How to Earn More on Your Bonus with Max

Bonus season: It’s time to jet away.

It’s almost bonus season, which means it’s time to think about what you’ll do with the money you earn — and how you’ll get that money to work harder for you. In today’s rising-interest-rate environment, your bonus can earn more before you spend it. 

Where should bonus checks go? Researchers have found that it’s experiences that make people happy, not objects. Spending money on vacations, theater tickets, parties, and memorable dinners out can lead to more happiness than big-ticket purchases like cars, jewelry, or clothes. Some people also find happiness at the nexus of things and experiences, for instance with summer homes, which are both an asset purchase and a venue to get family and friends together.

Investing for the long term is also smart. A bonus is a good way to pre-fund a higher-education 529 account for college-bound children or grandchildren, for instance. Tax rules allow you to contribute 5 years’ worth of your allowable contribution at once; check the IRS website for details. Or set aside an amount you’d like to put into equities or fixed income investments, and use dollar-cost averaging to buy a small amount each week or month. This method allows you to you get the best average price for the whole investment.

Many choose to keep their bonus mostly in cash, either to wait for an investment opportunity to become available — if the market falls, for instance — or because they’re anticipating an expense in the future, like a tuition bill or a private-equity fund capital call. Some firms also have regulatory or compliance rules around what investments employees can buy, leading many professionals, like attorneys and traders, to keep their bonuses in savings accounts.

While that money is in the bank, it’s only smart to make sure it’s earning the most interest possible. Many investors may not realize it’s possible for a bonus check to earn more than 1% in interest in FDIC-insured savings accounts — ten times the national average.

At Max, the focus is on helping individuals and their financial advisors earn more on cash within their portfolios, while keeping within federal deposit-insurance limits for safety. Letting your bonus grow with interest means more money to spend later when you decide what to do with it. Learn how.

Rates Rise; Max Members Cheer

Fed Chairwoman Janet Yellen speaks at a press conference to announce the central bank's rate increase on December 14, 2016. Photo credit: Federal Reserve via Flickr.

Fed Chairwoman Janet Yellen speaks at a press conference to announce the central bank’s rate increase on December 14, 2016. Photo credit: Federal Reserve via Flickr.

Since the Federal Reserve last raised interest rates in December 2015, investors have been waiting for the central bank’s next move. Now Chairwoman Janet Yellen and her board have done what the market expected and raised rates by 25 basis points (0.25%).

Analysts expect that this will be the start of a period of increased rate volatility. In 2017, the market anticipates three to four more rate hikes, as the Fed climbs out of the near-zero rate trough that accompanied years of quantitative-easing after the 2008 global financial crisis.

Rising rates are a conundrum for investors. They bring the promise of more interest earned on new or floating-rate debt, but they also mean that investors now have to make sure their investments are earning the best rates.

Bank deposits will likely move higher now that the Fed’s rates are increasing. Investors who keep cash in the bank or in brokerage accounts should monitor their financial institutions’ rate moves to be certain their money is earning the most advantageous rate.

That’s not a problem for Max members. Max automatically reallocates cash to a member’s highest-yielding online savings accounts. Members don’t have to think about which of their banks is paying more in interest, or about whether they’ve exceeded the FDIC deposit-insurance limit on their bank deposits.

As the Fed continues to raise rates, it’s likely that the spread between the interest rates paid by brick-and-mortar banks — practically zero — and online banks will widen. Online banks, which have a lower cost structure because they don’t have branches, are likely raise their rates on savings accounts more rapidly. This also means that Max members will benefit, since Max works by optimizing members’ cash balances across online savings accounts.

In a rising interest rate environment, Max can help investors to stay current with the highest rates they can earn on their cash. Currently, Max members are earning .70% to .90% more than the national average.

We also work with financial advisors to help their clients earn more on cash in bank or brokerage accounts.

To learn more about how Max can help you, visit MaxMyInterest or MaxForAdvisors.com.

Money Market Funds: How New Rules Affect Cash

Max solves the liquidity problem that money market funds suffer under new rules taking effect in October 2016.

Max solves the liquidity problem that money market funds suffer under new rules taking effect in October 2016. CEO Gary Zimmerman explains in this video.

