A Winning Financial Plan for 'American Idol' Winner Scotty McCreery

Scotty McCreery's New Money: A Winning Financial Plan for the 'American Idol' Winner American Idol winner Scotty McCreery will have to be country strong to handle the temptation of his new wealth, a financial expert told DailyFinance. "Show business can certainly be here today, gone tomorrow," said Mitch Slater, senior vice president of investments at UBS Financial Services (UBS) in Westfield, N.J. "You just don't know how long that success is going to be. You have to make sure the money lasts long after the success is gone."

We asked Slater to outline a financial plan for McCreery that isn't the same old song. The teen received more than $250,000 in for taking the top spot on season 10 of Idol and in advances for the album he'll record. Plus he'll earn tens of thousands for granting Idol licensing rights, according to reports, on top of the change he's making from the 173,000-plus iTune downloads this week of his single I Love You This Big.

As a middle-class 17-year-old who's embarking on a high-risk profession, McCreery is a special case, Slater said. But no one is so special they can forget about security. Slater, whom we should point out has no association with McCreery, devised what he called a "four-bucket" strategy for the newest Idol.

Investing for Four Phases of His Future


Slater suggested McCreery should pursue a college degree at some point, so his first bucket should be a university-backed 529 college fund. He can put some money in, and leave it there for a year or two while he gets his music career under way.

"The money grows tax-free until he takes it out for education," Slater said. The adviser notes that this suggestion doesn't imply pessimism about McCreery's long-term singing prospects (which improved when he signed with Mercury Nashville this week), just realism. "Here's my answer: Taylor Hicks and Lee DeWyze," the money maven said, referring to two Idol winners who weren't breakout hits. "They're not all big successes."

McCreery's second bucket should contain growth-focused but low-risk money markets, CDs and other cash equivalents for short-term needs. The interest is paltry, but "that's safety," said Slater, who handles the portfolio of social media guru Gary Vaynerchuk.

The third bucket should address his plans for 10 to 15 years in the future, when he might want a house down payment. A portfolio of 60% stocks (20% of that in international ventures) and 40% bonds is a solid way to go, Slater advised. The performer could invest in a traditional S&P 500 index fund, basically a composite of 80% of U.S. equities. "It's something that typically for every 10 years outperforms cash, with the caveat that in the last 10 years, nothing outperformed cash," Slater said. On the bond side, McCreery could further ensure his returns with Treasury Inflation-Protected Securities (TIPS). Their interest rate increases as the Consumer Price Index rises.

In his fourth bucket, Slater would have McCreery put higher-risk investments that can build wealth for retirement. Social media and natural gas plays come to mind -- "things that are truly part of the decade ahead," the adviser said.

Whatever the young star does with his money, he needs to drown out the cheers before handing it over. This is no audition. Once he invests, he'll pay penalties to undo any damage. McCreery turns 18 in October, meaning he'll have full control of his assets. Then he can decide for himself on a plan to which he can say, I Love You This Big.

"There is no rush to invest this money now," Slater said. "I have found that making decisions when you inherit money or suddenly become successful are best done over time. Everyone in the world will want to be his financial adviser. Sometimes the best advice is to wait."



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48 Comments

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Margie Nunez Cumming

God Bless Scotty McCreery, I loved and prayed for him.. God bless you sweet heart do not ever forget who got you there ( GOD) And always talk to your parents let them help you in all you do they have been your best friends since day one.

June 07 2011 at 11:16 PM Report abuse rate up rate down Reply
Margie Nunez Cumming

all I can say is God bless Scotty McCreery, his seems like a great and I pray to God he will never who got him there (G God Bless you sweet heart.. Talk to your parents they are great people, let them help in all you do..

MARGIE CUMMINGS

June 07 2011 at 11:09 PM Report abuse rate up rate down Reply
sitemfg

Was this article written because somebody was bored?

June 06 2011 at 5:09 AM Report abuse rate up rate down Reply
Heidiho

American









American Idol my ass. He sucks!

June 06 2011 at 2:32 AM Report abuse rate up rate down Reply
1 reply to Heidiho's comment
Ralstonaj64

Joey,Joey! I guess you have no idea of talent, or know's anything about singing period. Your comment is that of a jealous person wanting something they can't have, and that is what Scotty has. A darn good voice that has already made him a winner, and $250,000 more than you have. Go get a life!!

June 06 2011 at 6:26 AM Report abuse rate up rate down Reply
margieka

Scotty has Great parents and God in his heart. He will be find, when the time comes IF he gets sidetrack just go with what got you there. I miss Carrie Underwood's win but, I really don't keep up with country.music. Grew up on Motown. But, Scotty will be big...why? because he is going to be downloaded into my music collection like Chris Daughty and David Cook. He sang some great songs I loved. Just remember, "At the end of the day be grateful"

June 06 2011 at 1:41 AM Report abuse rate up rate down Reply
JoanPenn

Scotty will have a wonderful career in the country music business. I was so glad that he won. His father also has a great voice. Good luck and best wishes, Scotty.

June 06 2011 at 12:24 AM Report abuse +1 rate up rate down Reply
Roglerlr

Some folks might not like the winner ,but they are not holding on to $250,000 and any Ford he wants to drive. Sour grapes are really abound when our favorites don't win. Scotty is a sure enough down to earth southern country kid. It really shows when he went back home to his friends.

June 06 2011 at 12:02 AM Report abuse +2 rate up rate down Reply
dollibug

Scotty.....you have a great career....and I am sure that the LORD will BLESS you....there will always be
some people who grip about anything and everything....so never mind them....as nothing would please
them anyway.....I think you will do just fine.....you have made North Carolina very proud...
Good luck and take care....do not ever forget where you were raised....the people will always love you.

June 05 2011 at 11:45 PM Report abuse +1 rate up rate down Reply
toinette

Scottie will be around for many years for country fans. For those who do not like country it really does not matter. He has enough country fans to sing along time just like Alan Jackson and Tim McGraw. County will never get old but country singers do and they need some new blood down in Nashville. Can't wait to buy his music.

June 05 2011 at 11:12 PM Report abuse -2 rate up rate down Reply
Michael

My opinion, none of the people they picked should have been on ther show. There were better singers they did not pick. They say every year this is the best we have ever picked B S. This show is on the other side of the hill sliding down.

June 05 2011 at 9:58 PM Report abuse -6 rate up rate down Reply
2 replies to Michael's comment
Danny

I gotta agree they say the same thing every year. Randy especially is a broken record. It doesn't help that some1 with unlimited minutes can vote thousands of times(and they do for one person). Voting is a sham, and I'm not going to say the kid doesn't have a good voice. It never changes though always the same tone. Who would buy a record with the same sounding voice over ,and over,and over,and over,and over again!!! good comment Mike, but be prepared to be voted down because this was a page for the Scotty fans!!!lol

June 05 2011 at 11:18 PM Report abuse rate up rate down Reply
2 replies to Danny's comment
watsonkbsj

Three names for ya... Reba McEntire, Randy Travis and Dolly Parton. Each of them has such a distinctive voice and one can ALWAYS recognize them. So lots of people buy a record with the same sounding voice over and over and over and over.

June 05 2011 at 11:54 PM Report abuse +2 rate up rate down
carentc

Taylor Swift has made it big and all her songs sound the same.

June 06 2011 at 1:36 AM Report abuse rate up rate down
jimmygwrites

I agree. This was a terrible season.

June 05 2011 at 11:24 PM Report abuse -2 rate up rate down Reply