Are you ready for some finance?

Leland Faust, chairman of CSI Capital Management and financial adviser to many pro athletes, says even the rookies need to put serious thought into securing their financial futures.

That’s not a challenge to be taken lightly, warns Faust, who oversees more than $1 billion in assets. Fortunes can be built or destroyed by a poor financial decision.

Faust spoke with TheStreet.com about the challenges facing the NFL’s newest competitors and the pitfalls they need to avoid.

Q: What financial advice do you have for those entering the ranks of pro athletes?

A: The player should realize the great opportunity that he has for long-term financial security. Nevertheless, to take advantage of that opportunity requires responsible use of his money. A player has to be realistic. Even though the sums paid to high draft picks are substantial, this money must last a lifetime.

The athlete needs to set realistic goals and assume that the first contract will be the only contract he will ever have. If there is a second or third contract, then this will add to an already positive situation if the player plans properly.

We advise patience and long-term thinking, careful tax planning, avoidance of debt — except for purchases of homes — and conservative investments.

Q: How should they choose a financial adviser and agent because they will be handed a lot of business cards?

A: Retain an adviser who is both competent and honest.

Does the agent or financial adviser have the proper background? Has he done this successfully before? Does he have the proper education? Does he have the required business registrations and licenses? Has he encountered disciplinary problems before? Have any prior disputes with clients been based on legitimate claims and not just spurious claims raised by a disgruntled former client? Is he demonstrably honest?

Also, did he provide the client, the client’s family or the client’s
friends anything of value in order to receive the business? If yes,
then the athlete has been “bought” and should not allow himself to be
represented by the prospective adviser or agent. If the athlete has
previously received anything, then we encourage him to pay it back and
choose a new and honest adviser.

Has the agent or financial adviser done anything to break the rules — NCAA rules, union rules, SEC
rules or the rules of any other appropriate governing body? If the
representative does not play by the rules, then he has disqualified
himself. The financial adviser should be paid a fee for services, not
commissions or other fees on transactions. The athlete should seek
someone who gives independent advice and is not influenced by financial
conflicts of interest. The financial adviser should be independent of
the agent.

Truly independent and honest agents and financial advisers
should be able to work together professionally to serve their mutual
client’s best interests.

Q: Since their careers are short — on average — how should they make financial plans?

The financial plan should contemplate a career
of realistic length. We like to assume that any long-term contract will
be the last one for that client. We can then be pleasantly surprised
when another contract is signed.

Athletes should make their financial plans by establishing
reasonable budgets that provide them with a standard of living they can
sustain from their investments after their professional sports careers are over.

For an athlete, the high earning years are limited; therefore the
financial plan would include less risk-taking than might be taken by
someone with similar income but with a much longer earning horizon.

Q: Can you give me the story of an athlete that did everything right?

A: Tiki Barber is an athlete who made the right choices throughout his NFL career.
He saved money and diversified his investments. As his financial
security and nest egg increased, only then was he able to enjoy a more
expansive lifestyle. He also successfully transitioned out of sports
and into a broadcasting career.

In the off-season, Tiki worked in various broadcasting
capacities and learned the business. Once he retired from football, he
did not have to regroup and start from scratch. It was a seamless
transition because of the work that he put in during his sports career.

Q: Can you tell me the biggest pitfalls?

A: The biggest financial pitfall for athletes is spending,
spending, spending. This is generally a much larger financial pitfall
than making poor investments — although, unfortunately, many do.

Another huge pitfall is providing family and friends with
unproductive financial support. Allowing family members to share in an
athlete’s success can be a wonderful thing, if done in a manner
commensurate with the athlete’s financial prospects. However, we also
believe that you are not helping someone you love by depriving them of
the incentive to be successful on their own.

On the investment side, the biggest pitfalls we see involve
athletes who are not cautious enough and who risk too much of their
capital in high-risk ventures.

Q: How big a problem is it to get young men who may have grown up poor to adapt to all the money thrown at them?

A: It is a huge challenge to educate young men to adapt to instant wealth and properly handle their finances.

Too many of the young players believe that they are strong when
they spend and weak when they save. In fact, it is just the opposite –
the strength is in savings and accumulating capital, thereby
controlling your own destiny.

Q: How can you teach them to adapt?

A: We attempt to share success stories with our clients to
motivate them to save. We share stories of clients who have been
retired for many years and who have not had to change their lifestyles
since retiring.

We try to contrast that with the horror stories of those who
have been forced to move into smaller homes, see their families leave
them and be forced to drastically curtail their lifestyle. We explain
that the rules of finance
apply to them regardless of their celebrity. This can often be tough,
because for their entire lives, they have had special rules apply to
them.

Before joining TheStreet.com, Gregg Greenberg was a writer and segment
producer for CNBC’s Closing Bell. He previously worked at FleetBoston
and Lehman Brothers in their Private Client Services divisions,
covering high net-worth individuals and midsize hedge funds. Greenberg
attended New York University’s School of Business and Economic
Reporting. He also has an M.B.A. from Cornell University’s Johnson
School of Business, and a B.A. in history from Amherst College.