Okay, rookie, you made the team. You may feel like you struck it rich. In a sense, you have but you need to tamper the need to spend so forget the bling. Does bling project an air of financial stability? Yeah, maybe but it’s more important to have a solid financial basis. So, skip the excessive bling for you and your entourage.
Yes, one may have been friends with these people for years. Or, yes, they may be family. But success can bring out the worse in some people, and I’m not referring to the athlete in this case. There are hundreds of stories about athletes going broke not just because they spent their money to impress themselves and those around them. Athletes go broke because they trust the wrong people to handle their money. Individuals once part of an athlete’s inner circle become hanger-ons, groupies, and the like. Agents and financial advisors entice athletes with poor investment choices.
Parents are supposed to be the people in this world to protect you from outside evils and not prey on their children. The same is true for one’s doctors, preachers, teachers, coaches, siblings and friends. Yet, for the athlete learning who to trust, trusting can become a very difficult thing.
An athlete has to be very careful about his financial plans. The money he makes within his short playing career has to last him for the rest of his life unless he is smart enough to transition into a second career. It does not matter what league one plays in–NHL, NFL, MLB, MLS, NBA–one’s finances need to last to cover household expenses, trips, health care, college tuition and so forth.
The best strategy an athlete can have is to start transitioning into his second career before he retires or is forced out of the game. I was advised that it is best to have multiple streams of income at all times. Even athlete can accomplish that with a hectic schedule with the right team, aka inner circle.
It is just as important to make sure those in your inner circle are worthy to be there. Ask the hard questions: (a) does that person give as much as they take?; (b) how does that person handle their own money?; (c) is that person growing or stagnant?; (d) does he follow through on what he says?; and so forth. If there are more negative answers than positive ones, it may mean removing that person from your inner circle.
Always double check your finances. Keep your own financial records, and get an independent second opinion at least once a year. There is no shame in asking for help, so if budgeting isn’t your thing ask a financial counselor which is different than a financial planner. Learn about stocks, mutual bonds, mutual funds, CDs, and so forth for yourself. It is hard to trip someone up if he has the knowledge for himself.
Plan for your retirement and life after sports. Remember, knowledge is a power that no one can take away from you. Knowledge can help prevent you from going broke. And if you just have to have some bling to reward yourself from all the hard work it took to make into the League, then limit yourself to just 10 percent of your first contract and save the rest. Better yet, make sure that bling will appreciate over time instead of depreciate.
Learning a ton from these neat artleics.