Go ahead and ask, what do they do with the money?? I know you want to know what REALLY happens to all those millions that professional athletes rake in from bouncing and throwing around balls, and as a former professional basketball player turned athlete business manager, I’d like to answer your question.
To the average fan, the only thing an athlete does is play ball. They believe that an athlete’s day is consumed with practice, media appearances, and games, and that their every waking moment is spent thinking of ways to win the next Super Bowl or NBA Championship. Unfortunately for the sports super fan, a professional athlete’s life is far from simple. They have many additional ‘jobs,’ and they are expected to be great at all of them. They are husbands, fathers, sons, role models, businessmen, entrepreneurs, mentors, philanthropists, and community leaders. If an athlete makes one poor decision on any of his ‘jobs,’ the results can be career-ending. Talk about pressure!
However, in all honesty, no one really cares about the pressure they’re under. Anyone paid millions of dollars a year to multi-task is adequately compensated for their inconvenience. And we all know that professional athletes have no trouble bringing in large salaries from blockbuster contracts, multi-year endorsement deals, and appearance fees. So, again, what do they do with the money? More importantly, what SHOULD they do to keep it? Here is my advice for the 4 Business Basics that both professional athletes and business professionals can apply for long-term success.
- COMPLEMENT YOUR CAREER
Many athletes struggle post-career, because they fail to develop a skill set that is transferrable beyond the game. They become so focused on their current endeavor – their sport – that they fail to position themselves for future opportunities. Many have interests and hobbies that would make great second careers and revenue generators, but they fail to invest the time and resources into cultivating their weaknesses into an income-producing asset. Career development and personal coaching services can help athletes improve their business skill set.
Business professionals, oftentimes, also neglect to invest the necessary time and resources into continuing their education in the latest innovation and automation techniques. As technology advances, there are easier ways to complete routine tasks, and automating several business processes can save business professionals time and money. Invest in education and personal development!
- KEEP THE CASH COMING
Most newly-minted millionaires overlook cash flow as an important component to managing their wealth. Because professional athletes have access to large sums of money, they underestimate the security of receiving a steady paycheck. They may feel more stability in the amount of their nest-egg, but they must not overlook the fact that after a certain number of withdrawals with no deposits, they can reach a zero balance just like everyone else. This is where their income producing skill set comes into play.
Business owners feel the cash flow crunch more than any other group of professionals, because the costs of operating a seasonal business can be devastating to their bottom line. There must be some consistency in cash flow, and businesses must prepare to cover expenses during slow business cycles. Building a liquid emergency stash can help ease the financial pressure during both career transitions and business droughts. Remember, emergency funds are made for emergencies!
- LIVE A LIFESTYLE OF LACK
The world of professional sports is glamorized when it shows the expensive vehicles, private jets, and exquisite mansions of its athletes. Sadly, most of the athletes that invest in these depreciable assets find themselves in repossession and foreclosure proceedings, because they fail to account for the maintenance, upkeep, and other expenses involved in owning them. As a financial advisor, I always advise my clients to invest well below their ceiling to account for miscellaneous expenses.
Business professionals suffer from the same ‘accessory’ problem. They try to convince prospective clients that they are successful at their craft, by flashing material possessions that they truly cannot afford. If they kept their audience focused on who they are and what they are capable of, instead of what they have, the waste of assets could be prevented. Branding is essential!
- SUPPORT WHO SUPPORTS YOU
One key reason that professional athletes experience money troubles is that they try to support multiple people. This wouldn’t be such a heavy burden, if the individuals that the athlete supports had a skill set to alleviate the financial pressure in some way. For instance, a relative or friend that is skilled in an area can be hired by the athlete to perform a service for pay. In this case, the relative earns their keep by providing a service the athlete would have to pay for anyway. The problem arises when athletes pay relatives and friends to just ‘be there.’
In business, there are many people that can help promote a product or service. Oftentimes, the unofficial business code is to cross-promote other businesses and their success for mutual benefit. Sometimes, business owners can be in such competition with everyone that they fail to see the opportunity for all parties when marketing another business. When handled correctly, this is a great tool to expand a customer base or reinforce a brand. Thankfully, social media makes this promotion easy, so use it!
These are my Business Basics for both professional athletes and business professionals. By following these tips, both sets of professionals can avoid the common pitfalls of their respective industries and teach others how to position themselves for long-term success. Now, that’s what athletes should do with their money to keep it!
Guest Post by Tywanna Smith, check out her company: www.theathletesnexus.com/