Millions of dollars and stardom doesn’t protect you from the threat of severe debt and even bankruptcy. There are countless stories of celebrity athletes and actors living so far above their means that even their million-dollar contracts don’t suffice.
Former Detroit Lions’ NFL player Ryan Broyles has a different story to tell. Learning at a young age the value of money and the importance of planning for the future, he has been living off a fraction of his paycheck for many years – investing in real estate and building a retirement fund that can support his family even when his career ends.
A self-taught investor, Broyles is an inspiration as he talks about how frugally he runs his life so he can secure a financial future for his family.
Let’s get Charged Up! about how to live more frugally with Broyles as a great example.
Jenny Hoff: Ryan, thank you so much for joining me today.
Ryan Broyles: Hello, thank you for having me.
Hoff: So, can you first talk a little bit about your background, where you come from and how you developed your view on money and investing?
Broyles: Well, I grew up in Norman, Oklahoma, a college town, University of Oklahoma, with three other siblings of mine here in Norman. It’s a great place to be. I think I learned a lot about finances as I grew up. For example, as a child, both of my parents worked very hard, so I knew it took a whole day job.
Now, as I started to further my education and talk to some other people, I’m just trying to figure out why do some people have a certain level of income or money, things like that, and so then I was introduced to the investment world through a good friend of mine. Her family invests primarily in real estate. She taught me principles about it.
Obviously, you don’t hear a lot about real estate investing growing up or in school. You’ve got to hear it from somebody. And I was very interested in what I heard, because I did not want to live a certain way – not that it’s wrong by any means – but I just knew that there’s an easier way to do things. So, I started to learn about finances, and my knowledge developed slowly after that.
Hoff: I want to talk about that, because you obviously entered the pro football world, and this is a world in which there are flashy cars, nice houses and exotic trips. It’s a place where you’re making exorbitant amounts of money at a very young age, and yet you had your head kind of screwed on right from day one as far as I am able to discern from what I’ve read about you.
How did you get into that mindset as someone who was suddenly coming into more money than you had ever seen and resisting the temptation to spend it?
Broyles: Yes, well, I don’t think it’s one of those that it just happens. I think my relationship with money or just having self-control was just something that I’ve learned throughout my lifetime from my parents, good friends and so growing up in Norman. We never needed much, so I lived off very little with my family.
Money wasn’t a thing of like, this is for luxury, this is for glamour, so I think the way I was raised, when I knew I had some money, I was almost on a hoarder mentality because that’s essentially how we lived. And then, obviously, you start to learn about finances, the ins and outs, and then it developed from there. That upbringing has definitely helped me.
Now, there definitely were temptations in the locker room when you got friends who have these nice things. Don’t get me wrong, I’m not a perfect human by any means, but I know there are finer things in life and I think once I did come into that money, I learned some valuable lessons through various books.
From one of those books I learned about passive income, and that was something for me to hold on to, because the more you have, the more you can make. That turned it into more of a challenge for me. It wasn’t about going to buy these nice things, because really that doesn’t fulfill anything.
My true goal from the very beginning has been is financial independence. I had heard horror stories about guys going into the NFL and losing all their money for various reasons. I didn’t want to fall into that statistic.
Hoff: Right, you really thought it out, and you realized that these careers are pretty short and there’s only going to be a certain amount of time that you can make these kinds of salaries, and so instead of spending it, you were looking long-term.
Is it because you are planning for essentially this early retirement and financial freedom, and living off passive income? What was your plan as you started to develop your strategy for saving money and investing?
Broyles: Well, I think it was more emotional. So, my senior year, again, it’s crazy that I am talking about literacy, as I still have a lot to learn, but these things didn’t just happen because I woke up one day and things have played out the way they did in my life.
They kind of just made this beast, I guess you could say. In my junior year in college, I had the opportunity of getting drafted early, but I came back for my senior year. There were great accolades on the line. I was still here at home, I wasn’t ready to leave and I had opportunities to come back and win championships.
