Ask Tim: My Kid Might Get Paid to Play College Football… and I’m Afraid We’re About to Screw This Up

Every so often, a “money question” shows up wearing a disguise.

It looks like a sports decision. Or a prideful decision. Or a family decision. And then — quietly — it becomes a tax decision, a contract decision, and a long-term planning decision.

I’m Tim Lux, CFP®, CFPA,® VP of Financial Planning at Kingsview. We help people make big decisions that can change the direction of their financial lives and future retirement — and we make sure those decisions don’t create problems they didn’t see coming.

Here are three situations we’ve been hearing versions of lately — all very different, all very real.

“My son is a highly recruited running back. SEC and Big 10 teams are sniffing around. How should NIL factor into this?”

Dear Tim,

My son is a junior in high school. A talented running back. He’s getting scouted by some of the best schools — with some blue blood programs showing real interest.

He’s torn. We’re torn. And now NIL is in the mix, which feels like a whole new universe.

How much should NIL influence the decision? And what should we be thinking about that nobody thinks about?

— Excited, Overwhelmed, Trying Not to Fumble This

Dear Trying Not to Fumble,

First — congratulations. That’s a great problem to have, and it’s also a high-pressure one. I’ve come across a few situations like this over the past year — NIL is still the wild wild west and literally as I write this, things could change.

That being said, here’s the clean truth: NIL matters, but it’s rarely the most important variable. It’s also the variable most likely to distract you from the decision that will matter 10 years from now.

If you want a framework that keeps everyone sane, I’d look at it in three layers:

1. School fit comes first.
   Academics, culture, distance from home, the coaching staff’s stability, how the team uses your son’s position, and the depth chart in front of him. NIL is great, but it won’t fix a bad fit or a situation where he’s buried for two years.
2. NIL is income — so treat it like income.
   A lot of families treat NIL like “free money.” It’s not. It can create:
   • Tax filing obligations
   • Withholding issues (or none at all, which creates a surprise tax bill later)
   • Contract terms your family should actually understand
   • Pressure to spend because it feels like it should be spent
3. Protect your son’s future optionality.
   The best version of this story isn’t “we chased the biggest NIL deal.” It’s “he chose a situation where he developed, stayed eligible, stayed healthy, built a network, left school with options, and built a financial foundation that very few of his peers will have as he launches into his next chapter.”

If NIL becomes real, I’d encourage one boring move that saves a lot of grief: separate the money from the lifestyle. Open a dedicated account for NIL income, assume taxes, and decide in advance what portion is spendable vs. protected.

My team and I created a great piece on this that I highly recommend. Check it out - it’s free to download.

“I’m 60, have $2 million, make $300K a year, and I want to run my own portfolio. I want to leave my kids everything.”

Dear Tim,

I’m 60. Net worth roughly $2 million invested. I still make about $300,000 a year. I’ve got kids and my goal is simple: I want to leave them everything I have.

A lot of friends and colleagues think this is a bad idea, but at the end of the day, if I can give them a leg up when it comes to their education and career aspirations — I personally think my kids should start a plumbing business and call it a day — so be it.

Here’s my other truth: I don’t want an advisor. I enjoy investing, I follow markets, and I want to manage it myself.

If I’m doing this without expert guidance, how should I be thinking about investing? What should I consider? And what pitfalls do people like me fall into?

— DIY Investor With a Legacy Goal

Dear DIY With a Legacy Goal,

I respect the self-awareness here. Most DIY investors don’t ask this question until after they’ve taken a few avoidable hits.

If you’re going to run your own portfolio, I’d approach it like you’re running a small business — with rules, controls, and a plan for what happens when you’re not there.

Here’s what I’d want in place.

