Money Rehab with Nicole Lapin - Super Bowl Edition- Devon Kennard, Athlete, on Paying College Athletes and “Mailbox Money”

Episode Date: February 11, 2022

Not only is Devon Kennard the linebacker for the Arizona Cardinals, but he’s also a philanthropist, real estate investor, soon-to-be financial author and now, Money Rehabber! Listen up for his real estate hacks, tips for negotiating contracts, and more. Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Happy Super Bowl weekend eve, everyone.

For many of us, the Super Bowl is a celebration of football, stellar halftime shows, greasy food, and star-studded commercials. But because I am who I am, which is an uber nerd, the Super Bowl is a fascinating financial spectacle. If you're interested in finance, the Super Bowl is basically your Met Gala. The amount of money that's tied to the game is pretty unbelievable. And because this is money rehab, I want to follow the money trail. So here's my Super Bowl super money trivia. First question, how much money will the NFL gain during Sunday's game? While this particular figure isn't public, it's estimated that on Super Bowl Sunday, the NFL makes tens of millions of dollars from advertisers, sponsors, TV partners, commercials, ticket sales, and more. Here's one I know you've been asking yourself. In 2021, how much did it

cost advertisers to secure a 30-second commercial during the Super Bowl? $5.6 million. Next, how much money in total did advertisers spend on Super Bowl ads in 2021? $485 million. How much money did people spend gambling on the outcome of the Super Bowl last year? The American Gaming Association estimated that $4.3 billion last year was bet on the Super Bowl. With sports betting now legal in New York, I'm sure that number is going to be much higher this year. Moving on to the people who are working this weekend. Last year, how much money did the players on the winning team earn for playing in the Super Bowl? $112,000 for the game. And how much did the losing team make? $56,000 for the game. In other words, exactly half of what the winning team won. How much are Super Bowl halftime performers paid? Zero dollars! Isn't that surprising? While the NFL

covers transportation and production costs for the performers, the performers do not make any money by performing at the Super Bowl. So Dr. Dre, Snoop Dogg, Eminem, Mary J. Blige, Kendrick Lamar, all working for free this weekend. While it may not make much of a difference to Dr. Dre if he doesn't make any money this weekend because his net worth is more than $400 million, but it's not just the marquee names that aren't getting paid. Their dancers aren't getting paid either, or at least that's been historically true. This year, the performers have spoken out, and as of right now, will be able to make minimum wage while performing for the Super Bowl. But come on, guys, you're gonna pay the Super Bowl performers 15 bucks an hour while companies are

paying over 5 million bucks to advertise the show that those said performers are performing in? Do better. Anyway, if you're at all like me, all of these numbers raise a lot of questions. First and foremost being, what is it like for the football players? Are they rolling in the dough or do they need money rehab too? To answer that question, we're going to play an episode we recorded with Devon Kennard, a linebacker for the Arizona Cardinals. Here it is. Today, I'm talking to Devon Kennard, linebacker for the Arizona Cardinals. But like any good money rehabber, Devon doesn't have just one stream of income playing football. He is also a real estate investor and soon to be financial author. Devon, I am so excited to have you on the show and hear about all the football, real estate, all the things. But first, a quick game of money rehab

Never Have I Ever. Have you ever played Never Have I Ever? The drinking game. Yeah. Okay, so this is the money financial version of that with no drinking, unfortunately. So Never Have I Ever maxed out a credit card. I have not. Nice. Never have I ever negotiated a contract. I have. Yeah, you have. Never have I ever bought crypto. I have.

Nice. What did you buy? I got into like Bitcoin. I don't got a whole lot, but I dibble and dabble a little bit. It's not really my thing. I stick to real estate. Never have I ever bought a used car. I have. Nice. Have you bought a new car? Yeah, I bought a new car too. Strategically, because it wasn't going to cost me much more than a used one. So it was like, all right, I might as well just buy it new. But my rule of thumb is typically I don't buy new.

Yes. Yes, that is also my rule of thumb. Buy used cars, run them into the ground, sell them later. New cars are a total waste of money. Never have I ever taken out a student loan. I have not. Never have I ever played the lottery. I've never played the lottery. Nope. Never have I ever cashed in a savings loan. I have not. Never have I ever played the lottery. I've never played the lottery. Nope. Never have I ever cashed in a savings bond. I have not. Never have I ever bought myself a six-figure gift. I have not.