Then, during my senior year, I tore my ACL, my first major injury, so at this point, I was scared. I just felt my life flashed before me, so during my training process, I was like, listen, I don’t care where I get drafted, whatever amount of money that I could get, I’m going to dig and stir with it.
So, I almost went in like my back was against the wall. The injury really came at a pivotal time in my life. Even before that, the summer before my senior year, we went to Haiti. It was the first time I have ever been out of the country to help others. It’s definitely very heartbreaking how Haiti was, especially that time of my life where I thought I had it all, and you know, I was going to go get drafted, if everything played out right
I was a bit humbled when I went out to Haiti, and that was right before my senior year.
All those things just worked together to make me who I am. Yes, it’s crazy how it all worked out.
Hoff: Yes, your eyes were open and you also had this fear, again of this injury, knowing that could flare up or another injury could end your career completely. That’s a very unstable situation, right? There’s certainly guarantees when you’re playing at that level, right? And the competition is so fierce, so I love your story because it shows what actually works when it comes to building wealth: living below your means, making smart investment choices, educating yourself instead of only relying on others for money management information.
Can you talk about the salary you were getting as a pro football player and then the money that you actually lived off?
Broyles: Well, I signed a big contract in my time. Guys could take $200 million now, but I signed a rookie deal worth $3.6 million, four years, and then I kind of just rolled from there.
In terms of budgeting and saving, there was a thing called a rookie symposium. We got to go to Kenton, Ohio, where these guys talked about budgeting, finance and things like that, so the budget kind of just fell into place at the same time.
I also had a financial adviser who my wife and I chose, and he talked about, “Hey, you’ve got this lump sum of money. If you play your cards right, you can do this,” and he kind of gave us a plan of what he thought and then he brought up the budgeting situations.
For example, he suggested, “Live as if you were not on a budget for the next four or five months,” so my wife and I did that. Especially coming from college where you’re probably spending no more than two grand a month, it ain’t easy, and so we kept hitting about $5,000 a month, just living freely.
Yes, we were in a different place. We didn’t look at the money like oh, we’re just going to go spend this, but we were living a lavish life at five grand a month. So, we just kept hitting that number and that’s when we knew, at this point, this is what you need to save over six months, and this is what we can invest, what can be more aggressive, what’s more liquid, and so we kind of developed a game plan.
Hoff: And I want to get into that more, so you had a $5,000-a-month budget. Essentially, after taxes, that would be $60,000 a year of take-home pay that you’re living off, and the way you came up with that number was you first just lived in a comfortable way that you guys were happy with.
You didn’t feel like you were sacrificing, but at the same time, you weren’t being responsible and just going crazy with your money, so you said, OK, $5,000 is where we can live comfortably and feel good about our lives, let’s make that our budget.
So then, how did you break down that $5,000 budget? I want to see how you decided on what you’re going to put toward a mortgage or rent, food, etc.
Broyles: When we started out, I didn’t have a car payment because I paid my car off right before I got drafted, and I still have that car. I’ve had it for 10 years this summer actually, so I didn’t have a car payment, internet bill was what, $60, rent was $1,800 maybe, and no mortgage back home because we didn’t own a house here. So, we’re essentially just paying rent, living our lives, paying our bills, and essentially, it’s what it was and we just kept it at $5,000.
Hoff: OK, so how much did you spend on groceries and entertainment, and –
Broyles: Actually, still, to this day, I run for a monthly budget for our household, so we’ll save all our receipts, put them in a bag to review once a month to make sure that we’re hitting our number. I’m to the point where I can feel how many times a card was swiped, what was paid, I know at what time of the month where it’s like, OK, hold on, we need to slow down, obviously, after you do it so many times.
Hoff: Wow, that’s interesting, I mean, it’s really admirable, because I read some of the things that you have done to save money. For instance, you haul your own furniture when you guys decide to move, or you limit how many times a week you eat out, and it’s like, we don’t do that and we are trying.
We consider ourselves physically responsible, but when I read about what you do and I’m like, wow, you’re really living it. You really put yourself in that mode of I’m not going to spend money where it’s unnecessary. It’s not going to give me joy.
