Scott Caldwell: Accounting For Life After Sports
Q: After 5 years in the league, how has your view on finances changed from your first year until now?
A: My views on finance have changed through each stage of my career, as it has a lot to do with my living situation and personal life. When I signed as a homegrown player out of college, I was fortunate enough to live with my parents for two years. I was still in my financial ‘college mode’, focusing primarily on saving as much money as I could. My goal was to create an investment fund and an emergency fund. The investment fund was where I put my money that I did not want to touch for a while (mutual funds, or other long term stock like investments), while the emergency fund was what could get me through 3-6 months of expenses if I lost my job (in a savings account or other liquid position).
As that second year came to and end and my third year in the league began, I realized that I can and should spend money as long as it is for a purpose. I still believe and follow that view on finances in my fifth year in MLS. I will spend money on life experiences or something that will give me a future return, but not typically on unnecessary tangible things. Dinner or drinks with friends, fun activities and events, and date nights with my girlfriend are all experiences worth spending money on, because they will lead to great memories and future happiness. If I need to buy a material item, I will usually compare prices and get the cheapest one as long as it doesn’t significantly sacrifice the quality of the product. I’m sure my views will continue to adapt as my career and personal life evolve.
Q: What has been the best piece of advice you have received regarding finances throughout your career?
A: I’m not sure I can pinpoint the best piece of financial advice that I have received, but I do have one strong belief to share (I probably got this from my dad) – I do not think there is any good reason to buy a new car. As soon as you drive it away from the dealership the value drops significantly. I own a 2005 Toyota Camry that gets me everywhere that I need to go. In another year or so I plan to upgrade to another used Camry. In my opinion, owning a reliable car that doesn’t cost a fortune to maintain and repair is more financially prudent than buying a new flashy vehicle off the lot.
Q: There is a story about you saving all of your per diem during your residency days, is that true?
A: Yes - it wasn’t much - but I would take all of my per diem at the end of the semester and throw it in my bank account. Food and most other necessities were already taken care of, so I never found a need to spend or buy anything for myself, especially at that age.
Q: What do you do with your per diem now?
A: I still do my best to save my per diem, but there are many times when that is not possible because I need to grab a snack/meal in the airport. If our per diem contains a big bill ($50 or $100), I will set that aside to put in the bank and use the smaller bills for my everyday needs.
Q: Can you talk about how being a CPA has helped you when it comes to understanding how your money works for you?
A: While I still need a little more real world experience to have the CPA title, my studies and experience in the accounting field have created a mindset that I will most likely have for the rest of my life. It isn’t about the specifics of rules or accounting policies, but rather constantly keeping an eye on my money, balancing my books/accounts, and having a financial plan.
Q: Do you feel athletes are prepared to handle their finances leaving early to pursue their pro career?
A: I strongly believe that anyone can handle their finances, whether it be an athlete leaving college early to pursue their professional career or a child just learning from his teachers/parents. The most important thing is having a good support system and, if necessary, a financial advisor whom you can trust (not just a friend who says they can make you money). Just know that money may not always flow in as easily as it does when you sign that first contract.
Q: What are some ways you save money or are financially prudent?
A: I am always trying to save money or find new ways to make money. In the last five years I have been financially prudent in several ways:
I put 10-15% of every paycheck in my 401k towards retirement. The beauty of this is I never actually see that money, so it doesn’t feel like I even had it to begin with. It will feel like free money when I am of age to start using it.
Whenever I pay in cash, I keep my change and throw it in a drawer to save up for a future purchase. I know too many people who leave their change at the register or don’t think it’s worth hanging on to since it can be annoying to carry around. Simply stashing it away for future use is very easy and there will come a time when you put it in the bank or buy something and not realize how much you saved!
I bought a house close to Gillette Stadium (where we train and play our games) with hopes of it becoming an investment. Instead of throwing money towards rent, I am gaining tax benefits and improving the house in an effort to earn money when I sell it down the road.
I would love to buy a condo in Boston and rent out rooms to teammates or friends. The cost of living in the city is very high and if the right opportunity presents itself, I could get rental income to cover the mortgage. This would allow you to essentially live for free while paying off your mortgage.
a veteran in MLS who has amassed over 100 appearances for his hometown club, New England Revolution. Caldwell was a top prospect growing up playing for various youth national teams and attending the prestigious residency program at IMG. He attended the University of Akron where he went on to win a national title and captain the team in his final years. Always keen on education, Caldwell graduated top of his class and he currently holds his CPA license. Caldwell plans to get into accounting once his career is over.