This is, I don't know what y'all call it in football, but like what would be the equivalent of a layup? Never have I ever bought an investment property. That's definitely a layup, but I have definitely done that multiple. I can't wait to hear more about that. Tell me, though, what your relationship was like with money when you were growing up. For me growing up, I had a father who played in the NFL and I got to observe a lot and he did pretty well. But I was really young when he was actually playing. So

most of my life, it was when he was retired and I got to see what I did and didn't want. And my parents did well, but I always had a desire to do even better and put myself and my future family and generations. And I took it upon myself to where I was like, my dad did well. He was like first generation, like going to college, getting, getting out of the hood type of situation. And like, it was, I put a lot of responsibility on myself to advance my family much further than that and utilize, you know, the position my dad put, put me and my siblings in. So that was kind of for at a young age, that was kind of my motivation. I don't really know where it came from. That's not

like I grew up talking about finances with my family a lot, but it was always like, if my dad could do this, I got to try to do better type of thing. Wow. So what were the things that you wanted to do differently? And what were the things that you wanted to do the same watching him? things that you wanted to do differently and what were the things that you wanted to do? Same watching him. I like that he didn't have to get like a full time stressful job. So he did well enough and was smart enough with his money where he had some jobs and some things he did. But for the most part, he was able to do the things he wanted to do. So I like that. But I wanted more. I don't know what everything I want yet, but if I want it, I want to be able to do it type of attitude. And what was their relationship with money? Were they strict?

Did they spoil you? Was it a little bit of both? They were pretty strict. I grew up in a good community and anything I really needed or if I really, really wanted, I pretty much had. But they didn't just throw money at me ever. And my mom is very conservative. I always joke and say she's a penny pincher and she still shops at outlet stores and cuts out coupons and does the whole thing. So that really taught me to be kind of frugal with my finances. I mean, rich people stay rich by acting like they're poor and poor people stay poor by acting like they're rich. I think I think she probably taught you really well by doing that.

Yeah, absolutely. I always joke and say the richest people I know, you couldn't even tell. Right. The millionaires next door. Is that what you wanted? Did you want to just not be able to tell and have a bank account, but not all the flash that goes with it? I've never been super into the flash. I mean, at this point in my life, in my career, there's certain things that I, that I like, but it's all within reason, depending on how much money you're making, what your situation is and all that. So for me, it was, there were things that I've wanted, but I would, I would, I'm okay with delayed gratification. So I'd rather be able to splurge and buy things with passive income than earned income. So I play football for a living.

My dollars have to work just as hard as I work. Just as hard as I worked for them, they got to work for me. So that was kind of my mindset. And once I'm regenerating enough passive income, if there's things I want to splurge on from time to time, then I've earned that right. But for me, I had to earn it first. When did you become interested in football? Did you always think that's what you were going to do because of your dad? I always loved sports in general. I actually, if I could, even to this day, if I could, I'd play basketball.

But I started growing this way and not vertically. So I was like, I think my genes are kind of dictating but sports was always a passion of mine but I had a lot of um injuries even my senior year of high school and throughout college to where I didn't always know um and it wasn't always like a shoe in that I was going to play professionally so it really kind of pressed on me to figure out and I had to make a decision. Do I want to be successful if I end up playing football or do I want to be successful no matter what? And, you know, the vision I had for my life, it wasn't just tethered to football. I wanted to be able to live that life period. So I had to start thinking and operating in a way of like, all right, whether I play zero years or I play 10 years, you know, how am I going

to live the life that I want to live? What do you mean it wasn't a shoe-in? You were recruited by more than 40 schools. That's not a shoe-in? But once I got to college, I had a lot of injuries. There was a chance I wasn't going to get drafted into the NFL. Even once I got in the NFL, there was a lot of skepticism of, will he actually play? Will he end up getting cut?