Broyles: Yes, I think there’s more psychology to it. I feel like, let’s say you want to go on a diet. That’s essentially like a budget, like no one wants to hear that so it’s like, you have to make it a way of life, like this is the new norm. It’s not like I’m reaching or trying on a daily basis. It’s how we live now, it’s our new normal, I guess, so it’s really not a thought.
Yes, just like I said earlier, there definitely are temptations. It’s like, do we need that or not? Every dollar that I do make, I honestly think OK, how do I invest that, and my wife buys into that as well, so just making finances on our own is not a battle. It’s like we know what we want to do, and we’re given our money chores, essentially, and that’s just normal. Just like when we wake up and we have family time or go to the gym, no?
Hoff: Yes, it just becomes a way of life, and it doesn’t feel like anything else. So, talk a little bit about your investment plan. I’ve had a lot of experts on my show. Some swear by real estate, some swear by index funds that are very passive, some swear by this perfect mix of bonds and stocks, so what is your investment strategy and how did you develop it?
Broyles: Well, I’m well diversified. I hold real estate, probably the biggest of any of my shares there, and then I’m exposed to the market as well, and then liquid cash, so I think as you start to maneuver and I can start to learn and you can stomach more risk or less risk, I think there’s different times in your life where you kind of change the portfolio to those things. But obviously, being someone younger, I definitely look long-term on our portfolio.
We’re not as aggressive in some areas, and then there are areas that we’re more liquid that we could be more aggressive with, so those kind of maneuvers, but it pretty much stays the same.
For example, if I was a stock market guy. I would have 90 percent invested in the stock market but that’s not how my portfolio is, so that’s how I look at my long-term views.
Hoff: So, talk a little bit about that. You say a lot of your investments are in real estate, so how did you get into that? You didn’t probably have a background in real estate at all. How did you get into real estate and educate yourself on how to not lose money and how to make money instead?
Broyles: Well, with real estate, the person I told you about taught me about finances, and they’re a family who is big in real estate. They own a bunch of property here in Norman, Oklahoma, and various cities. She was the babe that actually gave me my first job, so we spent a lot of time together over the summer, worked at the YMCA with some neat kids and it was a great time.
We would always be on the bus, taking the kids somewhere and then that would be the time that we talked, and she knew the situation I was going to be in. I had the opportunity of getting drafted, so she kind of just took me under her wing and taught me some things, and obviously, with her family being in the real estate, she taught me about real estate, mortgages, taxes, insurance. Not as in-depth as I know today, but just enough to pique my interest.
And then when I got drafted, I bought my first investment home with her as well. I guess, my interest in real estate just kind of started evolving at that point.
Hoff: So, you yourself were paying rent to live in a place but you were buying investment properties in order to rent out and to develop a cash flow, correct?
Broyles: Yes, I think I bought three or four investment homes before I bought my own.
Hoff: Oh, wow. Why did you make that decision? Did you feel that buying a house for yourself was going to be not as profitable?
Broyles: Well, I was in Detroit at the time and I had a four-year contract, so, I was like, is this really the place where I want to set down my roots and buy a house? So, I kind of like delayed that and then four years later, we did buy our primary home in Dallas.
Hoff: OK, so you were putting your money toward investments and your investment portfolio – stocks and bonds. What percentage of your savings do you put toward that?
Broyles: When I was a rookie, I want to say I put probably 90 percent of my bonus money into the stock market, and then I made sure to have 10 percent liquid, just in cash. So essentially –
Hoff: OK, for an emergency or anything like that, right?
Broyles: Yes, and then I would just invest the rest of it.
Hoff: Invest the rest in real estate and then stocks and bonds?
Broyles: Yes. No bonds. I have never bought a bond.
Hoff: You don’t buy bonds?
Broyles: No, and now, I do have some mutual funds, and I can only imagine that there’s some type of weight there, but yes, I was primarily just individual stocks.
Hoff: So, individual stocks. So, you don’t even buy index funds?
Broyles: Yes, correct.
Broyles: And my retirement fund, those are exposed to those things, so I do more index and mutual funds now.