Money market funds once were considered equivalent to cash. No longer. Under new rules that take effect October 14, 2016, money market funds may not be liquid in periods of market stress, meaning you may not be able to access your cash when you need it most. These changes will also affect how investors and their financial advisors think about money market funds in their portfolios.

The advantage of a money market fund was that shares of these funds behaved like cash. Their value held steady at one dollar per share and investors could buy and sell them at any point. Money market funds were viewed as a safe place to park cash, while earning slightly higher returns than a bank account.

The 2008 global financial crisis showed that these funds may not always be safe. When the Reserve Primary fund “broke the buck,” watching its shares dip below $1 for the first time, it sparked investors’ fears that their cash held in money market funds might not retain its value. The funds weren’t really cash after all.

In July 2014, regulators instituted new rules that are scheduled to take effect next month. These regulations alter how money market funds trade. Now, institutional money market funds — the shares of which are held by pension funds and other large institutions — must let their share price fluctuate according to the market, as all other mutual funds do. That means the shares may not always be worth $1.00. (Retail funds, owned by individual investors, will continue to have a mandated $1 share price.)

The main effect of the new rules on individuals will be to allow money market funds to limit investor redemptions in the event of extreme market volatility, and to impose fees on redemptions in such cases. Investors who wish to sell their shares when the markets are turbulent may not be able to do so, as these funds can impose gates on redemption for 10 days.  Investors may also have to pay a fee to redeem their shares too.

If it costs extra to get your money back, and the funds can wait 10 days to return your cash to you, is a money market fund still the same as cash? Many investors and their financial advisors don’t think so. They are increasingly looking at higher-yielding, FDIC-insured savings accounts at online banks as a place to put cash to keep it safe and fully liquid.

Max can solve this problem. As an intelligent cash management service, Max automatically allocates investors’ cash between their existing checking or brokerage account and a portfolio of higher-yielding FDIC-insured savings accounts at the nation’s leading online banks. Most Max clients are earning more than 1.00% on their cash, with full FDIC insurance of up to $1.25 million per individual or $5 million per couple. By contrast, many bank or brokerage accounts pay only 0.01% or 0.02%.

Max is not a bank, nor does it provide financial advice.  Max is a technology-driven tool that automatically  helps clients spread their cash among higher-yielding online savings that they hold in their own name. Clients retain direct access to their funds, maintain their relationship with their primary checking-account bank or brokerage firm, and can continue to use all bank services like notaries and tellers. And, unlike money market funds under the new regulations, there are no gates to redemption, and no extra fees to withdraw money.

In addition to delivering a higher-yielding solution to clients, financial advisors can bring more cash into view, fostering more holistic asset allocation discussions and growing AUM.

Learn more about the Max Advisor Dashboard and how to get started with Max by visiting MaxForAdvisors.com. Or contact advisors@maxmyinterest.com with questions.

 

Questions Clients Ask Advisors About Max

High net worth households currently have 23.7% of their holdings in cash.

High net worth households currently have 23.7% of their holdings in cash.

When clients hear that they could earn more on their cash without sacrificing liquidity or giving up FDIC insurance, they are often surprised. Aren’t banks paying almost 0% in interest now?

It’s a conversation we hear frequently at Max, where we are working to help financial advisors and their clients maximize the interest they earn on cash in the bank.

Max is an intelligent cash management service that automatically allocates clients’ cash between their existing checking or brokerage account and a portfolio of higher-yielding FDIC-insured savings accounts at the nation’s leading online banks. Most Max clients are earning more than 1.00%.

Clients, and advisors, frequently have questions about how Max can accomplish this goal. Here are some real-life comments they’ve made:

 

“Please look into this opportunity to earn more interest on cash.”

“[Your financial-advisory firm] is behind the times. You guys need to establish a relationship with Max so I can earn better interest on cash.”

“Have you heard anything about this outfit? I read about them in The Economist. They claim to move funds between bank accounts to optimize interest rates. The advertising implies that they can get around 1% versus whatever bank you have is paying.”

“Any chance [your financial-advisory firm] would offer this?”

“I saw a reference to this website in the WSJ and found it to be pretty interesting. Please take a look and we can discuss when you come to Boca.”

 

The reason clients are curious about Max is that the average savings account in the U.S. pays 0.11%, with many bank or brokerage accounts paying only 0.01% or 0.02%. That means Max members are earning about 10 times as much on cash as the average, and considerably more that they earn in a brokerage account.

