An athlete’s main goal is to become wealthy and successful. Unfortunately, many athletes have not been educated to be as skilled with finances as they are in their sport. In particular, some athletes grew up in communities with high levels of economic need where there weren’t many conversations pertaining to the importance of managing money. As a result, it may be tempting for an athlete to spend their earnings on unnecessary purchases such as fast cars and luxury brands before learning to save. This can be disastrous because, with a limited career time frame generally, an athlete’s money can be gone within a heartbeat.
It is important for athletes to learn to manage their money or find professionals who can work on their behalf. According to Gregg Lunceford, a wealth advisor who works with athletes at Mesirow Financial, proper counseling helps athletes understand potential risks and rewards so that they can make better decisions about their assets. Gregg Lunceford suggested, “On payday, pay yourself first.” This is really important because athletes need to know how to prioritize and put first things first. As mentioned previously, athletes may waste their money on luxurious items and forget to save because they think they will keep earning the same amount of money their entire life. However, according to Time Magazine, 78% of NFL players face bankruptcy or financial stress within two years of retirement. That same article reported that the rate of NBA retirees going broke within five years of leaving the court was as high as 60%.
The idea of declaring bankruptcy is far from an athlete’s train of thought at first; the only thing they can see is the lavish life of a successful athlete in the media. However, athletes get blinded by their own success and don’t take into consideration that maybe one day they could have an injury that would mark the end of their careers. Planning accordingly is necessary to ensure that an athlete can maintain a comfortable lifestyle after retirement