Hoff: So, what do you do? Day-trading then when you invest in individual stocks?
Broyles: I do not do day-trading. I’ve actually read multiple books on that, and I have talked to multiple people about it. I’ve actually had the little simulation account as well, but I’ve never done that personally. I’m really a buy-and-hold investor for sure.
Hoff: Buy-and-hold, so since you taught to herself basically about where to invest things and how to invest, would you say it’s easier to learn about investing in real estate and how to develop a cash flow there, or is it easier to learn about how to invest in the stock market?
Broyles: Oh, real estate for sure. Real estate, 100 percent.
Broyles: Well, stocks, you can buy how many stocks on the market? Millions? You know what I mean, real estate is like just find a good location, preferably near a school, a place where your value’s appreciating, a place where rents are higher than expected compared to what it costs. And you look for things in the house: Does the roof need replacing in the next five years? Do I need to redo the AC? That gives me more of a concrete number.
With the stock market, you kind of go in and you’re just throwing up a wish. Obviously, you check the company statements and things like that, and you’re pushing money, but it fluctuates in value.
Real estate is a lot less liquid, so people can just – when the market changes or whatever might happen – sell their house, whereas in the stock market, everybody could go sell and everyone’s down.
Hoff: Do you buy your investment properties with cash, or do you take out a loan and do you put 20 percent down, or how do you structure those?
Broyles: I do all of that, so my first few houses I bought, I took out a loan, 20 percent down on those. I do have some that are paid off, and I do have line of credits on those, so if I did need the cash, I could get that, so I make sure that line’s open. I pretty much do loans, I have banks, and then personal cash and investors, the whole point is to have access to money.
Hoff: OK, because I know when I spoke for this show to Robert Kiyosaki, who wrote “Rich Dad, Poor Dad,” one of his things is that you don’t even need to put money down on a house. He says it’s so cheap to get it that you can basically get cheap loans.
Broyles: I’ve actually met with Robert Kiyosaki out in Arizona, him and his wife, great people, but yes, when he said that, essentially, he’s talking about sowing that value-add type of deal, so one of his first investments he’s ever done before, not ever done but on a bigger scale, him and his wife bought a distressed multiunit property, maybe 200, 300 units in Arizona, so he finds the money, and he buys it. He rehabs it and so it ups the value, then he puts people back in it and raises the rent, so then, when he goes and takes out a loan, he’s already built in an equity so he refinances all his money out.
It’s essentially what people say no money down, but yes, that’s a little more technical, but that’s essentially what they mean, yes.
Hoff: So, it’s not necessarily for everybody?
Broyles: Well, yes, so I flip homes as well, me and my wife flip homes, and so you would buy a house that’s under market. Say it’s under market by 6 percent, OK? When you take out a loan, 80 percent to 20 percent loan value, when I refinance my house, I want to make sure I have less money in it than what the 80-20 refi will allow.
So, then you can hold an asset with no money in it, so then it’s an infinite return.
If you continue to do those investments compared to someone who puts their money in the market and it takes a year, some people in real estate can get 20, 30, 40, infinite if they find the right market to do it right.
Hoff: So, for people who want to get into this, what books do you suggest or where do you suggest they go to actually really educate themselves on this, to start investing in real estate?
Broyles: Well, the internet has so much information. I’ll tell you one website that I tell all my friends. It’s called BiggerPockets, I think they have like one of the top 100 podcasts in America right now, something like that, but they’re strictly real estate and they’ll teach you different topics and it’s free of charge, and people will just reply and tell stories from a whole selling to no money down, to 80-20, to HOAs, to home inspection, everything you need to know about real estate is on that site.
They recommend books on BiggerPockets as well, but I have Robert Kiyosaki’s whole thing about LLCs and internal properties, and commercial buildings, all his books, but I think it’s more psychology at the end of the day, millionaire next door, things that are just going to get you to change your mind when you think about money because we’re not taught it.
You’ve got to retrain yourself, and once you do that, you’ll start to figure out questions, and then you’re going to mold your own game plan.
