The life of a professional athlete appears to be very exciting and stress-free on the surface. Your athletic skills surpass most normal individuals, providing you the ability to earn a higher than normal income, possibly leading to a luxurious lifestyle. Even if you do not yet have the financial ability to lead a comparable lifestyle to other higher profile athletes, it does not seem to stop some athletes from trying.
The average person has heard the old adage, “Keeping up with the Joneses”; some athletes look at the highest earning players in their profession and attempt to model their lifestyles. Depending on the stage of your playing career, you must understand both your short and long term financial needs. Being able to adapt to constant financial changes from year to year is an important concept to learn. Injuries, trades, contract disputes are just a few of the reasons you may need to learn to adapt financially, very quickly.
Since most athletes playing careers can be short, any mistake, small or large, can have a significant impact on your financial success. An athlete can earn significant sums of money at a very young age, leading to the temptation to over-spend as if this level of income will continue for decades. These unhealthy money habits can have a major impact on the ability to reach your financial goals for the short and long term. Learning to change unhealthy financial habits can be very difficult without the proper guidance from an advisor who has experience handling these types of situations.
The diverse types of challenges that athletes face can be out of the norm for the average person. The role a financial advisor plays in keeping those challenges at a minimum can be significant. Training, family, friends, businesses, coaches, teammates, fans, media, social media, investments, endorsements, etc., can become constant distractions affecting your daily life. Like most famous individuals, your lives may become an open book for all to see and judge.
As an athlete, finding a financial advisor to help educate and provide guidance is a very important step in your career. Trusting a stranger with your hard-earned money can be very difficult. The best approach an athlete can take is to find an advisor that understands your unique situation, has plenty of experience and will act in your best interest first and foremost. A financial advisor who will assist with creating a strategy based on your needs and help you stay on track by helping you maintain perspective on current events, without losing sight of the bigger picture. In addition to external factors like market challenges, there are personal events that can impact planning that may be even more emotional. A financial advisor can help streamline and prioritize decision-making during turbulent times so that you can stay focused on what is important to you.
Because of the diverse types of issues that you may face in your career, you should interview a select group of financial advisors to help you reach your financial goals. Just like a player has a set of coaches for their team, tax advisors, financial planners, insurance specialists, agents, and business managers are just a few of the types of financial coaches available to help guide an athlete’s life. These types of advisors allow you the ability to focus on your sport and not have to worry about the day to day issues. Sometimes the relationship with a financial advisor can become so strong that it crosses over into an athlete’s personal life. You may feel comfortable enough to have them help you resolve personal issues by becoming a mentor, teacher, parental figure or accountability coach.
Dealing with discussions involving investments, taxes, estate planning, the stock market, cash flow, insurance, contracts, and budgeting can be overwhelming for an athlete with little or no financial experience. Working with a financial advisor can help take complex issues and make them easier to understand, allowing you to gain a deeper level of knowledge, thus increasing your level of trust in the advice given. Since each athlete can have his or her own way of learning, utilizing a simple “What, Why and How” strategy can aid in your success.
- What is the game plan or goal you’re setting up to help you succeed?
- Why following a game plan or setting a goal is important?
- How implementing a realistic game plan or goal will allow you to succeed
By being an elite athlete, you may be predisposed to this type of direct goal-oriented coaching approach and may feel more comfortable and/or less resistant to following through. This will allow you to gain confidence in understanding your role and responsibility in your own success by being better informed and making better life choices. Just as you put in a tremendous amount of work to be the best at your sport, your team of financial advisors should work just as hard to help you achieve your financial goals and feel confident about your future.
Read more on moneysmartathlete