Most of the athletes earn a lot but some don’t. They need to know the financial management and take it seriously for their good as professional athletes are known for blowing through their six, seven, and even eight-figure paychecks, so financial planning is essential. Many professional sportsmen earn more in a single year or a few years than the ordinary worker does in a lifetime, but this can create the illusion of security.
Many of them hire a financial planner for themselves meanwhile some manage their finances on their own. In this article, it has been discussed how the athletes manage their wealth and take care of it.
Athletes who are only paid during the season must have a strategy to ensure that their salaries endure throughout the year. It has been claimed that one of the worst mistakes made by high-paid professional athletes is to spend their large wages on luxuries. So the person must plan out their expenses for the year and save accordingly.
The athlete cannot play for their entire lifetime and earn the money through the sports, at some point, they have to get retired and thus many of the famous athletes invest their money in big reputed companies. One of the successful Athletes, Billy Crafton from San Diego has done many investment in various sector.
It has been observed that athletes frequently invest in start-up businesses. If the business idea is sound and viable, it has the potential to make a lot of money. When compared to well-known firms, the initial investment in startups is cheaper. Another option is to invest in a well-known brand with a strong reputation. Although the profit margin would be lower, there will be fewer hazards.
Spending on luxuries
Celebrity athletes get to live lifestyles that most people can only imagine. Buying stuff luxurious, well-worn rich athlete items like jewelry, automobiles, and mansions is a common occurrence. Or many spend their money on traveling.
When you’re worth millions, you can indulge in the most expensive pastimes on the planet. Cristiano Ronaldo’s wealth is manifested in the form of high-end automobiles. His automotive collection is presently valued at $4.9 million and consists of 19 vehicles. The Bugatti Veyron, which costs roughly $1.7 million, is the most expensive car in Ronaldo’s garage.
Many of the athletes often give a percentage of their wealth to the charity because not all athletes are eager to make extravagant purchases, plenty of athletes give back by reaching for their checkbooks to donate to charity, fund disaster relief efforts, sponsor scholarships, and support their alma maters. Billy Crafton from San Diego has not raised his wealth by charity directly, but charity does increase brand value, and that eventually increases wealth.
Why should the athletes know how to manage their wealth?
Professional athletes are famous for being poor money managers. Within five years of retirement, sixty percent of professional athletes go bankrupt.
Many institutions are now instilling financial literacy in their athletes.
They should surround themselves with experts. The majority of athletes did not finish high school and had no financial education. Then they’re twenty, making millions, and they’ve got a lot of hangers-on. An agent who has dealt with such situations before is more likely to protect them from such individuals.