How does Max help clients earn more on cash? Online banks are more efficient than brick-and-mortar banks. Without retail branches, their lower cost structure allows them to pass along more yield to clients who deposit cash with them. And by optimizing clients’ cash across several online banks, Max helps keep cash within the FDIC deposit-guarantee limits.

For financial advisors, offering Max to clients has the effect of bringing held-away cash into view. Over time, clients migrate cash towards Max, where they can grant their financial advisor read-only access to their balances through the Max Advisor Dashboard (a free service for financial advisors.) With the ability to see the cash that clients are holding, advisors can spark a new conversation about portfolio allocation, and often nudge some of this cash into higher-beta asset classes.

Max is not a bank, nor does it provide financial advice.  Max is a technology-driven tool that automatically optimizes a client’s cash balances among accounts at online banks held in the client’s own name. Clients retain direct access to their funds, maintain their relationship with their primary checking-account bank (or custodial account at Fidelity or Schwab), and can continue to use all bank services like notaries and tellers.

Learn more about the Max Advisor Dashboard and how to invite clients to Max by visiting MaxForAdvisors.com. Or contact advisors@maxmyinterest.com with questions.

Keep Your Bank, Max Your Cash

With Max, earn more on your cash while keeping your existing checking account, or using a brokerage account.

You’d like your cash to earn more — but you don’t want to switch banks.

Enter Max, an intelligent cash management service for intelligent investors. It offers a way to see all your cash at once, while earning you higher yield and obtaining broader FDIC insurance coverage. Max even simplifies tax season, delivering all 1099-INT statements by email in a single password-protected PDF.

Max works with your existing checking account — unless you’d rather open a new checking account or use your brokerage account. Here’s how:

 

Transactional Checking Account

Most investors have a checking account at a bank that they use to pay bills, accept direct deposit of their paychecks or partnership distributions, and manage their household finances. Many Max members link this checking account to Max, because they value Max’s automated optimization that restores their checking account to their pre-set target balance each month..  For example, if you tell Max that you wish to keep $30,000 in checking, but Max finds only $22,000 at the time of your monthly optimization, it will pull $8,000 from savings to bring you back to your target balance of $30,000.  Similarly, if Max finds excess cash sitting in your checking account, it will automatically be swept to your online savings accounts, where it can earn more. We typically advise that clients set their target checking account balance to be slightly higher than their monthly working capital needs, to ensure an ample cash cushion.

 

Separate Checking Account

Some Max members elect to open a new checking account reserved specifically for Max. They move into this account any funds they wish to optimize, link their online savings accounts, and start optimizing. Often they set a low target balance on this checking account, since they don’t plan to use it for any purpose aside from Max.

This setup functions much like a separately managed account, allowing members to cordon off a specific amount of cash to be optimized, separate from the other cash in their portfolios, and not impacted by their daily transactional activity. They can view and manage this cash from the Max dashboard, and when they need to access this cash, they can move it back to the checking account using Max’s Intelligent Funds TransferSM feature, or wire it elsewhere directly from their online bank accounts. It’s easy to open a new checking account online, without visiting a bank branch.

 

Brokerage Account

Many people keep a significant portion of their cash in their brokerage account. Max supports bank and cash management accounts at brokerage houses including Charles Schwab Bank and Fidelity. This strategy takes full advantage of Max to garner additional FDIC coverage and higher interest rates on the cash that’s not currently invested. Most brokerage accounts pay less than 0.1% on your deposits, while the Max average is 1.00%. Historically, investors who chose to maintain cash as dry powder, on hand to deploy when market opportunities presented themselves, typically lost out on the ability to earn interest on these funds. With Max, that’s no longer a problem. You can earn dramatically more while keeping your cash liquid and easily accessible, within reach when it’s time to trade.  Since the average HNW investor is holding 23.7% of his or her portfolio in cash, picking up an extra 0.90% of interest income on cash is equivalent to earning an extra 0.21% across your entire portfolio.

Learn more about setting up your Max account or read our one-page setup guide. Have questions? Ask Max Member Services at member.services@maxmyinterest.com.

Fiduciary Solutions for Financial Advisors: How to Think About Clients’ Cash

Max members are earning about 10 times more on their cash than the national average.

Max members are earning about 10 times more on their cash than the national average.

