with it? Not even just invest in it, I just got a bunch of money. What should I do, how should I think about it?
Sam Acho (14:16): Well, everybody's different. And we talked about this on some earlier episodes, but there's only three ways to use money. Three uses. You can spend it, you can share it, or you can save it and re-run the ways, invest it. So if you want to buy something and spend your money, buy something. Right, for me, it was a car. I'm not a big spender, but I wanted to get a car when I got drafted. Fourth round in Arizona Cardinals. Got a big signing bonus. And I still had my Bank of America college preferred checking account.
Now they're like, dude, what are you doing with this? All this money in this account? I don't know, but I wanted to buy a car, so I bought a car. I wanted to help. You know, so that was, that was part one. But also like we talk about sharing or giving. ⁓ I don't know if you, whether you are a giver or not, like there's so much benefits in giving. And so maybe it's a local nonprofit or charity. Maybe it's a football camp that you want to throw. Maybe it's a church, right? Giving, there's different ideas - 10%, whatever percent, give part of that money.
And then the next thing you can do is start to learn what it means to invest. I was having a conversation last week with a guy and he mentioned that, you know, he's like, well, I'm only gonna spend the money that I have, all this money that I'm gonna make, I'm just gonna, I'm not gonna spend it. But it's like, hey man, what if you could invest it? What if you could actually like save it? And not save like, okay, well, I'm just gonna have a little bit left over. No, find ways to invest and have my money make money, have my money grow.
And so, everyone's different, but I would say, yeah, there's three uses. You can spend, buy it, maybe it's a watch. So people are watching people. Maybe it's a car. Maybe it's a nice pair of shoes. Maybe it's a suit. Spend. ⁓ And then you can share, give, because we think that giving unlocks the grips that money can put on people. Give. And then lastly, save it or invest it and learn what that means. Listen to what Zach and Jeff just said about, okay, there's this thing where...
(16:08): What'd you say, ⁓ almost like a risk -free rate? I could actually, no matter what, get 5 % on my money? Wait, hold on. I could lend it to the government? That sounds a little bit fishy. And I'm guaranteed to get it back? Learn about it, and then have a conversation. ⁓ Ricardo will give you the number, reach out, we'll send you some information so you can learn how your money can make.
Riccardo Stewart (16:28) Good. Well, look guys, this is this we're gonna continue on this. We talked about like, how do I choose a bank? Last episode, how I choose an advisor when it comes to building credit. What do I do when I get the money? We even talked about the things that even come up of what about taxes as a college student? Do I get tax in the state that I go to college or the state that I'm from? Do I do it LLC? Do I do an escort? Like all of these things that you're not necessarily thinking about. We're gonna answer those questions on our next episode.
If you have anything else you're thinking about, you have questions that you have for us, please shoot us a text. The number is 602-989-5022. Again, that's 602-989 5022.