Who the Hell Are Phil Mickelson’s Financial Advisers?

This is the third or so in a continuing series of WTH/WTF posts where we look at famous wealthy folks’ investing errors, and wonder just WTF is going in their personal finances. Our goal: Learn from other people’s mistakes. Today’s WTF?! celeb is 42 year old golfer Phil Mickelson.

Phil is “mad as hell about rising tax rates, and he’s not going to take it anymore.” As Forbes (with tongue firmly in cheek) reports:

“To be honest, it’s hard to blame Mickelson – who has compiled a net worth approaching $180 million by repeatedly striking a tiny white ball until it falls into a hole — for putting all options on the table, which according to some, include the possibility of prematurely shutting down his career to avoid his rising tax burden. Let’s take a look at what Mickelson is up against in 2013:

For starters, courtesy of President Obama’s re-election and the subsequent fiscal cliff negotiations, Mickelson will experience an increase in his top tax rate on ordinary income from 35% to 39.6%, and an increase in his top rate on long-term capital gains and qualified dividends from 15% to 20%. Clearly, when faced with tax hikes of that magnitude, it stops making economic sense for Mickelson to continue to swing a metal stick up to 70 times a day in exchange for the $48 million he earns on an annual basis.”

Yes, our exploited golfer is seemingly going Galt. And while the above paragraphs are truly hilarious — Max Abelson has shown it is terribly amusing to mock the oppressed top 0.1% — I have to wonder who is advising the world’s second ranked all-time money winning golfer.

But if we can be serious for just a moment — and ignore the oblviousness of Mickelson’s utter lack of gratitude for his soft lot in life — this raises actual financial issues worth exploring. What are the legal — and I mean black-&-white-legal, no shades-of-grey here — options that people (whether they are means or not) should consider to minimize their taxes and maximize their investing returns?

A short list would have to include:

• Muni bond portfolios that throw off tax-free income;

• Estate planning (including 2nd to die insurance) which functionally eliminates estate taxes;

• Contributions to your favorite charity(s) to reduce gross total taxable income;

• Establishing a Family Foundation to further reduce tax base;

• Maximizing tax deferred accounts — 401k, profit sharing, KEOGH, defined benefit plan and cash balance plans — to generate largest legal deductions;

There is nothing especially fancy here.

Of the list above, Family Foundations and Estate Planning primarily matter only to those with a wealth north of $5 million — but everyone can take advantage of tax-free muni income, tax deductions for charitable donations, and maximizing your retirement accounts.

Again, I want to emphasize that these are all standard, run of the mill planning steps — legal, accounting and tax planning methods the IRS recognizes and approves of. In other words, they are not the stuff of Wesley Snipe’s accounting firm.

If I were a gambling man, I would bet that Phil sucks it up, and keeps playing golf. His sponsors (including accounting giant KPMG!) pay him $44 million per year. A more cynical type might assume the entire episode was an appeal to the golf playing demographics, who also do not care for increased taxes.

It appears that ordinary tax planning moves are either unknown by our ungrateful golfer, or maybe are being ignored by his advisers. Perhaps this explains Phil’s ire — he is misdirecting his anger broadly instead of focusing on his crappy advisers — who seem to be costing him millions.

Which brings us to our my original headline: Who the Hell are Phil Mickelson’s financial advisers . . . ?


Why so angry, Phil?



WhoTF Is Giving Howard Stern Financial Advice? (June 2012)

Advice for Rich Uncles and Others . . . (August 2007)


Golfer Phil Mickelson May Call It Quits Due To Climbing Tax Rates
Tony Nitti
Forbes, 1/21/2013

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