With the move towards the fiduciary standard across the investment-management landscape, financial advisors increasingly are looking at how they can make sure their clients are getting this standard of advice for the cash portion of their portfolios as well as for their securities. That’s where Max comes in. 

Cash is the one asset class that’s present in every portfolio. But a near-zero-interest-rate environment over the last few years has meant that investors overwhelmingly are earning almost nothing on cash. The national average on savings accounts is 11 basis points — 0.11%. As a fiduciary, an advisor is bound to give advice that’s in a client’s best interest financially. For cash, this means advisors have to seek out ways that clients can earn more interest while remaining insured under the FDIC deposit guarantees.

– Think carefully before using money market funds

Money market funds are a traditional substitute for cash, because they’re designed always to trade at a stable $1 per share. But with new regulations, these funds may now be able to hold onto investors’ money if markets are in turmoil. That means that clients may not be able to get their money out of a money market fund when they need it most. With this lower level of safety, and essentially no yield, money market funds may not be up to the fiduciary standard as a cash equivalent.  

– Use online banks

Online banks don’t have branches, so their cost structure is considerably less than their brick-and-mortar competitors. This imbalance allows them to offer higher interest rates to depositors — above 1%, in some cases, making online banks the highest-yielding places to park cash that clients wish to keep fully liquid. FDIC-insured online banks have the same federal deposit guarantee as any other U.S. bank protected under the program.

– Seek more FDIC coverage

Many investors don’t realize that exceeding the FDIC limits in their accounts means that excess money may not be safe if something happens to the bank. If your clients hold more cash than the FDIC limit — $250,000 per depositor, per account type, per institution — you should consider helping them open accounts at additional banks to gain FDIC coverage for as much of their cash as possible. Keeping cash safe is a prerequisite for fiduciaries.

– How Max can help

It’s possible to get both higher interest on cash and greater FDIC coverage. That’s what Max provides for advisors and their clients through the Max Advisor Dashboard. The average Max client is currently earning more than 1.00% on cash and enjoying FDIC coverage across several institutions. Learn more about how you and your clients can benefit at MaxForAdvisors.com.

What to Do with Your Extra Max Interest This Summer

Mackinac Island's celebrated Grand Hotel.

Mackinac Island’s celebrated Grand Hotel.

It’s summertime — and Max members continue to accrue extra interest on their cash in the bank. We’re taking a look at some of the fun things you can do with the money you earn, which you wouldn’t be earning without Max optimizing your cash.

If you keep $1 million optimized through Max, you’re going to earn about $2500 additionally this summer. Some ideas to consider:

  • Video Drone

Drones are a great way to see new terrain or get fantastic video from the sky. For the sport-minded, there’s also drone-fighting. This $2300 camera quadcopter has 4K video and 2 controllers, one for the remote pilot and one for the cameraperson.

  • The Perfect Chair

Is it time to update your decor? Coveted handmade furniture and pottery from Vermont’s husband-wife duo Charles Shackleton and Miranda Thomas always looks tasteful. The couple recently opened a new Brooklyn shop, giving their works access to elegant brownstone living rooms. A pair of walnut Ricardo chairs upholstered in green fabric is $2600.

  • Pastry Chef Boot Camp

Learn to make better eclairs than you can buy in a fine French patisserie. A 3-day dessert boot camp at the ultra-serious Culinary Institute of America’s Napa Valley campus will show you how. $2600 for two people.

  • Make a Difference with Robinhood

Fight poverty by supporting Robinhood, the largest nonprofit in New York doing this work. Max members can set their Max accounts to donate some or all of the interest they earn directly to Robinhood.

 

A Max member with a $250,000 account will earn an extra $625 this summer. Some fun ways to spend it:

  • Luxury Fitness Classes

Boutique fitness studios are the new trend. They’re more personal and rigorous than a typical gym, with classes that make you work hard. SLT (Strengthen, Lengthen, Tone) has attracted serious fitness nuts in New York City and elsewhere. $680 for a 20-pack of classes will keep you in good shape all summer.

  • Championship Golf Clubs

Up your game with some of this year’s hottest new clubs.

Driver: Cobra King F6+ Pro $400

Fairway wood: Ping G $270

  • Historic Island Resorts

Off the coast of California south of Los Angeles is the celebrated Catalina Island, a historic resort long popular with Angelenos. At the Avalon, a top-rated hotel, you can recline on the rooftop terrace while looking out into Avalon Harbor.  Two nights in a king room with a garden view will be about $700 on a weekend this summer.

