So your rookie made the team, and he feels like he struck it rich. In a sense, he has but you’ll need to hamper his need to spend that check before it clears the bank. That’s an emotional task because “bling” can project an air of financial stability. Yeah, maybe but it’s more important for him to have a solid financial basis. So, he needs to skip the excessive bling for him and his entourage.
Yes, the athlete may have been friends with these people for years. And, yes, these people may even 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 first step he needs to make is to make sure he has a qualified financial advisor. They need to have the approval of the player’s particular player agency, but he also may want one outside of that . . . a check and balance. The player needs to have serious discussions of future plans and goals so a proper budget can be established. The financial advisor needs to understand the tax ramifications of his abode as well as where he actually plays. And like the agent, the financial advisor must be an ethical and moral good fit with the athlete.
Source: CNNMoney