You know, all those things. And I've been blessed enough to play eight years now. So it's definitely a blessing. The average NFL career is three years. So to make it to eight years and be able to do what I do is definitely something I don't take for granted. And it's something that has been a big business. You've referred to college recruiting actually as a business. Can you tell me a little bit more about that? It definitely is. You know, you're trying to, just like any other business, you're trying

to get the best talent so you can put the best product on the field. And it's generating income. And, you know, the NCAA and college institutions are using using athletes and i don't know if you saw the reports but now they're going to start being able to get paid as college athletes and i think that's great because uh there's a lot of universities and ncaa that's making a lot of money on college athletes backs and for me i was like it um i know that i'm going to school school for free i'm going to take full advantage of it and try to use them just as much as they're using me to sell tickets and get people to support USC football. That's where I went to college. I was like, I'm going to use them and take advantage of this free education. So, you

know, that's why I took school seriously and knocked it out as fast as I could. Do you have a sense of how much USC makes off the football team? Like when you were there, was there the same movement that players should get paid? College athletes should get paid? Everybody said so. Like it was ridiculous that, you know, I'm at USC and we're dealing with guys who are for sure about to go first round or have NFL careers. And they're, you know, waiting for a stipend check for $1,200 and more than half of it has to go to rent in downtown Los Angeles. And then the rest is, you know, we're eating peanut butter and jelly sandwiches and training table.

You know, it's kind of ridiculous to think that's what our lifestyle is like when, you know, we're playing USC football, competing for national championships and bringing in millions of dollars. I don't know exactly how much, but I know it's a lot. Then you got drafted. You went to play for the NFL. What was the best piece of financial advice you got when you were being drafted? I don't know if anyone really told me, but I went in immediately with the mindset of like, I'm going to save as much as I can, because I didn't know how long I was going to play, but I looked at it as like, I'm 23 years old. I get a chance to make a lot more money this year than any other 23 year old. So I'm going to save as much as I can and meet as many connections, build relationships and try to leverage myself and put myself in

position to be successful. And so that, that was my mindset. So I know I like I got made fun of. But as soon as I got drafted, I drove I had my my high school car shipped out to New Jersey because I got drafted to the Giants. So shipped it out and I was driving my high school car for the whole first year. And then and then I found I got a marketing deal that I leveraged myself with the Kia dealership because I drove a Kia. But my car was having issues. And I like when you asked if I negotiated my own contract. Well, that's what I did on my own. I worked out a contract in an agreement with the owner of a dealership. And I got to drive a car free for three years. And I didn't buy my first car until I got my second contract and

went to Detroit. So that's kind of where my mentality, I had to kind of make sure I was like, I want to put all my money towards investments and savings. And I could do all the other stuff down the line. My heart is like bursting. I'm so happy. Hold on to your wallets, boys and girls. Money Rehab will be right back. Now for some more Money Rehab. Nerdy question. You talked about the highest tax bracket, but how do state taxes work for sports? I read that some sports leagues, what you make per game is actually subject to state tax in the state that's hosting the game is that true yeah so you get taxed in every in every state that you play in so it gets complicated

you got to make sure you have an account that understands that but yeah so um i'm in arizona now when i was playing in new york my checks looked a lot different than they do now in arizona and so even now i joke and i say i hate going going to New York to play because, because, you know, it looks a lot less than it does when I'm playing in Arizona or other places. Wow. I mean, does it really depends also what city you're playing in? Because if you're making 250 grand, I was like, is that the starting salary? That looks a lot different and different. Yeah, it's growing up.

It's going to be like 550 this year. So even, even bottom of the roster guys are making pretty good money, but, um, but yeah, it can look a lot different depending on what city is like you're playing in and where you're, uh, what, where all your away games are, you know, you want to be in a good home-based city because you know, you're playing home at least eight games. So if you're, if you're, uh, in a high tax home, uh, home stadium, then that really sucks because eight games, you already know you're getting taxed the worst. And then, and then you just got to see where else you're playing from there. Yeah. New York, California, probably. You get paid in other things, but, things. But being in Arizona, I like because

the tax situation there is much more favorable. In March of 2020, you reportedly signed a three year $20 million contract. And based on what we talked about, it's not $20 million in your pocket. What was that negotiation like? That's still I mean, even with all the taxes and all the stuff taken out, that is amazing. Yeah, it was definitely a huge, huge blessing. And it was actually my second big contract that I signed. I signed one in Detroit. And then I was actually released from Detroit for essentially negotiation reasons. I wanted more money.

