After yet another exciting weekend in sports and a great Super Bowl (in spite of Jim Harbaugh) I’m once again ready to dive into a sensitive subject regarding sport and life. As promised we’re starting our new series: “Oil and Water: Professional Athletics vs. Finances.”
In case you guys aren’t aware, I have no degree in finance or money management and I’m far from a guru went it comes to investment management or stocks and bonds. What I can offer is a perspective from a former professional athlete who has real world experience.
Let’s move on…
Topping our list of ten things that may be part of the reason professional athletes struggle with finances is probably the most common sense of all: Experience.
Statistically, most professional athletes come from humble beginnings. How many times have we all seen a collegiate special highlighting a phenomenal athlete and heard the heart-warming story of how the athlete came from a broken home? Maybe a single-parent home where mom had to work multiple jobs to make ends meet? What about the athlete who’s one of four or five kids who had to play the role of parent to his younger siblings while mom worked nights to support their humble existence?
Does any of this sound familiar? Honestly, what would be so impressive about reporting on a kid who came from a dual parent home living in upper-middle class suburbia? That doesn’t really make for a good Saturday segment now does it?
With that it stands to reason that when our phenomenal athlete goes from nothing ( I personally remember scraping up $5.25 to buy a one topping large pizza from Papa Johns to share with my then roomie Aaron Taylor during our time at Notre Dame) to having no financial worries at all?
How about going from scraping together a few cents to do laundry to having a bank account with six or seven digits and top that off with a Nike, Under Armour or Adidas endorsement deal worth another ridiculous sum of money? What is the first thing you think will happen? Do you think they will contact Franklin Templeton Investments or Charles Schwab to see how they can diversify their portfolios?
|With large sums of money comes|
HUGE amounts of responsibility.
Of course not! Duh - Let’s go buy the most expensive car we can afford and spend another few thousand on a diamond crusted watch and a 36” diamond-studded chain that let’s everyone know we’ve made it… we are no longer bound by the chains of poverty and there’s no looking back! Let’s buy mom a huge house, a $100,000 car and set her up (cause that’s really what’s expected anyway) and make sure we take care of all of our siblings. Remember, we’ve never had money before so now that we have it the world is officially our oyster…. and where there’s oysters, there’s pearls.
Wait… where is the guidance? What about the financial planner who (for a nominal fee of course) takes the time to “show” this new, early twenty-something millionaire how to budget and protect his assets? How do they know what questions to ask? Further, what experience do they have in basic money matters and finance?
Let’s see…if I’ve never even held a gun before can I be expected to know the basics of firearm safety? If I’ve never gone fishing before can you expect me to know how to bait the hook? So how in the world can a kid in his early twenties who’s been struggling with money his entire life be suddenly expected to manage a multi-million dollar portfolio?
Sounds like a losing proposition to me…
Here are three ideas for professional athletes (especially rookies) to consider:
1. Take some time to invest in your future… you’ve invested in yourself physically to be the best athlete you can be… why not learn how to manage the monetary perks that come with it?
2. Surround yourself with a few people you know you can trust – not an entourage who are looking to scam some crumbs, but true mentors… they are truly priceless.
3. Try frugality. Just because you can afford it doesn’t mean you have to buy it.
Being able to play a sport as a professional is an incredible accomplishment. With that accomplishment comes tremendous responsibility… a responsibility that some athletes are ill-prepared to take on. As we all know sport has a sexy side and everyone wants a piece – unfortunately some people will take more than their fair share if given the opportunity…
Damn… does this mean pro athletes should sleep with one eye open??
Hmmmmm…. it might not hurt….