Being a young athlete, people may think all you should focus on is your performance on the field. That’s a common but dangerous mistake. At Money Smart Athlete, we believe financial planning and wealth management should always be on an athlete’s mind.
Most athletes have a career that lasts around 10 years. This depends on the sport and assumes no early retirement. This means you must plan your finances during your playing years to ensure a stable life for the next 30–40 years. Sounds tough? It doesn’t have to be — if you have a plan and take the right steps at the right time.
Establishing the Plan
Start early — even before you sign your first contract. Meet with a financial advisor and map out your retirement strategy. First, estimate how many years you’ll earn income from sports. With that number in mind, your advisor can help you create a retirement fund that includes savings and long-term investments.
This fund should support you long after you retire. There’s no set percentage of your income that should go into savings or investments — every athlete’s situation is unique. What matters is tailoring a plan that fits your earnings, lifestyle, and long-term goals.
Executing the Plan
Once the plan is in place, stick to it. At your peak, it’s easy to think money will always flow in. But it won’t. Athletes often make more than the average worker, but in a shorter window. That means it’s up to you to make the money last.
Spending carelessly during your career is like stealing from your future self. Every dollar not planned for the future increases your risk of financial hardship later.
Plan B and Involuntary Retirement
Sometimes careers end earlier than expected — due to injury or other factors. That’s why a backup plan is essential. Create a “Plan B Fund” to cover the cost of going back to school or starting a business. This gives you options if your athletic career ends suddenly.
Having an exit strategy means you won’t start from zero. While not ideal, it’s a smart and realistic safeguard.
Your life as an athlete is unique. So is your wealth-building window. The way you manage your money now will shape your future. The earlier you plan, the better off you’ll be after sports.
For a discussion of the process of wealth structuring and how it can affect your post sports financial lives you may contact us at [email protected].