Five Tips on How NBA Players (and athletes) Should Handle Their Finances
A radical and groovy congratulations to the Milwaukee Bucks for their hard earned #NBAchampionship. It just goes to show that we should all #fearthedeer!
Vin Baker? Jason Caffey? Derrick Coleman? Eddy Curry? Rick Mahorn? Latrell Sprewell? Antoine Walker?! Delonte West?!! Over 60% of NBA players go broke a few years after retirement. This goes worse for NFL players, 78% of them go through the same deal once their playing days are done.
They’re earning 6 figures, you’d say. But they do and will still do get broke if they do not watch themselves. They earn so big in such a short time, they tend to forget that every athlete only has a very small window of earning. They cannot stay in top condition forever, no matter how good they are.
It can be due to an expensive and extravagant lifestyle. The houses, the cars, the parties, the watches and blings, the jets, the relatives, the friends! Sometimes, bad investments, bad spendings, and even bad people take advantage of them. Although there are times when it’s just a bad divorce! With that in mind, here are some tips on how our fave NBA player (or any athlete for that matter) can keep their nest egg well into retirement!
1. Control or even Get Into Good Financial Habits. The window to earn is very little. Too much of the game’s business side is beyond your control. Teams can kick you out even if you’re the best guy out there. An ugly foul could land you in a bit of trouble and get you fined. A bad word in social media can do the same. An injury could sideline you and may affect your value as a player too. Plan ahead.The sooner a player does this, the better. Most players are out of the court by their mid 30’s. What then? The NBA pension only kicks in when you get to 50!
2. Understand How Much You are Earning Versus your Spending. It’s simple. Don’t spend more than you earn. When money comes in, consider your spendings and your savings (and some for Uncle Sam). I know as an athlete you travel a lot, practice a lot and play a lot, but your finances should always be a big part of that. Hey, since you’re always on your phone, get an app, list them all down– earnings, spendings, savings, investments, no matter how simple it may sound. You’ll thank me one day.
3. Surround yourself with a Trustworthy Team. A good agent, a lawyer, a financial adviser can keep your money growing, especially when they are a team. Locking everything to one person can be very risky for you.
4. Don’t forget your Debt As much as you can, while you are earning the big bucks, pay down your debt, don’t forget your mortgages. Limit your layaways. If you are done with your career and you have very little debt, that’s a great retirement right there in itself.
5. Diversify your Earnings. Invest, get insured, seek out properties. Don’t put all your eggs in one basket. Spread them out in controlled instances and times. Remember #Shaq and Google? Seek out financial advisers, and make sure you understand all the risks.
What you want to be is financially independent in the days after your time in the court. As an athlete, you pour your soul and sweat into that court and there is nothing wrong with enjoying yourself. But always keep an eye out for you and your future. There is very little time and a whole lot of others who can replace you. Be smart and learn the ropes of your own finance, plan ahead, and slam it home!