A famous Chinese proverb reads “the best time to plant a tree was 20 years ago; the second-best time is now”. Time is you ally in achieving any goal, so the earlier you start planning, the better. This is especially true for athletes, who, as previously discussed, have short term sports careers and must have a post-retirement plan in place in order to transition as smoothly as possible into their new lives.
Money Smart Athlete Blog
The aim of the Money Smart Athlete Blog is to provide athletes worldwide with the tools to become money smart and help them make savvy financial decisions. We created this blog to transmit and share the knowledge we have accumulated as financial and business advisors during the past two decades.
Over the past two years, we have all been tasked with navigating unchartered territories, due to the outbreak of the Covid-19 pandemic. A catastrophe of unparalleled proportion, which nevertheless, left us with a lot of lessons that should be considered, as we try to shift towards the post-Covid era. As stated in previous articles, professional athletes have been amongst the hardest hit by this pandemic, not necessarily in monetary terms, but in terms of seeing their status quo being challenged. Athletes have to rethink the way they approach their financial well-being and have to recalibrate their strategy towards financial freedom. In this article, we seek to explore how athletes should plan ahead, learning from the lessons of the Covid-19 era, to emerge financially stronger and more independent. Specifically, we will focus on why the pandemic has made the case for the need of multiple revenue streams, and how such streams can be pursued by professional athletes.
There is no doubt that the COVID-19 pandemic has had a profound negative impact on all the stakeholders of the sports industry, as the response of the majority of national and international decision-makers to the outbreak was the shutting down of sport competitions at all levels, including the Olympics. Professional and amateur athletes, sports organizations and sports-related companies and their employees, all had to face their own share of financial distress.
The novel coronavirus – Covid-19 – broke into our lives almost two years ago and altered every aspect of our reality. Offices moved online, sporting events lost their magic and human interaction changed fundamentally. We can only hope that we are briskly taking back control of our lives with the increasing rate of vaccination and the gradual washing away of the virus itself.
Sports was and is one of the hardest-hit industries by the pandemic, due to the fact that it relies on live action and interaction, momentum and the gathering of large crowds in stadia and other venues. The outbreak of the virus was like Armageddon for sports which saw most of its revenue streams temporarily blocked and stadia closed indefinitely, while clubs still had to pay the enormous salaries to their athletes. For athletes of individual sports, the situation was even grimmer. The Tokyo Olympics and the Euro championship were not spared either.
"Financial literacy" has become a very a popular term these days. It basically refers to having the right set of skills and knowledge that allows an individual to make informed and effective decisions with all of their personal financial resources. Specifically, it is about spending within your means, investing wisely and saving for emergencies. Although these “rules” sound simple, many people find it hard to adhere to them, especially athletes.
Last week we explored the concept of Risk Appetite and its three basic descriptive categories: risk-averse, risk-seeking and risk neutral. Understanding your Risk Appetite or Risk Tolerance is one of the major factors that you have to take into account when creating your investment plan. The second important factor relates to your income; these two concepts are closely intertwined.
When psychologists and sociologists study deviant behavior they tend to focus on socioeconomic backgrounds, conditioning and environmental and structural factors. Economists on the other hand, for right or wrong, have come up with a different perspective: risk-appetite. They argue that people commit crimes as rational beings weighing risk against gain. In the case of criminals, prison sentence against loot. The rational response to risk is not necessarily to avoid it at any cost but to take it into account in your decision making. Risk appetite refers to the amount of risk that an individual or organization is able and/or willing to accept in pursuit of certain objectives. There are three basic categories of risk appetite: risk-averse, risk-neutral and risk-seeking. Every single individual has their own risk appetite, including athletes.
Despite being well paid, many professional athletes are looking for alternative sources of income to grow their wealth. To this end, they often use their sports earnings to invest in various ventures and projects. Most investments are usually made after retirement; however, we have a number of cases where athletes begin investing way before they retire. The rationale behind athletes’ investments is the creation of alternative sources of revenue which can potentially lead to the creation and accumulation of wealth.
The significance of creating a financial plan that can eventually guide athletes to financial freedom, has been reiterated in a number of articles, here on the Money Smart Athlete Blog. Being able to choose wisely when, where and how to invest money, in order for them to grow, is a very critical component of a financial plan which can help athletes meet both their short and long-term goals they set.
Investing is one of the key ways that athletes can achieve the financial goals they have set in their financial and life plan. Through investing athletes can make their money work for them and take charge of their financial security by growing their wealth and by generating additional income streams to support their desired lifestyle.
Constantinos Massonos, Contributor Social justice is an essential building block for the development of a society. It represents the view that every person who is part of a society deserves equal rights, equal opportunities and equal treatment. Its importance was...
In the past couple of years or so, there has been a rise in debates regarding the conduct of athletes outside the field. One aspect of that debate is concerned with how charitable or engaged athletes are with their immediate and wider communities, their political beliefs and their willingness to take a stand for what is right – which is more often than not harder than most people would admit to determine. At the same time, the rise of social media has given athletes a platform to advertise themselves, broadcast their philanthropic side and speak out on what matters to them. It seems however, that athletes are increasingly targeted by the public not only when they say something that people disagree with, but also when they don’t say anything at all.
Sense of duty, respect for fellow human beings, morality, and discipline are what create a socially responsible person. Social responsibility concerns individuals when it is exercised by a single person, while it becomes collective when it pertains to groups of people such as companies or sports teams. The popularity that athletes enjoy due to their status as public figures gives them the opportunity to influence the behaviour of many of their fans through public announcements and various forms of promotional activities.
Many well-established athletes never thought they could have a wealthy future because of their socioeconomic backgrounds. The examples are numerous: Pele, LeBron James, Novak Djokovic, Christiano Ronaldo, and the list goes on. The sudden wealth experienced by a number of athletes has turned into a positive experience for their communities as well. These athletes have used their newfound wealth not only to support themselves and their families, but also have used part of this wealth to give back and help their communities.
Sports have become one of the most popular global activities, attracting the attention of millions of people. This growth is producing more and more powerful social icons that have considerable influence on society.
Athletes often put their bodies through rigorous training and expose themselves to many physical risks; at the same time though, they seem to neglect their mental health and stability. Mental illness is often overlooked by coaches, teachers, and parents of athletes as well. It is difficult for people to understand that the brain is just as important as the body when it comes to being a healthy athlete. This article will explore how mental health issues in athletes are just as important as physical injuries.
The ancients used to say ‘a healthy mind in a healthy body’ and I think many people can get behind that. The relationship between mental health and physical health intuitively seems obvious. For starters, during and immediately after exercise, the human brain releases endorphins, chemicals such as serotonin and dopamine that literally make us feel good. So, it would make sense that regular good exercise can help stay away from mood disorders and maintain a healthy mental state. But what about athletes?
On the MSA blog last week we discussed the recent events involving Naomi Osaka, her mental health and her decision to withdraw from the French Open. Mental health has long been overlooked in sports and in certain cases even repressed. Mental health issues and illnesses do not fit in the yes-can-do, celebratory and electrifying environment that characterizes sports. However, athletes are constantly under the spotlight, working hard week in and week out on the pitch, while trying to keep in touch with their fans and show their philanthropic face outside of it.