You’ve made it to the show. The hard work, persistence and dedication have paid off. That means now is a good a time, perhaps the best time, to look beyond your playing days. If this strikes you as over-cautious or unnecessary at this point in your career, don’t be fooled.
A few years ago, ESPN aired a film called “Broke.” It featured professional athletes led into bad investments, stalked by freeloaders and lavish lifestyles gone bad. All too often, athletes get a wake-up call regarding the harsh financial realities they face only after the big salary (and their days as a player) have come to an end.
Sad stories about professional athletes gone broke are plentiful and often tragic. What makes these stories most heartbreaking, however, is that they all seem to involve too many bad decisions which could have been avoided — Antoine Walker, Lenny Dykstra and many more come to mind.
Smart planning now, and acceptance of the fact that you won’t be playing forever, can help ensure you accomplish your most important financial and life goals outside of sports, as well as achieve long-term financial security.
To protect what you have earned and to prepare for a successful and fulfilling life after you’re finished competing, there are a number of important steps you should consider taking. Here are three to help you get started managing, safeguarding and planning ahead for your hard-earned career earnings:
1. Put together your financial team.
You will want to work with trusted advisors. Create a team that includes a CPA, a fiduciary wealth advisor and your sports management professionals. Ensure that you have done your due diligence and select a team that is passionately committed to making YOUR best interest their chief objective. In a wealth advisor, look for someone who offers attentive service and a customized, comprehensive financial plan; seeks to achieve your goals through strategic advice; focuses on advice, not products; practices full disclosure and is transparent about costs; has a fee structure aligned with clients’ best interests; and takes advantage of academic research. Understand how each member of your advisory team can help you secure you and your family’s long-term financial freedom. Put them to the test. For example, if a wealth advisor is recommending you purchase certain investments, ask them to show you their own investment portfolio. If your advisory team isn’t eating its own cooking, why would you?
2. Plan for life after sports NOW.
The day will come when you have to hang it up. Of course, that should be the furthest thing from your mind when you are on the playing field. But off the field, prep should start now. When the knees start to go and that 40-yard dash begins to feel like a marathon, the window to maximize the impact of a well-constructed financial plan is already closing. It’s never too late to start planning, but it’s better to begin early in your career. Start laying the ground work for “Plan B” now.
3. Protect yourself.
Envision your first paycheck as if it were your last. Create a budget. Otherwise it can be too easy to spend through your money, no matter how much you have made as a professional athlete. Cars and homes aside, friends and family will all want a piece. Bad financial decisions, which can look good at the time, are easy to make without the right team behind you. You will receive many requests for money from friends, perhaps friends you didn’t even know you had or friends you’ve never met before. People will try to sell you stuff. Learn how to say no. Certainly, it’s ok to spend your money and help out family. But first make sure the amount you are spending or helping out with is factored into your budget and accounted for in your long-term plan for financial security.
So consider taking these first three steps as you begin to think about your financial future, and good luck on the field!
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