By Athena Constantinou, APC Sports Consulting Ltd
To gain professional status and be able to play sports for a living, young athletes and the people who surround them make lots of personal sacrifices for many years. Going professional is every athlete’s dream and it oftentimes comes with fame and money. The effort athletes put to prepare themselves physically and mentally to perform at top level in their sport is unparalleled. On the contrary, the effort they put to prepare themselves for dealing with all the emotions associated with the changes in their financial lives when they finally turn professional, is minimal.
Sudden money or sudden wealth is a phenomenon connected to individuals who suddenly come into large sums of money. The phenomenon is magnified when these amounts are six, seven, eight digits or more. Scientists have even created the term “Sudden Wealth Syndrome” in order to describe the adjustment problems faced by individuals who suddenly come into large sums of money.
Sudden wealth can be a great opportunity for athletes to create a better life for them and their family and peers, if they manage their money the right way. If the athletes are not ready or don’t take the right measures, they might end up worse off than before signing their first professional contract.
So how can the sudden wealth phenomenon affect an athlete? Many become overwhelmed and start to overspend. Usually, athletes who tend to spend too much money on themselves will often spend money on others too. Pressure for money from family and people who helped athletes reach the top can weigh heavily on them.
Being overwhelmed is the simplest of the psychological effects that an athlete who suddenly comes into money might face. There are a multitude of symptoms that come with the sudden wealth syndrome and they include:
- Increased levels of anxiety or panic attacks that can lead to obsessive thinking and might affect the athlete’s daily life and on-field performance.
- Sleep disorders, such as insomnia or early morning awakening and irritable mood.
- Feeling guilty about having money or being overly self-confident, which may lead to acting on impulse, over-purchasing things, or doing things that undermine sound money management.
- Getting stuck in feelings of confusion and uncertainty as to who they are and what is important to them which can lead to denial of real choices and being passive in managing money.
- Excessive concerns about being exploited or hurt by others.
- Feeling depressed, empty and gloomy, not enjoying ordinary pleasurable activities.
Sudden wealth is not a problem of professional athletes only. The challenge is the same for anyone; turning sudden wealth to lasting wealth. Money loss caused by mishandling sudden wealth can be prevented or minimized. All life changes, including sudden shifts in finances can be traumatic; athletes should take things slowly and not rush into any life-altering decisions; they should take time to adjust to the changes and think clearly so that they make the right decisions which will serve them well in the long run.
To make the right decisions in cases of sudden wealth, athletes need to surround themselves with trusted financial professionals who can teach them how money can create options and facilitate their dreams by creating a financial life plan and a budget based on their core values and lifestyle. This process helps them set their priorities and makes the adaptation to their newfound wealth easier. The ultimate goal of such a process is to create an identity shift into a person who accepts having money as a resource and utilizing this resource as best as possible!