Financial planning and education are important for everyone and not specific to professional athletes, but there are certain specificities of a professional sports career that make it important to have some basic knowledge of finance.
Have a look at these examples:
The average individual…
- Will work 35 to 45 years.
- Will enjoy peak earnings during the five years just prior to retirement.
The average professional athlete…
- Will work for 35 or 45 years; however, his or her career in professional sports will only last 7 to 12 years and will be over before reaching age 40.
- Will enjoy peak earning before age 35. In fact, they will likely earn 50% to 75% of their lifetime earnings before age 35.
Furthermore, professional athletes…
- Have short career spans and so cash flow needs to last longer
- Have early peak earnings
- Have careers that will often involve playing in different countries which creates financial issues such as moving large sums of money across borders, living and working in different countries adhering to different tax regulations, etc., all of which if not handled properly can result in severe financial loss
- Have a lot of people that surround them, all of which are not necessarily qualified to deal with finances
- Have a public image and can fall prey to targeted scams
- Have unpredictable careers and often a lack of educational qualifications
- Have little experience or background in money management
Financial planning is therefore important for any professional athlete – whether you are a rookie or veteran, having the knowledge to secure your financial future can make the differences between a great career and a bad one.
If you have any other questions that are not covered here, we encourage you to speak to your local bank to see where you can get more information. By being aware and educated you are in the best position to protect yourself and be a winner on and off the court!