Paving Your Way to Financial Freedom

April 7, 2015 Posted in Athletes, Website

During the past years we have witnessed salaries that were once considered a distant dream for every basketball player. Increasing TV deals, alongside with sponsorship and endorsements, led to lucrative contracts in the basketball industry. With that being said, one would expect that such basketball players, after their retirement, are financially set for life. But that is not the case. Several studies show that 60 per cent of basketball players declare bankruptcy within five years of retiring.
The top three reasons that may lead a basketball player to financial distress and bankruptcy are:
Family: Players like Antoine Walker and Jason Caffey went broke due to family reasons. Caffey had 8 women and 10 kids to support; a situation that unfortunately got him arrested for failing to pay child support, and eventually led him to bankruptcy. Walker, supported financially 70 relatives and friends, which made him another “cash cow” and who inevitably ended up broke. Additionally, 60-80 percent of professional athletes are “doomed” to divorce, some of them more than once, each time with an enormous financial pain.
Lifestyle: The way a basketball player chooses to live his life has an enormous impact on his finances. Gambling, extraordinary and unnecessary spending in cars, houses, jets, yachts etc. Players like Allen Iverson and Antoine Walker spent a large percentage of their total career earnings, 200 and 110 million dollars respectively, on account of their “wild” lifestyle before they eventually went broke.
Absence of a plan: How many players have an emergency fund? What if their career takes a massive hit because of an injury or a health problem? Most of them do not have a life-long plan and they spend as much as they earn. But what happens when you do not earn anymore?
After all, basketball players are people just like everyone else. They make the same mistakes that any of us have done or perhaps will do, but on a larger scale. The lack of an experienced and trusted financial adviser in their life can lead to catastrophic mistakes, not just for them but their families as well.
What can they do?
(1) Learn the basics: Educating athletes about finances is a challenge. Financial concepts are not something that athletes, especially the young ones, are familiar with and they usually resist spending time in financial education. However, athletes are often approached by different “money experts” with various investment schemes and they cannot assess whether such investment propositions are wise or not.
Also, when it comes to listening to financial advice, there is a lot of misplaced trust among successful athletes because of their celebrity. They are often isolated among a select group of people they feel they can trust, and don’t allow themselves to listen to different points of view.
(2) Find the right Financial/Business Adviser: It is a fact that basketball players, and every other player, need sound financial and business advice. As a result, the financial burden is lifted from their shoulder giving them the opportunity and time to concentrate on their game. But, the right financial adviser has to be experienced and committed to the player, dedicated to offer the player the best solution that fits his/her needs and preferences. In addition, a trusted adviser will give the player advice on how to plan his post playing career so that he transitions from playing to post playing with financial security.
In conclusion, the combination of the above will be a powerful tool for the athlete which will help him/her overcome any financial obstacles he/she may face. In addition, the athlete will be empowered to build the foundations of a life-long plan, ensuring that he/she will have financial sustainability for the rest of his/her life.
We, at APC Sports Consulting Ltd, are committed to help athletes attain and sustain financial freedom through a holistic approach. If you are ready to start planning your financial freedom and you are looking for a firm that goes above and beyond, contact us to set up a consultation.