The majority of the world is convinced that becoming an athlete is an easy way to achieve lifelong wealth. Indeed, it is a lucrative career, and many professional athletes earn more during one event than most workers do during a year. However, it does not mean that they are not vulnerable to financial dilemmas.
In most cases, the initial high earnings lull the athletes into a false sense of security. At some point, they lose their fortune to lavish living, taxes, and predatory friends and family members. What is more, their career might always end abruptly with an ill-timed injury, leaving them without a stable source of income.
To secure their future, athletes need to be responsible with their finances from the start of their careers. They could begin by insuring themselves and hiring a financial advisor, as well as saving for retirement and diversifying their assets. If you are a professional athlete interested in learning more, here are a few tips that will help you stay financially stable!
Having an Insurance Policy
Athletes are likely to sustain serious injuries, especially if they participate in rough sports like football or boxing. If you end up sustaining such an injury, you might find yourself struggling financially and unable to pay for medical care. To prevent such a situation from occurring, it is recommended that you buy a solid insurance policy.
The policy should include extended health insurance coverage, disability insurance, and life insurance. In addition to covering hospitalization, long-term care, and rehabilitation expenses, it should also cover the wages that you missed out on during recovery.
Before choosing one policy, it is crucial that you shop around and check sports life insurance quotes from a wide range of different insurance providers. That way, you will find it easier to get one that best suits your needs.
Hiring a Financial Advisor
After signing a big contract, athletes often spend their money on expensive cars and houses. They also give large sums of money to friends and family. While it might not be a problem at the beginning, it can lead to financial problems later down the road.
So, in order to stay financially stable, you might want to hire a financial advisor. Such a person will help you invest your money, determine the right amount of insurance coverage, and make other decisions that will help you accumulate wealth.
Saving for Retirement
With huge salaries, athletes might feel tempted to spend all their income on current expenses and avoid saving anything for the future. Obviously, it is a wrong approach, as people who do not save enough for retirement are likely to end up living on welfare and social security benefits.
Instead of spending all your income on current expenses, you should start saving for retirement as early as possible. For example, you could contribute to a savings account with an interest rate or start building an investment portfolio.
Investing their earnings allows athletes to create multiple passive sources of income. The majority of athletes invest their savings in real estate because it provides stable returns and has plenty of room for growth.
However, keep in mind that putting your money into just one asset is not safe. Instead, you should spread your money across different asset classes, such as stocks, bonds, and real estate. Stocks offer quick access to cash, can be sold easily, and produce returns over the long term, while bonds provide regular monthly income and are less risky in comparison to stocks.
Paying Down Debt
It is not unusual to see elite athletes get into debt. In general, it is a result of living a lavish lifestyle, which requires spending large amounts of money on luxurious cars, tropical vacations, and designer clothing. While it might be possible to live that way from some time, it can all come to an abrupt end when an athlete suffers a serious injury.
As a result, many professional athletes end up with a pile of debt when their careers are over. To avoid ending up in such a situation, you should pay off your loans as quickly as possible. For example, when investing in real estate, you might consider opting for a short-term mortgage. The sooner you pay it off, the more money you will save on interest charges.
Managing Personal Relationships
After achieving success, many athletes feel the responsibility to repay the people who have contributed to their success. Unfortunately, if they are not careful with the help they are offering, it might have a huge negative impact on their financial stability.
For that reason, it is crucial that you establish clear financial boundaries with friends and family so that there are no misunderstandings nor bad blood between you. In addition to that, be quick to cut ties with hanger-ons and people looking to take advantage of you.
Becoming a pro athlete might seem like a dream job that is guaranteed to provide you with a comfortable future. While it may seem like the perfect way to financial freedom, many athletes end up running out of their hard-earned money.
To avoid this, you must work with a financial advisor, save for retirement, and diversify your assets. You should also establish financial boundaries with friends and family to avoid misunderstandings.
To sum up, you have spent years honing your craft and competing with other elite athletes in order to achieve fame and fortune. You have worked towards this goal your entire life. Now that you are here, it is important that you do not let it go to waste and do your best to ensure that your future is secure.