Financial Advice for Athletes
- 78% of NFL players and 60% of NBA players go broke a couple of years after retiring from their respective league due to poor financial habits.
- Regardless of how much money one makes, if proper money management tactics are not used, it could result in financial hardship.
- It is important to use money wisely to multiply wealth and live a comfortable life.
Many veteran athletes have achieved great financial success. Los Angeles Lakers basketball player and entrepreneur Lebron James is the epitome of how athletes can maximize every deal from their playing career to the business room. However, younger pro-athletes tend to mismanage money or listen to the wrong people regarding their finances, resulting in them making terrible decisions regarding how they handle their money.
For example, statistics show that 78% of retired National Football League (NFL) players go broke within two years of retiring, and 60% of former National Basketball Association (NBA) players go broke five years after retiring. Although professional athletes can make millions of dollars during their playing career, several players have been known to end up experiencing financial hardships once their career is over.
Athletes need to set up both short and long-term financial goals to help them maximize their money. The current and former athletes who are financially successful decided to be involved with their money and become financially literate to maximize their investments. Here are some of the top players across the NBA and NFL who made the most of their career earnings.
According to CNBC, NBA Hall of Fame inductee Shaquille O’Neal spent $1 million buying cars and jewelry in one day. Fortunately, his bank manager pulled him aside to show him his bank statements. Together, they went through his bank statement line by line to discuss his spending habits. As a result, O’Neal quickly understood that he had to become financially responsible.
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When O’Neal signed to the Los Angeles Lakers in 1996, he conversed with former Los Angeles Lakers player Magic Johnson, who told him about the importance of ownership. O’Neal eventually invested in stocks, real estate, franchises, and the list goes on. When he decided to maximize his money, he saw an exponential increase in his net worth, amounting to more than $400 million.
Seattle Seahawks running back Marshawn Lynch is viewed as one of the most entertaining football players, both on and off the field. His hilariously fun and authentic personality has landed endorsement deals from Skittles, Activision, Nike, Pepsi, and Progressive.
Due to his long list of endorsements from large corporations, he has lived off his off-the-field income, accumulating more than $5 million per year from his endorsements alone. In addition, his high endorsement earnings led him to save nearly all of his income from his NFL contracts, which amounts to more than $49 million. Though his investments are unknown to the public, his NFL income is more than enough to let him enjoy his life for the rest of his living days.
Additionally, Lynch is famous for his one-liner statement during the NFL’s media day, where the NFL obligated him to appear. To avoid the hefty $500,000 fine by not showing up, Lynch made himself available for a total of 4 minutes and 51 seconds and answered each reporter’s questions by stating, “I’m here so I won’t get fined.” That’s the true definition of “save that money.”
Rob Gronkowski is another entertainer and future Hall of Famer from the NFL who has been careful with his money. However, his explosive personality led to him becoming a fan favorite, which helped him land endorsements from large brands, such as Monster Energy and Dunkin’ Donuts.
His financial tactics are like Marshawn Lynch, as he’s also living off his annual endorsements, which were speculated to be around $3.5 million in 2015. Though he is considering retiring from the NFL, he wishes to pursue a career in the WWE, which will allow him to increase his net worth even more.
Saquon Barkley is an up-and-coming running back for the New York Giants, who signed a rookie contract worth $31.2 million. After winning the Offensive Rookie of the Year in 2018, he partnered with Pepsi, Toyota, Nike, and other large companies.
With these endorsements from large corporations, his annual endorsement salary is believed to be around $10 million. However, in Week 2 of the 2020 NFL season, he tore his ACL, realizing his playing time is not guaranteed.
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As a result, he converted his future marketing endeavors into an upcoming generally accepted medium of exchange, Bitcoin. Of course, this financial strategy requires a high-risk tolerance as the price of Bitcoin fluctuates continuously. However, it allows Saquon to invest in his future and create generational wealth.
Additionally, Saquon has decided to invest in X2, which provides athletes and others with healthy workout supplements. Saquon, alongside Kawhi Leonard and Lavonte David, has become early investors in this company which they can reap the financial benefits later if the company becomes successful.
Becoming financially savvy is one of the biggest keys to financial security and stability. As athletes make millions per year in fixed income, investing in index funds, mutual funds, real estate, stocks, and bonds can prove to be the best way to build wealth.
Therefore, players who decide to become financially literate and maximize their money through budgeting and investing can be financially successful after their playing days are over.
What other athletes do you know that are becoming financially savvy? Let us know in the comments below.