Pro Athlete Career Lessons - #3 Financial Planning
Posted on November 29, 2016 by Fatimah Gilliam
This is the third article in a three-part series providing career advice to professional athletes - encouraging success both on and off the field. However, these tips are also helpful for people working in Corporate America. The advice in this series promotes strong leadership skills, collaborative teamwork, strategic career planning, and career and financial longevity. Click here to read our second article on career planning.
As a professional athlete with a steady income, it can be difficult to see a time where belts need to be tightened. However, based on recent statistics, professional athletes are frequently hitting hard times post-retirement. We discussed this unfortunate financial reality in our article "Super Bowl to Sofa Surfing - Are Pro Athletes Going Broke?"
A 2009 Sports Illustrated article claimed that 78% of NFL players
went bankrupt or were under "financial stress" within two years of retirement. While this number seems extreme, it should be a carefully-heeded warning. The key takeaway is to be proactive! Athletes - take control of your financial future. It cannot wait any longer.
Meet with a Certified Financial Advisor or Planner
This is an important first step in securing your financial future. Financial advisors and planners can help you invest your money, plan for retirement, and make insurance decisions. It is always a good idea to have an expert on hand with whom you can consult. Make sure your advisor or planner is certified, and affiliated with a well-known and reputable financial services firm.
Financial Literacy - Know Your Money & Write Your Own Checks
Regardless of whether you have someone helping you manage your financial future, it is important to increase your own financial literacy and make informed decisions yourself. Never fully turn over your financial future without being proactively involved in the decision-making.
You should know how much money you have, where your funds are located, whether your taxes were being paid properly, and write your own checks. When you do not understand something, ask questions, demand answers, and educate yourself about finances and accounting. If you want to have money for your future, you have to be proactive today. Maintain critical control over your financial destiny so you cannot be taken for a ride and fleeced.
Look into Disability Insurance & Insuring Your Body
When your body is your career, it is important to treat it like you would any asset. Insuring your body and protecting yourself in the event of an injury is crucial for your peace of mind and your family's financial security.
Plan for the Unexpected
Sports careers can be particularly volatile and short-lived. While many athletes go on to lead successful careers in the sports industry following retirement, that retirement can come sooner than expected due to things like injury, contract disputes, tarnished brands, personal and family issues, and other extenuating circumstances. The Broadway musical, A Chorus Line, poses the famous question: "If today were the day you had to stop dancing, how would you feel?" Plan for that day, but hope that you do not need to fulfill that plan before you are ready.
Avoid the Need to "Keep Up with the Joneses"
Be a leader in financial responsibility, and spend within your means. Make an active effort to become financially literate, and meet with an advisor to plan for your financial future and develop a realistic household budget. While it might look cool to have a flashy car today and lots of bling, it will not be cute if your poor choices have you living in that car tomorrow after the IRS has seized your home.
Drop Dead Weight
It is true that it takes a village to get ahead. There might be an army of people that have supported your success - from parents, extended family, and teachers to childhood friends and new "friends." However, you cannot buy all of them a house. How can you survive until you are 80 years old if everyone has their hand out?
Limit who you can afford to support and make sure anything you do for others still fits within your monthly budget. Also, evaluate if the people in your circle are truly your friend. If not, cut them loose before they suck your bank account dry. Trust me, they will not stick around when you have nothing. So why keep them around when you do?
Consider All Your Options
If you are injured and are offered a settlement, read everything thoroughly and do not jump to any decisions without consulting both legal counsel and family. While an injury settlement may seem beneficial for the short term and could provide needed cash, it could have repercussions on both the future of your career and even your medical care. This is not a decision you should make lightly before signing on the dotted line.
Know Your Contract Front & Back
Before you sign anything, it is important that you have a full understanding of what the contract entails. Consult with your agent, but read the entire contract front and back. Raise any concerns you might have. Just as you should not relinquish all the thinking to your financial advisor or planner, you should be equally informed and engaged in decisions made with your agent.
Your agent should be there to answer your questions and guide you in making an informed decision. If your agent does not want to take the time to explain things, cannot answer key questions, or says you should just "trust them" - run! This is a glaring sign that your agent is less legit than other agents and may not have your best interests at heart. There are plenty of decent agents out there - ones that will make sure you understand what is on the table and what the risks are in the deal. The contract negotiation is critical to your future - it is your opportunity to advocate for yourself and your needs. Once you sign the contract, it is final. So know to what you are agreeing!
Taking charge of your financial future is one of the most important things you can do. Advisors like those at The Azara Group
help you make the most of your career - helping you leverage opportunities for strategic career planning while you are on the field and guiding your transition to the post-game world.
For leadership strategy advice, check out the first article
in this series. For career planning advice, check out the second article
in this series.
The Azara Group (TAG) is a consulting firm that promotes the development of leaders in an increasingly competitive and diverse marketplace - providing strategy consulting services and leadership training services to advance professional and life success. TAG leverages expertise in career strategy, diversity, negotiation skills, and business acumen to provide strategic advice and consulting services to help people and organizations get what they want, achieve their goals, and advance their business and career objectives. TAG also helps companies better attract, retain, and promote diverse talent, and develop robust diversity platforms and strategies to create a more inclusive workplace.
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