Hoff: OK, I want to ask you because we are with CreditCards.com, what is your credit card kind of philosophy as far as using credit cards, and do you use them for rewards or do you just use debit cards? What do you do?
Broyles: Yes, we do everything – we try to put everything on autopay through our credit card every month. One, it’s an easy way to track purchases, bill at the end of the year with that, so yes, we definitely do rewards cards.
We’ve got rewards cards, to build up travel miles. We’ve got a card for like electronics or whatnot, so those are our go-to cards. We try to build points as much as possible on those.
Obviously, if you want to help your credit score, I would suggest a credit card and use it for expenses you know you’re going to pay every month. For instance, if you have a cellphone bill, go on autopay, so then you’re making your payment through that credit card.
Especially for somebody who wants to invest and needs loans, to make their returns better, essentially, they need to have access to credit. They need open lines of credit so when banks look at that, they’re like, this guy is a trustworthy person, so it’s definitely a benefit.
Now, you lose if you don’t pay and then you have to pay interest, so use your credit cards to your advantage.
Hoff: OK, you use cards for rewards that probably fund a lot of your travels with your family, and then also you make sure you put your spending and credit card payments on autopay so that you are paying it off in full every month, building your credit, and not paying interest?
Broyles: Exactly, exactly.
Hoff: So, my other question is, I’m curious because we talked about how sports stars a lot of times end up losing the money that they made. And oftentimes, they go into bankruptcy along with actors and other celebrities. Did you try to educate your teammates? Have you tried to do that with other people who are in your field or do you just try to lead by example?
Broyles: Well, I’ve actually had opportunities to talk to college athletes and high school students in various high schools around the country. I’ve actually done thing for Visa where I spoke to a school out in Washington, D.C., so I definitely try to give back where I can.
I enjoy teaching people because it’s something I want to talk about, and I’m seeing the fruits of it.
Hoff: Absolutely, and did you see that any of your teammates followed suit and said, hey, if he can live off $60,000 a year, I can live off that? Did you see that at all?
Broyles: Oh, yes. At the Lions, the guy that sat next to me was Nate Burleson, playing the lead for 10-plus years. I mean, he was a receiver, he was someone I looked up to, and he kind of got my mind on hey, this is business. This is how it’s supposed to be, so he kind of gave me the boost, so he’s actually calling CBS Sports and he’s all over the TV right now.
He always had that entrepreneur mindset, so he put me on and obviously, in the locker room, we had those conversations, and even still to this day, I’ve been retired what, two years now, I’ve got guys that were still in that locker room that will call me and pick my brain, so it’s definitely cool.
Hoff: Yes, absolutely. I mean, if you decide to not just retire and enjoy the fruits of your labor, this could be another career for you where you give investment advice to people who were in your situation. So, do you ever really feel like you’re sacrificing? Do you ever really feel like, boy, I would love to just maybe do those exotic vacations or buy that really fancy boat, or get that really fancy car. Is that something you see in your future or is that something that you just don’t need at all?
Broyles: Well, yes – well, don’t get me wrong. I have lived. I did that at the beginning, but yes, there are times. On vacations, we definitely make sure we’re going to enjoy every moment, but I never feel like I have to like penny-pinch by any means, either.
Now that my investment portfolio is starting to grab more time, since I’m not playing football, I’ve tried to buy more assets that will kick off more cash flow so then it gives us a little bit more flexibility.
Hoff: So, you plan on just living off the cash flow, the passive income that comes from that and not touching the original investments?
Broyles: Yes, yes, I’ve thought that’s been the plan from the very beginning.
Hoff: That’s awesome, and so you’re retired, but then you don’t need essentially to be working right now to live a nice comfortable life and support your family in a really comfortable way?
Broyles: Yes, well, that’s always been the goal, so that’s why I learned about investing, what, five years ago, and it was all about financial literacy, it was about financial freedom and Robert Kiyosaki preached on that five years ago when I read the book. So, every asset that I buy, every dividend that I receive, every asset that I buy, I try to get cash flow from that, so I can continue to do that. Yes, the way to wealth is obviously saving while you spend so you can continue to invest on things.
