Financial Education Playbook for Athletes 

Financial Education Playbook for Athletes

With great success comes great responsibility. This is especially true with talented athletes, whether coming into their first influx of wealth or established in their careers and looking to cement their legacy.

Regardless of the circumstances, setting up your future for long-term success starts with the same first step: a financial playbook.

Game Plan Move #1: Chart a Course  

• Being an elite performer in your sport is one thing, but when it comes to financial literacy and wealth management, it’s a whole other ball game. Striking a balance between spending and saving can be a daunting task, particularly when planning for the future. It becomes even more challenging when you factor in considerations such as where to invest, which charitable organizations to support, and navigating tax laws.  
• It’s important to remember that your career is likely to be short-lived compared to your overall lifespan. That’s why it is crucial to plan for the future and start thinking about your wealth not just for the present, but also for the next decade.  According to Sports Illustrated*, nearly 4 out of 5 former NFL players either go bankrupt or suffer severe financial distress within two years of retirement. Don’t become one of these statistics – make sure you’re planning ahead.  
• Thinking about a career-threatening injury is never pleasant, but it is a risk that cannot be ignored. Do you have a contingency plan in place? Could insurance be a good option?  In sports, it’s always better to err on the side of caution when it comes to potential injuries.  
• With the accumulation of wealth, the role of athletes within their own family and friend circles tends to shift dramatically. Suddenly, there may be an expectation to care for not only your immediate family, but also your extended relatives and friends. This can become complicated, as the desire to help everyone can put a strain on your own financial stability. While it’s natural to want to be a safety net for those closest to you, it’s important to consider the impact this may have on your own financial wellbeing.  

Game Plan Move #2: Envision Your Wealth Thriving in the Future  

 Shaquille “Shaq” O’Neal wasn’t born into a life of luxury. His family background included a military upbringing and a father who struggled with addiction and was imprisoned.  

 When his career in the NBA skyrocketed, he could have easily indulged in extravagant purchases, but he received valuable advice early on that shaped his financial decisions. The mantra was “It’s not about how much you make, it’s about how much you keep”. He invested and saved shrewdly, which allowed him to support more individuals and donate to more charities over the long term.  

• Manage your incoming wealth wisely and become investment savvy for the long-term. Conduct research and seek out trusted partners who can guide you.
• Set clear limits on financial assistance and gifts.  While helping others is a noble deed, it’s essential to be mindful of the potential long-term negative consequences. This is particularly true for athletes, whose earnings are widely known and publicized. Don’t let unchecked generosity lead you down a path of unintended harm.
• Create a mindset around becoming a good steward of your finances. Save and invest for the long term so you can live off the income from your investment portfolio.

Game Plan Move #3: Maintain Discipline  

• Set boundaries. It’s important to decide who you are willing to support financially. Consider prioritizing and providing for only your parents and immediate family.  Remember, it is not your responsibility to provide for everyone.
• Structured spending.  If you are a seasoned athlete who has made financial mistakes in the past, it’s important to acknowledge that you can’t change what has already happened. Instead, focus on the future and make a commitment to manage your spending habits to secure a comfortable retirement for both you and your loved ones.
•  The Importance of Responsible Giving. Giving back to your community in an intentional way that empowers others is rewarding and important. Keeping track of your donations and investing for the future will ensure that you can continue to help others over the long term.
• Vet financial advisors: Your financial advisors should be affiliated with a reputable firm and have a proven track record of helping others manage their wealth wisely.   

Conclusion

It is important to think ahead and plan for financial stability, regardless of whether you are just starting out in your athletic career or are an experienced player. Don’t just think about your present wealth, also consider what the next decade holds for you.  

A Rockefeller Private Advisor can assist in being a trusted partner throughout an athlete’s career –from rookie season to retirement- as they navigate their complex journey to long-term financial success.