I once heard Hall of fame wide receiver Cris Carter break down the true meaning of an athlete’s wealth by explaining it as a bell curve. Most successful athletes get a bulk of their lifetime’s share of money at an early age, where as the average working person builds to get the bulk of what they have financially towards the end of their career while climbing that ladder to success.
So what do future or current pro-athletes need to do the secure the bag during and beyond their playing career? I reached out to a qualified expert, Terron Tidwell, who is a licensed wealth manager with Hudson Point Capital. He specializes in high net worth individuals in sports and entertainment. He broke down five tips that these future pros should know:
RESPECT.: Terron, what do you think these athlete need to understand before they go pro?
Terron: Athletes who are turning pro must understand that they are transitioning from just being an athlete, to now becoming a business. here are a few tips for an athlete:
- Hiring a QUALIFIED Team: As CEO of that business, they’ll need a board of directors. That board would be inclusive of an agent/contract lawyer, CPA, financial adviser, insurance agent, and a personal trustee. The team will be there to help give them proper guidance.
- Managing the Lifestyle: They need to understand and manage their cash flow, [which] is their number one priority. It’s about knowing what do I have coming in, and where is it going. Grasping the basics of financial literacy is key for their long-term financial survival.
- Staying Out of Debt: For most athletes, they will be pushed out of the game before they are ready. It’s imperative that they save substantially, and live below their means. It’s not sustainable maintaining a high-end lifestyle, borrowed on future earnings that’s no longer there or severely diminished.
- A Diversified Portfolio: The key to lowering investment risk is to have different buckets that money is being poured into. Don’t go off chasing the “next big thing” or tax schemes. If one does participate in a big idea, limit it to where it doesn’t change one’s lifestyle if it doesn’t work out.
- Protect Yourself: Things happen in life that you weren’t planning on. Anything from career-ending injuries, lawsuits, divorce [and] child support are all things that could severely impact an athlete’s life. Prepare for the worst but hope for the best.
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