GSM Live Insights: Broke, Bust, Bankrupt: Avoiding Financial Loss in the Post-Sport Journey
Rising to the top of your game comes with perks: money, access, and opportunities galore. For a lot of athletes, the amount of wealth given in contracts can be great, but also overwhelming, and may even lead to financial despair when the well dries up, sometimes unexpectedly.
Going big in sports is rewarded, often required, as athletes are conditioned to “leave it all on the field,” but in the real world, it’s moderation that can lead to sustained wins. How can we prepare athletes (and ourselves) for the next phase in life after the game lights go off? And now with the advent of name, image and likeness rulings across the U.S., what are the pitfalls to avoid?
“There’s this perception of what they have to be. It becomes innate in their mind that you have to go buy the chain, the car, and the house and that’s because of what they see.”
Jacques McClendon, the Director of Football Affairs at the LA Rams, explains how social media influences athletes to make unconscious bias-based decisions. Our society tends to profess the mantra “if you have money, you should spend the money,” and athletes can fall victim to this mentality. Reflecting on his own first purchase he made as a young professional athlete, McClendon remembers buying a new car, which was the first time he had made a big purchase like this in his life. These first purchases are big moments, and McClendon notes that there needs to be more support for athletes so they aren’t taken advantage of because they lack the experience.
“Your wealth is not your identity.”
Mori Taheripour, a globally recognized executive and award-winning educator, makes it clear that your wealth shouldn’t define you. In order to create a healthy relationship with money, you need to do two things: 1. Create boundaries with where you’re putting your money, and 2. Get yourself a financial advisor, which is almost like having a therapist. Thinking longterm about what athletes want to achieve after their playing careers end will enable more responsible saving and spending towards that ideal and realistic retirement in the future.
“If you’re going to make a lot of money in the young years, you ought to be aiming to put away thirty to fifty percent because then, in the long run, you’re going to have the cushion to choose to do whatever you want.”
Shelley Miles, CEO at Singleton Foundation, a non-profit that provides financial literacy and entrepreneurial programming, explains the importance of having a financial plan and saving more of your money now for a bigger return in the future. Young athletes earning a higher wage should aim to save up to half of income, if possible, and also think about a rainy-day fund now, as it’s not guaranteed that playing careers can last decades. When there are more dollars saved, athletes have flexibility to think about investing in opportunities, like startups and businesses, that will continue to grow their earnings and diversify their portfolios.
Kenneth Shropshire leads an insightful discussion with Mori Taheripour, Jacques McClendon and Shelley Miles as these experts of sport and finance provide their insight on how athletes can maintain a successful post-career lifestyle through financial responsibility.