Protecting Your Wealth During Your Athletic Career

Insights

As a pro athlete, you live out every kid’s dream: performing under the bright lights and amidst the roar of a raucous crowd. Your first taste of this life—and the hefty salaries it brings—is exhilarating.

When it comes to wealth building, however, most jobs offer a 40- to 50-year stretch to earn enough for retirement. Athletes, on the other hand, receive only brief windows to sock away the bulk of their life’s earnings. They also face a bevy of challenges, such as “lifestyle creep.”

Ensure you fully reap the rewards of your dedication. Take proper steps to guard your wealth, and build a championship-level advisory team.

Sports vs “Normal” Career Timelines

As you put pen to paper on your first seven-figure contract, you feel on top of the world. Finally, you can afford all the luxuries you’ve dreamed of—and you can help out family and friends. 

With big-time money coming in, it’s easy to assume the gravy train will roll forever. But it’s important to keep in mind that major pro sports have shorter career lengths than you’d expect:

• MLB – 3 years (2.7 years for pitchers)
• NFL – 3 years (kickers last longest, while running backs average 2.57 years)
• NBA – 4.8 years

While some superstars dominate their leagues for decades, these lengthy careers represent extreme outliers.

Given these brief windows of opportunity, even lofty salaries can’t cover a lifetime of financial needs. That’s why pro athletes go bankrupt at rates much higher than the general population. Other lucrative careers, such as law or business, feature lower annual compensation but offer enormous earning windows and no shortage of work. 

Steps to Take

If you’re in the early stages of your pro sports career, do “future you” a favor. Take action to guard your earnings and protect your family’s future. 

#1 Invest in Financial Literacy

While words like “taxes” and “compound interest” might ring hollow compared to “championship” and “all-star,” they carry huge importance. 

You don’t need to become an accountant, but set aside time to educate yourself on the fundamentals of finance (such as how interest works):

• Major player’s associations sometimes offer financial literacy courses 
• Successful retired athletes can also provide sound advice

As a newly wealthy athlete, you’ll inevitably attract unscrupulous “financial advisors” and “business managers” who promise home-run returns. These individuals rarely have your best interest at heart. Financial literacy helps you spot scams ahead of time and invest wisely.

#2 Avoid “Lifestyle Creep”

People expect big-time athletes to live in glitz and glamour. With piles of dough in the bank, it’s tempting to shell out for a stunning Malibu pad, glittering McLaren cars, and music-video-worthy nights at the club.

While you should certainly celebrate your payday, spending on such luxuries (especially early in your career) can rapidly deplete your resources. 

Most luxury goods don’t appreciate, and while you may have no trouble making payments at your current salary, can you handle the bank drafts once your contract expires?

It pays to learn from the mistakes of other retired athletes, such as former QB Vince Young, who declared bankruptcy despite earning over $35 million during his playing career. The root cause: reckless spending.

#3 Assemble a Quality Team

In the aftermath of his bankruptcy, Vince Young counseled up-and-coming players to focus on:

• Laying their financial foundation early
• Building a team of trustworthy advisors

The sooner you can establish a foundation, the sooner you can focus on the field and begin helping your loved ones. 

A strong wealth management team should include experienced, well-regarded:

• Lawyers – Ideally attorneys with sports experience
• Accountants –Especially those adept in complex tax compliance
• Financial Advisors – Pros who can navigate investment opportunities

As an athlete, you know firsthand the difference dedicated, talented teammates make. Ditto for your financial team. 

#4 Prepare for the Postgame

It may not seem like it now, but someday, you’ll hang up the cleats and start your second act. And, unfortunately, many athletes don’t get to choose when that happens, often due to injuries. How this transition goes depends on the groundwork you lay during your prime. 

Many athletes (understandably) get caught up in the glamour and never consider what life will look like after sports. To prevent letdowns (and financial struggles), take some time to envision what your ideal post-sports life looks like. Take action steps like:

• Establishing passive income streams through secure investments
• Paying down debt to allow for lower income in the future
• Keeping an eye out for later career paths, such as broadcasting or scouting
• Enlisting the help of financial planners to optimize your finances for the long haul

Knowing that you have a stable, prosperous future ahead will only help you redouble your focus on training and triumph in the present.

A Champion Today, and Tomoro

As a professional athlete, you enjoy an utterly unique career path. One drenched in glamour and glory, while also riddled with potential pitfalls. But given your hefty salary potential, smart financial management can leave you set for life—even with an average career span.

At Tomoro, we offer peerless financial management tailored to your unique situation. Our veteran team will take the time to fully grasp your needs and goals. We’ll craft an innovative plan to transform your on-field earnings into generational wealth.

Ready to feel as confident in your future as in your game? Let’s talk.