Buffs Helping Buffs: Knutson Talks Finances To Seniors
BOULDER - Remember your last semester of college, the exciting finality and the terrifying uncertainty? Remember being thrust into the professional world with four-plus years of pseudo-preparation? Remember how little you knew then, and how much you wish you knew?
Levi Knutson remembers.
"Everything I'm about to tell these guys," he laughs.
"These guys" being 13 University of Colorado senior athletes, who squeeze around a conference table in a meeting room of the Dal Ward Athletic Center.
Knutson stands at the front of the room, writing on a white board. There's a seven-step plan to financial independence, a breakdown of credit scores, a matrix that represents a mutual fund. Knutson ' a former Buffs basketball player, now a financial planner ' is here to educate the athletes on how to build their wealth after graduation.
"I want the CU student-athletes to not be normal, I want them to be extraordinary and excel when they get out of here," he says.
The athletes present represent a broad spectrum of sports ' football, skiing, golf, soccer ' and they'll be thrust in the professional world frighteningly soon. For most of them (and for a certain reporter), this is the first formal financial advice they've ever had. The University of Colorado, for whatever reason, doesn't offer a wealth management or financial planning class for the general student body.
So Knutson has the athletes' undivided attention as he lays out modern America's horrifying debt landscape: the average American owes $20,000 in student debt, $8,000 on their credit card and $10,000 on their car. Three-quarters live paycheck-to-paycheck, unable to bank any savings.
The crux of Knutson's talk is the importance of not using a credit card. People spend 20 percent more with one than without, and quickly find themselves facing exorbitant interest payments with little way out. The athletes are shocked when Knutson reveals that companies like Home Depot and Victoria's Secret make more money off of interest from credit card payments than from actual merchandise sales; they're equally surprised when he says that credit scores are relatively irrelevant ' you can have perfect credit and still be broke.
"They won't tell you this outside this room," he says. "Visa, MasterCard, American Express, the banks, they want to make money off of you."
Then, Knutson explains a concept he calls the "debt snowball," which he says is the most efficient way to get out of debt. Basically, you make the minimum payment on every debt until the smallest one is payed off, then add that payment to the next smallest debt until it's gone, and so forth.
Knutson's journey to this conference room was a long one. He was a four-year letterman for Colorado's basketball team. He set a school record in 2011, his senior year, by shooting 47 percent from 3-point range; that season, he teamed with NBA lottery pick Alec Burks and CU all-time leading scorer Cory Higgins to lead Colorado's most efficient offense of the last decade. Then his professional hoops career took him across Europe ' from Spain to Poland to Germany ' where he averaged 14 points per game before he hung up his kicks because of injuries.
Knutson came back to Colorado, where he put his finance degree to work. Earlier this year, he stopped by athletic department's offices to visit with Mindy Sclaro, his former academic coordinator. She mentioned that the department wanted a to start financial planning program for its seniors, and Knutson said he'd love to lead it. Sclaro put Knutson in touch with Dave Callan, the department's director of student-athlete leadership, and they tipped it off.
"I just realized how much money affects every area of your life, whether you like it or not," Knutson said. "It affects your relationships, it affects your marriage, how you view yourself at work, it affects your stress level. It just affects so many areas of life, and it's inevitable."
This wasn't the first time Colorado brought in someone to teach fiscal responsibility to its athletes, but never before had the university consulted a former athlete. Knutson can relate to them in ways that others couldn't: he understands the time commitment that comes with being a college athlete, and he can help them leverage the unique networking opportunities that come from being well-known in the community.
Back in the conference room, Knutson explains how to save for retirement. He breaks down the differences between stocks and bonds, traditional and Roth IRAs. If the athletes in the room start saving now ' for example, 15 percent of a $50,000 annual income at a 10 percent rate of return ' they'll be millionaires when they're 60.
"Man, we eating Benihana's twice every week," football player Marques Moseley says to teammate Christian Powell.
Benihana, Flagstaff House, Noma ' they're all on the table if you have that kind of money. Knutson wraps up his talk and the athletes file out of the conference room, shaking his hand and scheming about how they'll build (and spend) their nest egg. Maybe some of them will achieve their financial goals, maybe they won't.
But remember your last semester of college, what you knew and what you wish you knew. Regardless of how their lives play out over the next 40 years, these players are already ahead of the game.