We read the headlines all of the time. Another athlete bites the financial dust. It seems that the get rich quick and get broke quicker athlete has been the norm. Sad! But is it really?
The truth is that many of us have never and will never just “stumble” upon hundreds of thousands of dollars at once, and especially in our young adult lives. So aside from that (ridiculously large detail) are professional athletes different than anyone else?
Everyone can use a little help at being better with their money. Some are taught the skills and others need to learn them. While the media loves documenting stories on athletes that have lost their fortunes, the reality is that there is a large group of athletes that manage their money much better than we think. Perhaps because they were forced to learn, or because they can feel the pressure and responsibility of making the money earned in their playing careers last their entire lives – you’d have to ask them.
What I can say is that professional athletes are no different than you. From my experience with them, there are six distinct qualities that keep them ahead of the game and make the responsible athlete superior money managers:
- They live below their means: As new things and technology hit the market, the allure of buying things we do not need grows for us all. Imagine that same temptation, but with the ability to buy everything that you don’t need. I’d imagine that deciphering your needs versus the wants would be tough – not for the responsible athlete. These men and women are experts at saying no to products that add no value to their lives or their pocketbooks. By aligning your goals with your wallets, you’ll be able to decipher what’s worth the buy and what isn’t. If not, you’ll have a blast but nothing to show for it during the times that you need your money to show up for you.
- They study the game: Athletes understand that knowing their opponent is the key to more victories. In the athletic space, that means watching film on your opponent, strategizing for their tendencies and repeating a structured regiment. When it comes to personal finance the same method applies, except that you are your opponent. To notch more financial victories, first, you need to study your tendencies: how you view money, how you spend it, save it and invest it. When that is done, find the resources such as books, blogs and even classes to help you strengthen your skill set so that you can be your best every day.
- They have ridiculously clear goals: Saving just to save is better than not saving at all. But, saving and investing for a defined goal is the best type of action that any individual can display when it comes to their personal finances. In general, athletes are used to setting goals. Why? Because they want to win! If you attach a goal to whatever actions are needed for it to come to fruition, the likelihood of you carrying out said actions increase. Thus, making your goals much more attainable. Goal set to win!
- They get help: Time is your biggest asset and one you cannot get back when used or wasted. Professional athletes are busy and because of this, they can’t tackle managing their money alone. You, believe it or not, are just as busy with family, work, and your social life. Employing a financial professional to help you invest, protect and reach your goals can save you time, money and stress on the way to your clearly outlined destination.
- They read the fine print: The financial deaths of most athletes occur when they do not understand the details of their personal situation. This starts with their spending habits but is closely followed by their inability to clearly understand the details of their contracts, fees associated with working with an advisor or agent and tax implications of their income levels. Like them, you should ask the difficult and uncomfortable questions to the parties that you are entrusting to manage your money, all while understanding that there is a cost for service. The trick here is to not get caught off guard with hidden fees and expenses.
- They are optimistic but realistic: For most athletes, their professional careers are short and sweet. The money will be made and then it will be time to find a new endeavor. This requires an optimistic, but a realistic expectation for what can be done in the time that they will be employed in their respective roles. They, just like you, have to have realistic expectations outlined within their financial plans with time horizons that match their goals. By doing this, you’ll never let the market cycle dictate your emotions because you’ve set the expectation from the start. Athletes understand that whether it’s on first down or a touchdown, your emotions are the most important thing to manage. Do this and you’ll always end up victorious.
You do not have to be a professional athlete or a multi-millionaire to be a stellar money manager. Take what you have and go now. You’ll thank yourself for it later, I promise.