Focus on your money as well as on your sport
"…by the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress; within five years of retirement, an estimated 60 percent of former NBA players are broke."
By Jayne Di Vincenzo AIF ®, CEP ®
President and CEO of Lions Bridge Financial Advisors
Editor’s Note: This is the first of many articles Lions Bridge Financial Advisors will publish to help professional athletes and aspiring professional athletes make informed decisions with their money. But these articles will include common-sense tips that apply to everyone, so we hope they are read by athletes and non-athletes alike.
The Sports Illustrated quote reminds us that we seem to read a lot about athletes who blew millions of dollars in a few years and ended up living modestly or, worse, in poverty.
Thankfully, that’s not always the case. Many athletes are smart with their money, and we’ll focus on a few – from the National Football League, Major League Baseball and the National Basketball Association -- who are so we can learn from their financial successes.
Without further ado, some tips:
Enjoy your money, but also look for opportunities to save.
Marshawn Lynch, who has reportedly made more than $50 million, not including endorsement deals, is known as a bruising NFL running back who doesn’t talk with reporters. He is also known for being smart with money, studying investments and spending more time looking for ways to save money than to spend it. Lynch even sometimes helps his teammates pick investments for their 401(k) plans.
Live below your means.
Many professional athletes buy mansions, six-figure cars and other things they can afford but don’t need. No one in all of professional sports is known to spurn those things more than Kawhi Leonard, the all-star forward for the San Antonio Spurs. Leonard, who in 2015 signed a five-year, $90-million contract, drives a 1997 Chevy Tahoe that was collecting dust in his grandmother’s garage. Asked why, he said, “It’s paid off, and it runs.”
Avoid investment “opportunities” that seem too good to be true.
Mark Teixeira, who retired in 2016 after his eight-year $180-million contract with the New York Yankees expired, has counseled teammates to avoid get rich quick investments and stick with more conservative investments. Like so many professional athletes, he has seen teammates lose vast sums of money very quickly.
Hire someone you can trust to manage your money.
Again, Teixeira says nothing is more important than finding an honest and competent professional to help you invest your money. That can be easier said than done, of course, so he advises athletes to spend a lot of time making sure that the advisors they hire work for reputable firms and show a long track record of honesty and success.
When you look back over these tips, we hope you’ll recognize that they are just common sense, but they are very important to follow if you want to strive to be financially successful as well as athletically successful.
Jayne Di Vincenzo has been serving clients for nearly 20 years and is licensed in 25 states. She holds her securities registrations for the Series 7, 53, 24, 65/63, 31 Life, Health and Long Term Care licenses with LPL Financial. She also holds the AIF ® and CEP ® designations.
Securities offered through LPL Financial Financial, a Registered Investment Advisor, Member FINRA SIPC.