Or visit the Grand Hotel on Michigan’s Mackinac Island, an elegant resort where midwesterners have been vacationing since 1887. For about $700, a deluxe room at the hotel includes breakfast, lunch, and a 5-course dinner.

  • Meet the Animals

Why jostle with crowds to see the animals at the San Diego Zoo when you can meet them up close? The world-famous zoo’s exclusive VIP Experience is $599 per person, plus zoo admission, and comes with behind-the-scenes interactions, a personal tour guide, and lunch.

  • Leave Holding the Bag

Suede envelope clutch bags are sweeping the fashion magazines. The Christopher Kane studded suede clutch is $645 while Mansur Gavriel’s Flamma suede envelope flat clutch is $695.

  • Buy the Cow

For $500, the international nonprofit Heifer will donate a female cow to a needy family in the developing world. A cow yields milk for the family’s children as well as income, since they can now sell milk to others. The money they earn can pay for food, school, and housing, helping them climb out of poverty. Heifer is one of the most respected development nonprofits.

When Your Bank Deposits Aren’t FDIC Insured: Why Deposit Insurance Matters

Understanding FDIC limits can keep your cash safe in the bank.

Understanding FDIC limits can keep your cash safe in the bank.

 

When the stock market experiences choppiness and the global economy teeters, investors wonder about the safety of their money in the bank. In the U.S., we’re fortunate that our cash, with certain limitations, is protected by the Federal Deposit Insurance Corporation (FDIC). This means that as long as you keep your deposits within the limits, your cash in the bank is safe, no matter what happens to the bank.

Here are 5 things to know about the FDIC and your money.

 

FDIC insurance limits

During the global financial crisis that began in 2007, the FDIC limit was raised from $100,000 per depositor, per account type, per institution, to $250,000. This means that a couple can keep $1 million in a single bank: $250,000 in the first spouse’s name, $250,000 in the second spouse’s name, and $500,000 — or $250,000 each — in a joint account held in both their names. If you hold more than this amount in cash, you may want to open accounts at multiple banks.

 

Banks involved

Most U.S. banks are part of FDIC. Those that are will display the FDIC logo on their website and in their branches. If you don’t see it, ask, or check the FDIC website.

 

What’s covered

Here’s the list of accounts that the FDIC insures at banks: “checking, NOW (Negotiable Order of Withdrawal) accounts, savings accounts, money market deposit accounts, and certificates of deposit (CDs).” Note that money-market funds are not a bank product and don’t fall under FDIC protection. What’s also not covered are any investments you hold: “stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if you purchased these products from an insured bank or savings association.”

You can check to what extent your own accounts are covered with the FDIC’s Electronic Deposit Insurance Estimator.  

 

Ways to get more coverage

Some banks hold multiple bank charters and may spread your deposit accounts across these charters. That will increase the amount of FDIC insurance you are entitled to claim. Ask your bank about this.

 

Managing your accounts

If you hold a significant amount of cash, spreading it out among different institutions in FDIC-insured parcels is a smart way to increase your amount of deposit insurance. Be sure to monitor the accounts so that your cash doesn’t exceed the limit at each bank. Max handles this automatically for members. Learn how Max can help you optimize your FDIC-insured cash.

Guest Post: Where to Go When Cash Is King

James Sanford of Sag Harbor Advisors

James Sanford of Sag Harbor Advisors

With interest rates remaining low, many investors wonder how to evaluate the safety of various places to keep cash. Max invited financial advisor James Sanford of Sag Harbor Advisors, a performance-fee-based wealth manager, to talk about how best to think about choices for cash in a portfolio.


By James Sanford

With the Federal Reserve now expected to wait at least until the December meeting to end 8 years of zero interest rates, and some strategists putting the first lift-off out to March or June of 2016, it’s time to revisit where to put your cash when cash is king. Two-year Treasury notes are now down to 63 basis points. Emerging market weakness in China and commodity-centric nations led to a 12% decline in the S&P 500 from July through September 28, and a surge in the Volatility Index (VIX) to over 40. If you’re with me in the camp to move a substantial amount of the portfolio to cash after the Central-Bank-fueled reversal rally of more than 10% since October 1, it’s important to understand where your broker or advisor places your cash, which is called the “cash sweep.” If swept into money market funds, you’re not in cash at all, but merely a basket of short-term risky securities that earn a paltry yield of zero to 15 basis points.

