Since I last wrote about the Patriots and compared their season to the fluctuations of Bull and Bear Markets, there have been some paradigm shifts, and the mantle is turning over. The 2023 season for the Patriots was historically abysmal, and the fallout has begun.
Our beloved captain, Bill Belichick, has been relieved of his duties. In a heartfelt farewell press conference, standing beside Bob Kraft, we all got the news that after 24 seasons, we’d be saying goodbye, and from my perspective, this wasn’t a decision Kraft came to lightly.
Kraft is at a point in his career and age where his legacy planning is in the spotlight. Removing Bill from the team as head coach was something that he may only have done because he knew it would set his son, Jonathan, up for a cleaner slate and more opportunity when he takes the team over. I see many parallels between financial legacy planning and what the Krafts and Patriots are going through as they prepare to start a new chapter, so I’ve decided to share my thoughts and feelings on those similarities in this article.
Financial Legacy Planning – Understanding/Accepting Your Situation
The Krafts and the entire Patriots organization have been forced to realize they’re not in a state to chase championships. They’re not a few pieces away from securing a 7th Super Bowl title. Tom Brady isn’t walking back in the door. Mac Jones is not the quarterback to lead this team toward decades of winning. Accepting this fact is the first step towards making the right decision to set the team up for long-term success.
- Long-term Investments
It’s time for the team (Krafts) to invest in blue-chip companies. Steadfast talent that will grow and develop over time and play the waiting game, recognizing incremental progress as it happens. The end goal is that when Bob Kraft passes the keys on to his son, these calculated and well-advised decisions will have grown into something competitive with appreciable value; this is the philosophy of any sound financial legacy planning.
It would be ill-advised for the Krafts to throw money at risky, “get rich quick” fixes in an attempt to make the team competitors, once again, as fast as possible. It puts too much risk in dismantling the legacy he built for his sons. While an extreme example, this would be like emptying a trust fund and investing all the equity in a meme stock on Reddit because it’s the next “big thing,” the next Tom Brady. Robert has had decades of glory and will go down as one of the best owners in NFL history. The Patriots are a “leave-on asset” for Jonathan and the other children to take on and nurture, keeping the team in the legacy.
- Short-Term Gains
There is a time and place to take risks and go for it all. For example, a few years back, the Los Angeles Rams traded all their stock in future young players/assets to go out and get a blue-chip player at the top of their game (Matt Stafford), and it worked out for them. Stafford was the final piece to put them over the top. After putting all their chips on the table and going for a “win now” season, they did it, and Matt Stafford won his first Super Bowl. The Patriots are closer to a ground-up rebuild than where the Rams were before trading for Stafford.
Calibrating for Success
The Patriots are in a place where recalibration is needed. But it’s a fresh start, and as sad as I am seeing Bill hang up his hat, I’m excited to see that Kraft is making moves to leave the team and his family’s assets in a better place than they would have been if he remained stagnant. The Patriots’ retooling and recalibrating is something I can relate to many of my clients’ paths as they enter the final stretch of retirement planning.
Early in people’s careers, it’s more comfortable to gamble on an unknown/risky investment and hope it turns into a blue-chip asset. Later in life, it’s not so advisable, and much of the time, many of my clients need help getting a clearer picture of what junction they’re at in their legacy planning journey and whether some course correction is needed.
The five years before retirement and the first five years of retirement are the “retirement red zone.” A mistake in these years can be like throwing a Pick 6 on the goal line. One of the biggest risks people face is a sequence of return risks. If you face a bear market and start drawing money without a proper game plan, you can cause irreparable harm to your lifetime income base. I’ve developed a Retirement Planning 3-Bucket Strategy, which helps people understand/avoid retirement red zone mistakes.
As a family financial planner, it’s one of my greatest joys and satisfactions to help families align their goals with the legacy they’re building. Success isn’t built overnight, and everyone needs to recalibrate and retool now and again, even our invincible Patriots.
If you’d like to discuss your financial legacy planning or who the Patriots should draft at #3, I’m always happy for a friendly call. Do you think they’ll take a high-risk/reward QB and plug in an offensive lineman for the next decade, or get an offensive playmaker? Do you think Jerod Mayo is fit for the job?
My door is always open; let’s chat about it.