And then I signed a new deal with the Cardinals and negotiation went well. As soon as I was released from Detroit, there was interest right away. And my agent got to work. He did most of the groundwork. I'm a firm believer. I earned my payday on the football field. I let my agent do his work from there. So he negotiated a good deal. I had a number in my head that I wanted to hit and he was able to hit it. And, you know, now now, you know, get to play home in my hometown. Well, I mean, and then you get paid in just doing that, which is priceless, it sounds like. Yeah, absolutely. So when did you start getting into investing? Was it with real estate investing at first? Yeah, I actually, so I kind of mentioned earlier, but my college career was really shaky.

I had some injuries. I had a lot of position changes. I wasn't sure if I was going to play in the NFL and have the kind of career. I always had confidence, but there were days where it was like, I don't know if it's going to happen. So I started trying to figure out what else I was going to do. And I met a mentor and he started out as a police officer and a special education teacher. And he bought one property, turned into two, turned into three.

And now he has a property management company in California. And him and his partner own over 4,500 units in LA. And just hearing his story, sitting down, talking with him, that was really inspiring. Because I'm like, if he was able to build that off of a teacher and police officer salary, if I only play one year in the NFL but leverage it right, I can put myself in position and give myself a really good head start.

So that was my mindset. And after my first year, I went to a couple of real estate meetups in Arizona with a partner of mine who used to go to USC with me. And we bought our first property in Indianapolis. And I never looked back after that. So what does that mean? How many properties do you have now? So I now own 15 properties of my own, but I'm also in 40 other syndications. I'm not sure how familiar you are with that, but I'm a limited partner in a few of them. I'm a general partner in big syndications all across the country from apartment complexes, single family homes to senior living to warehouses. I kind of try to reach and touch all the bases in different fields and different industries and, you know, invest and collect what I call mailbox money every month and just push up that, you know, what my passive income is and my mailbox money is every

month. And that's what I've been building out. So a combination of my own personal portfolio and then finding people who are already syndicating really good deals and networking with them, connecting with them, investing alongside them and reaping the benefits. So here's a tip from Devon you can take straight to the bank. I think everybody should adopt the mindset of building passive income, mailbox money, of looking at and creating multiple revenue streams. I think it's essential. I think that's what the new American dream is. There's more ways now to make money than ever before in our society and in life. So everyone should take advantage. You know, you can have a nine to five job

and sell stuff on Etsy that you like making and make some nice chump change. And then that you could start to put into your first investment property and just let things start to feed each other. And you'll be amazed at where you can be five years and 10 years from now if you start doing that. The last question, what do you think about REITs? So for folks who can't necessarily get into syndicates,

who might not have enough money, aren't accredited investors, real estate investment trusts are something that anyone can buy into. Do you have thoughts or recommendations? Yeah, I don't think... I never got into REITs because of what my financial situation became in. But if I wasn't an accredited investor and I was starting, there's a few things. One, I would try to find multiple revenue streams first. So where else can I make some extra money besides my W-2 job? Two, I would look at, which is kind of along those lines, but specifically mailbox money. Can I just buy a property on my own and do it that way? And three, I would look into REITs and, you know, those types of vehicles to where you can still kind of get in

the game like a syndication, but and get a good return and things like that. So I think that's how those are the three things I would do if I wasn't an accredited investor. And I would be very aggressive in trying to earn as much capital as I could through my W-2. So getting as good at my job as I can and making as much as I can,

find a couple other revenue streams, buying a property on my own and doing REITs and then try to keep doing that diligently until I can become an accredited investor. And then, you know, the Red Sea opens up from there. I hope your book is called Mailbox Money. Is that the name? It's not the name, but it's going to be in there a lot. We haven't determined the name, so it might end up being. Yeah. I mean, we do have the same book age. I'm just saying. And it might sound like we have the same publisher.

So I have some ways. But mailbox money has been good. You've said it a lot. And I think it's a really good term for folks to remember. To just make your money work for you. I mean, you work your ass off for money. Like, make it return the favor.

Hey, that's what you have to do, especially in this day and age. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikader and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.