First, these underlying securities contain corporate credit risk of default like any other corporate bond. Second, there’s no legal guarantee of a “par put” from the manager. Money market funds routinely maintain a fixed $1.00 par value, rather than mark to market, a convenient shell-game trick which completely hides the underlying volatility of the basket of securities in the portfolio, convincing the holder he owns a “cash equivalent.” What he actually owns is a portfolio of risky corporate senior unsecured-debt obligations, which despite their 7, 10, or 90-day maturity, are equal in recovery and default risk to corporate long bonds maturing 10 and 30 years from now. Some money market funds hold tax-free municipal bonds. These are commonly considered “risk free,” which is absolutely not the case, as investors learned the hard way in Detroit, several cities in California and Rhode Island, and, soon, Puerto Rico.

Usually the portfolio in a money market fund doesn’t move at all in price, due to its very short duration. That’s until a shock event hits one of the securities, which was the case with the Lehman Brothers default. Lehman, opened up Monday morning, September 15, 2008, at a bid-offer of $10 to 12 cents on the dollar.  Suddenly this “cash” equivalent lost 90 cents on the dollar. Roughly 35 to 40% of all investment company assets are comprised of money market funds, with 80% of corporations using money market funds to manage their cash balances, and 20% of household cash balances comprised of money market funds, according to a 2009 SEC report.

There is an investor perception that money market funds are insured by the manager due to the “never break the buck” concept. In fact, there is no legal requirement or guarantee that money managers must “never break the buck” or shield investors from losses. Many managers in 2008 compensated investors for losses in money market funds, because it was good for business and they had the capital. Those without the capital, such as the Reserve Fund, did not. Nobody legally had to.

So what advice would I give investors, as a financial advisor? Keep your cash in short-term T-bills? But there is very little if any interest. Take duration risk on longer dated Treasuries?  No.

The answer is more obvious then we think: it’s your common bank savings account. Investors can earn up to 1.1% on internet-only savings accounts that are 100% FDIC guaranteed, a guarantee as solid as U.S. Treasury bonds, yet one that offers overnight liquidity and no duration risk. In fact, investors would have to go all the way to the three-year note to earn a yield equal to the highest available online savings rates of 1.1%.  The counterparty risk of the bank offering the rate is immaterial. As long as it’s FDIC guaranteed, even in the event of an FDIC bank seizure, accounts holders with $250,000 or less, or $500,000 in a joint account for couples, will have unrestricted access to their cash. If the FDIC can’t honor its agreement, all investments will be set to zero. That would be the equivalent of a U.S. government default.

Advisors often don’t like using a savings account as the cash sweep option, as they can’t control the assets. At Sag Harbor Advisors, our clients’ advisor accounts at our custodian are linked via the ACH system to any bank account of their choice, and clients sign over authorization to draw specified funds back to the advisor account should we see market opportunities. For cash holdings that are well north of the FDIC limits, MaxMyInterest is the only way to efficiently manage funds.

Ask your advisor where your cash sweep is, what it’s yielding, and you might find it’s not really “cash” at all.  

 

Know When to Jump: Q&A With Olympic Silver Diving Medalist Scott Donie

Scott Donie competes in the 1992 Olympics, high above the city of Barcelona. Photo Credit: Rol Donie.

Scott Donie competes in the 1992 Olympics, high above the city of Barcelona. Photo Credit: Rol Donie.

Many people work hard at a sport they love, but few achieve worldwide success. Why are these athletes different, and what can the rest of us learn from them? Max spoke with Olympic medalist Scott Donie, a diver who won silver at the 1992 Games in Barcelona. Now the head diving coach for both men and women at New York University, Donie also runs a diving-lesson program at local swim club Asphalt Green in Manhattan. He serves as a mentor for United States Diving, as well as speaking to audiences around the country about his sport.

We asked Donie about his proudest and scariest moments as a diver, and what’s next for him.

– Many amateurs enjoy their sport but don’t feel they can take it farther. How did you get serious about diving?

