On top of managing performance, a public image and your career, as a professional athlete, you need to successfully manage the wealth that you generate. Often, you’ll make more money each year until you peak your income before retirement. Use this wealth management advice for professional athletes to form a successful strategy that can help you remain financially secure well into the future.
It may be tempting to spend the money as you earn it, especially if you’re earning a lot more money than you’re used to. However, you’d do better financially if you give your money time to grow with interest instead of using it as liquid capital. Designate a certain percentage of your income toward financial investments. This way it will become a habit as your income increases.
Save As Much as Possible
You never know when an injury will end your career or you won’t be able to renew your contract. It’s important to save as much as possible now, when you’re making more money than usual during the course of your professional athletic career. After all, it is how much money you save, not how much money you spend, that really determines how wealthy you are. Carefully consider large purchases and learn about healthier financial habits earlier in your career to make the most of the money you’re earning as a professional athlete.
Consider Alternative Income Sources
The money you earn directly from being a professional athlete is just one income source that you have access to. There are other ways that you can earn money as a professional athlete, including through sponsorships and investing in branded products. Thoroughly investigate what other income sources you may have access to as soon as possible so you can take advantage of your total earning potential while you still can.
Have a Contingency Plan
You won’t be a professional athlete forever. Unlike in traditional careers, you won’t continue to earn more all the way up until retirement. It’s important that you plan what you’ll do when it comes time to retire as a professional athlete. Will you go to college? Get a job? Invest your money into a business that you’ll run? There’s not one solution that’s perfect for everybody, so you’ll have to really think about what it is that you want to do when it’s over. If you end up with an injury, you may need to execute this part of your financial plan earlier than you think.
Pay Enough in Taxes
Some professional athletes end up in trouble with the government if they fail to pay enough in taxes. Others need to draw money from their savings or other financial investments to cover this predictable expense. With that being said, be aware of tax deductions that might be able to lower your overall tax bill. Certain investments, such as health and education savings accounts, are tax deductible. If you have children or plan to have them in the future, investing in these types of accounts will be beneficial in the future, even if you don’t need them for yourself.
Staying proactive with your finances is among the most important wealth management strategies for professional athletes. You want to develop a strategy that uses the money you’re earning now to prepare for a strong and wealthy future. For assistance in creating long-term wealth, contact Corda Management.