1. Decide what you’re actually optimizing for.
   You said “leave my kids everything.” That’s a legacy goal. Legacy goals usually mean:
   • avoid catastrophic loss
   • avoid tax landmines
   • keep the plan simple enough to survive you
   A portfolio built for ego (beating the market) often conflicts with a portfolio built for legacy.
2. Build a “core + satellite” structure.
   If you want room to invest actively, fine — but don’t build your whole future on it.
   • Core: diversified, low-cost index exposure across U.S., international, and high-quality fixed incom
   • Satellite: your active ideas, sector tilts, individual stocks, alternatives if you truly understand them
3. Put guardrails around the usual temptations.
   The biggest DIY blowups I see come from:
   • concentrated positions that get too big
   • constant tinkering
   • trying to time the market because “this time feels different”
   • chasing yield without understanding risk (especially when rates and credit conditions shift)
4. Treat risk like a family issue, not a math issue.
   Your risk isn’t just volatility. It’s: what happens if you’re gone unexpectedly? If you’re the person who knows every account, every password, every investment thesis — your kids inherit a mess, not a legacy.

This is where the value of an advisor isn’t stock picking. It’s infrastructure:

• clean account structure
• beneficiary designations that match your intent
• coordination with estate planning
• a plan your family can execute without you

Sometimes that’s also a trust conversation — not because you “need a trust to be wealthy,” but because you want control, clarity, and continuity.

If you stay DIY, at minimum I’d make sure there’s a written plan your family can follow:

• where everything is
• what the strategy is
• who to call
• what not to touch in a panic

Because your portfolio may run fine for 20 years. But legacy planning is about what happens on the one day you’re not here to explain it.

And, of course, if you ever changed your mind and think an advisor is necessary, take our five-minute quiz and get matched with an advisor in your area.

You’ll get all the resources you need to set you and your family up for success. Plus, you’ll be able to work with financial planning professionals like me.

“What’s a backdoor Roth? I only have a 401(k) with $800K. I’m 40, divorced, paying alimony, make $200K.”

Dear Tim,

I keep hearing people talk about a “backdoor Roth.” I’m not the sharpest tool in the shed, so please don’t mock… but don’t fully understand what it is.

I’m 40. Divorced. Paying alimony. I have one kid. I make about $200,000 a year. My retirement savings is mostly one 401(k) — around $800,000.

Am I supposed to be doing a backdoor Roth? How does it work? And does divorce/alimony change anything?

— Trying to Do the Right Thing Without Getting Cute

Dear Without Getting Cute,

Trust me: very few people understand backdoors. You might not be rich with financial acumen, but at least you’re asking — and willing to ask — the right questions. Most people aren’t.

A backdoor Roth is one of those strategies that sounds sneaky, but it’s really just a workaround for income limits.

Here’s the simple version:

1. High earners can get blocked from contributing directly to a Roth IRA.
   Income limits phase people out.
2. The “backdoor” is a two-step process.
   • Contribute to a Traditional IRA (often nondeductible, depending on your situation)
   • Then convert that amount to a Roth IRA
3. The real risk is the tax rule most people miss: the pro-rata rule.
   If you already have money in Traditional IRAs (outside your 401(k)), conversions can become partially taxable in a way that surprises people.

Now, you said something important: you only have a 401(k). That often makes this cleaner, because a 401(k) is not the same as a Traditional IRA for that pro-rata calculation. However, you still want to confirm whether you have any other IRAs floating around (old rollovers, SEP, SIMPLE, etc.).

As for divorce and alimony: it doesn’t prevent a backdoor Roth, but it does affect your broader planning priorities:

• cash flow stability matters more than squeezing every optimization
• tax filing status matters
• you’ll want to balance retirement savings with near-term obligations and a clean emergency buffer

Here’s how I’d frame it:

If you’re consistently able to save and you don’t have outside IRAs complicating it, a backdoor Roth can be a very solid move at 40 — especially because tax diversification becomes more valuable later.

But don’t do it just because it’s trendy. Do it because it fits inside a plan:

• 401(k) contributions optimized
• emergency reserves solid
• alimony and kid-related costs accounted for
• and the conversion won’t create an avoidable tax surprise

The best strategies are boring, but the key is doing the boring things in the right order.

Questions may have been altered or edited from the actual submission for brevity, clarity, or anonymity Questions may not have been submitted by actual clients and may have been added by Kingsview for discussion purposes.