One of my main motivations was always fear. I developed a severe fear of heights and water at a very young age. I still have a fear of heights!  But then when I was 8 years old three things happened that changed my life forever. The first was discovering the sport of diving. I was on the swim team at my local summer club and I didn’t like swim practice. I started sneaking out in the middle of practice to jump off the diving board. The swim coach saw what I was doing and suggested that I ask to join the diving team. The second was getting a trampoline. My brother and I had been to a friend’s house who had a trampoline and we begged our parents for one until they finally relented. It came with one condition: we had to have trampoline lessons. The next thing I knew I was on that trampoline every single day. 

The third was seeing the Olympics for the first time. It was the 1976 Olympics and I saw Bruce Jenner win the gold medal in the decathlon. I remember watching as he ran a lap around the stadium waving an American flag. I felt like he had unified our entire country and in some sense the world in that moment. I didn’t know what the Olympics were but I knew I wanted to be a part of it. From that day forward I started telling everyone that I was going to be in the Olympics for diving. Luckily I had parents who were extremely supportive and coaches who also believed in me.

– Aside from your Olympic medal, what’s your proudest diving-related moment? 

My comeback in the final season of my career. After winning the silver medal in 1992 I had a very difficult road back to the Olympics. I lost my way and became very disillusioned with everything. I suffered from severe depression and eventually I had a very public meltdown while competing at the 1993 Olympic Festival. I hadn’t been training properly and I was out of shape. In the middle of my handstand on the edge of the 10 meter platform I started to question everything. Why am I doing this? What is the point? Maybe I should do a spectacular cannonball! Of course the time to have such conversations is not while standing on your hands on the edge of a 10 meter platform. After about 40 seconds my arms pretty much gave out and I decided it was best to come down. I signaled to the referee that I was done and I walked down. I never competed again on the 10 meter. I ended up taking six months off and I got a job as a teacher. After a little time away I decided to come back to diving but to stay on the lower level of the 3 meter springboard. I was not ranked very high on this event but I worked my way up until I was among the contenders for a spot on the 1996 Olympic team. I ended up winning the Olympic trials and placing 4th at the Olympics. I am just as proud of that as I am of my season in 1992.  

– What’s the craziest thing that’s ever happened to you as a diver?

I was once asked to do a dive off a 50-foot high mast of a sailboat for a commercial. At this point in my career I was pretty comfortable with heights but climbing up the mast of a sailboat was another thing altogether. There was a stunt coordinator who had built me a tiny platform at the top of the mast. I hadn’t realized the motion of the boat would cause the mast to sway back and forth quite a bit at the top. It was terrifying. I was holding on for dear life as I swayed back and forth. When the director yelled, “Action!”  I had to time my dive correctly to make sure I wouldn’t hit the boat. After my first dive the director asked me how many times I could do it. I wanted them to get the shot so I said “I think I can do about five.” What I should have said was, “You actually want me to do that again?” 

– How do you use what you’ve learned in the pool in the rest of your life? What lessons can others learn? 

I have definitely learned a lot about fear. When I tell people that I am afraid of heights they always ask me, “How did you overcome it?” I tell them that I didn’t overcome it; I’m still afraid of heights. I felt that fear every time I climbed up to the 10 meter platform. And don’t ever ask me to join you for a hot air balloon ride! I think the key is to allow yourself to feel the fear.  Fully acknowledge it. But never let that fear stop you from doing whatever it is that you want to do. Fear is actually there to help you and protect you. If you let yourself feel it you can use it to help you sharpen your awareness and your focus. If you are completely focused on what you’re doing the fear begins to work for you instead of against you. The same lesson can be applied to nerves. The thing I miss the most about diving? Getting nervous.

In the beginning I would fight the nervousness and try to control it. That never worked for me. Then I came to understand that getting nervous was my body’s way of preparing for battle. I began to welcome the nerves and eventually I came to depend on them.    

– What’s next for you? 

We have a 9-year old daughter who keeps us pretty busy. She is into a lot of stuff and really enjoys gymnastics. She just joined the team at her gym so I will be supporting her on whatever path she chooses. I am excited to learn more about the gymnastics world as it is so directly related to diving. There is nothing a diving coach likes more than getting a student who comes from a strong background in gymnastics. I’d love to help foster better relationships between gymnastics programs and diving programs.  I’d also like to start my own club program here in Manhattan. I’d like to help make the sport of diving available to everyone.