Top 3 Tips Wealth Management Tips for Athletes to Protect their Financial Welfare
It’s no secret that many athletes and entertainers struggle financially, even if they had a successful career which earned them millions of dollars. Sports Illustrated said that 78% of the National Football League (NFL) players are either bankrupt or suffering from financial stress, within two years of retirement. This is an alarming statistic, and it shows that the financial welfare of athletes is an overlooked issue. Athletes dedicate a lot of their time to fitness and not enough to their finances. They need to incorporate a long-term financial game plan to protect themselves from becoming destitute, after all that hard work. Here are some wealth management tips for athletes to help them secure a better future.
Create a Team of Trustworthy Financial Experts and Advisors
Like building a sports team, athletes need to build a strong financial team and commit to working closely with them. Members of this team are Financial Advisors, Accountants, and Insurance and Business Attorneys. They need to listen to trustworthy advisors who can coach them on how to be responsible with money and save for the future.
Athletes are compensated very well and can be taken advantage of easily. It’s important to stay away from financial advisors who propose high-risk investments.
Force Yourself to Stick to a Budget
The classic “Rags to riches” story. Many athletes that have sudden wealth enjoy splurging on homes, luxury cars, exotic vacations, and partying. But they don’t plan a proper budget to control their expenditure. They simply deposit a paycheck in the bank and spend lavishly until their account is drained. Budgeting carefully with the help of an advisor will make them more aware of how much they’re spending. This will prevent them from overspending on unnecessary luxuries, so they can accumulate enough savings for retirement.
Always Prepare for the Long Term
Even though athletes are very young and fit, they should still have a plan for their retirement. Due to a lot of strength and speed during games, they risk suffering from an injury that could end their career in an instant. Therefore, it’s important for them to have plenty of savings to fall back on because there is no such thing as job security.
Instead of saving for their future, many athletes and entertainers achieve celebrity status and stop thinking about the long-term. They forget that someday they might not be employable anymore and risk becoming destitute.
Many people swarm towards high profile individuals and always tell them what they want to hear, instead of the truth. Honest advisors are the ones who will firmly tell them if they’re spending too much. This will help athletes become more aware of their expenses, especially before they write a cheque for a second private yacht.