When people hear that I advise professionals sports people, their first thought is that I stop them from doing stupid things. I can understand this way of thinking but, having worked within this niche for the past 10 years and having been a professional footballer myself, I really try to impart that everyone is different and will see the world through their own lens.
Take the stereotypes and put them away, preferably prior to meeting any prospects in the sporting arena.
Whilst young sports stars often have a lot in common in terms of newly found fame, money, and status, they come from different walks of life. They’ve been through different trials and tribulations to get where they’ve got to, and it’s important to be ready to listen when speaking about money.
What is their perception of money? How well educated are they around the subject? Do they have any money memories that affect their way of thinking? Do they have any family members they’re going to need to look after? These are just some of the considerations we keep in mind as relationship develops with each of our clients.
We have a base of three elements that we feel are crucial to the planning for sports professionals.
Understand Income & Expenditure
The initial conversations we have often centre around the building blocks of money. We help clients get a grasp of their income, how the tax system works, why they should review their paycheck, and why they may need to add an accountant to the team.
We then go into budgeting and helping people understand their incomings and more importantly their outgoings. This part is crucial. Expenditure can be a real drain on people and once they are used to a certain level of income/lifestyle it’s very hard to go backwards. Society as a whole is moving to having everything now now now and the rise of social media makes all of this play out in real time. Keeping Up With The Joneses is a global epidemic.
Develop & Practise Good Habits
The very lucky few in sport have steady income for a 7 to 15-year period. These select athletes can earn enough to last a lifetime. A far bigger percentage are going to have to work again because during the time where they earnt really well, they spent really well to match. The biggest factor as to when they’ll need to go back into the working world, for how long and for what level of income is mainly derived by how much these athletes spend.
That is not to say that we don’t want our clients to spend. We encourage them to get into the habit of being a conscientious spender: spending on things that bring value ahead of just buying more stuff that you don’t need. Life is short, their time in professional sport even more so and we encourage people to enjoy the journey because they are extremely fortunate. It’s all about balance.
Young people’s biggest asset is their youth and we work hard to get people saving on a monthly basis. The earlier they pick up this habit the better. We explain that they are paying their future selves first. We discuss that every time they get a new contract, or a pay rise, a large bonus: if the salary goes up, so does the saving.
The one area where I do stereotype is to say most professional sports people have discipline. To have made it as far as they have often takes that skill. We therefore relay that saving & spending are another form of habit & discipline. Good habits are useful in any walk of life, be it sport or business. We feel our clients want us to help them develop better habits and keep them on the right path.
Keep Things Simple
The final element is something that I think is fundamental in everything and that is to try and keep things simple. The more complicated the solution, the less likely it is to be understood. We want clients to understand their position as much as possible. So, become extremely good at simplifying the complex. If we can keep a client focused on what they do best, this will likely be the most productive outcome for them due to their extremely high level of human capital.