What Is the Best Financial Planning for Professional Athletes?
Financial planning is a must for professional athletes, who are famous for burning through their six-, seven- and even eight-figure salaries. Many pro athletes earn in a single year or a few years what the average worker may not see in a lifetime, but this can give a false sense of security. Pro athletes make the same mistakes that others often do—helping struggling friends and family members; buying too many toys, clothes, and restaurant meals; purchasing more house (or more houses) than they need; and not saving for the future. Some also fall behind on their taxes, divorce, and end up with expensive alimony and child-support obligations. A compounding factor is that athletes tend to be young when they suddenly find themselves with plenty of money.
Special Considerations for Athletes
Professional athletes face some of the same financial challenges that the average person faces, for example, not saving and investing properly for retirement, being tempted to overspend, and wanting to help struggling friends and family. They also face the unique challenge of receiving a large percentage of their lifetime earnings over a short time frame, which requires special tax planning and wealth management strategies.
Understanding what the potential pitfalls are and knowing how to hire a trustworthy advisor can go a long way toward helping pro athletes turn a huge but short-term paycheck into a lifetime of financial stability.