Hoff: Absolutely, and what about people that don’t make $600,000, $700,000 a year, millions of dollars with a sign-on bonus? I’m not talking about people at the poverty line, though, either. But with many people, isn’t it just basically about making sure you can survive? Yet, with most people who are living semi-comfortable middle-class lives, couldn’t they be living below their means a little bit so they can take some of that money and put it away like you did in a way that will generate a lot more?
Broyles: Oh, 100 percent. You don’t have to make millions of dollars to save money. If you make, geez, no matter what you make, especially if you do have a good income, you should be saving 10 percent at least of anything you make.
Now, obviously, it might take longer for you to accumulate wealth, but you are going to be in a better position in 20 years if you didn’t and just made an excuse, so I definitely think there is a psychological bit.
There are some people who are like, well, I’m never going to do this or I’m never going to be that, and that carries over to their finances as well. Whereas, some person that’s going to be more strategic about it, they make a plan about their finances, they give it a job, and then yes, maybe they can retire one more year earlier, but they gain that from having some type of self-control and saving their money.
Hoff: And when you talk about saving, it’s basically following that method that you’re using where it’s not just saving that money and putting it in a bank where it’s not growing at all because there’s no interest rate essentially. It’s saving that money and putting it in something that’s either going to deliver – yes, exactly, the stock market, where you’re going to get gains every year – or in real a state where you get a cash flow, right?
Broyles: Without a doubt. So, compound interest, they call it, what, the Eighth Wonder of the World, like as Einstein said, that is when you can put your money into something, and then every year, it gains. So, in the stock market, 8 percent every year is going to gain without you doing anything. You know what I mean?
That’s how you build true wealth, so I think that’s one of the things you have to think about. I got to put this thing to work. I got to put it somewhere so it can make some money. Now, great, you do need money in a savings account, but you want to build that nest egg so you got to keep feeding it.
Hoff: Absolutely, and what are three things that someone could do right now to get their financial lives in order when it comes to maximizing their income, making smart investment choices and planning for their future?
Broyles: Well, first and foremost, you have to get educated.
The second would probably be try to make it your lifestyle.
My goal in every investment I do, I’m trying to sip pina coladas on the beach, so that’s like my mental cue, so I’m like, why am I doing this? So I can sip pina coladas on the beach, so you have to psych yourself out, give yourself a carrot at the end so that when I do this, I’m going to get this. You know what I mean? So, you have to give yourself something to chase.
And then three, tell people so they’ll hold you accountable. You will be surprised about how many people think the same way you do, so you definitely can’t keep it a secret.
I guess those might be my three – yes, and try to enjoy doing it because no one wants to live inside of a box where people give you rules, and that’s what budgeting essentially feels like. You know what I mean? So, you just got to change your mindset on it. Make it a game.
Hoff: Absolutely. OK, educate yourself, give yourself a carrot at the end of that, know what you’re working toward, and make sure that you tell people, you build a community, you hold yourself accountable, you inspire others, and you don’t feel like you’re stranded alone trying to do this.
Finally, our show is called “Charged Up!” What gets you charged up about the financial plan you have made for yourself and for your family?
Broyles: Well, like I said, I want to be at the beach sipping pina coladas, I guess.
Hoff: It’s knowing that you’re getting there, right? It’s knowing that that is now a very real possibility, and you’re not going to have to be 80 years old doing that, right? You can do that when you’re still young.
Broyles: Yes, exactly, that’s the goal. And a lot of you can, too. You either spend less or make more, or invest wisely. There are multiple ways to do it for sure.
Hoff: Fantastic. Ryan, you’re a very inspirational person, and it’s been a pleasure to talk with you. I really encourage people to do what you did, and you also give back to the community, and you live well below your means, and you save and you take care of your family, and at the same time, you made it to the top of a very, very competitive field.
Thank you very much for sharing your insights with us today, and I think it will inspire a lot of people to say if you could do it, they can do it, too.
Broyles: Well, that’s awesome. I appreciate the opportunity to share my story.
See related: Charged Up! podcast: Becoming financially literate