Photo by Isaac Lind on Unsplash
Professional athletes are glorified for what they do on the field, pitch, and court. They’re also envied for the large sums of money they make. While pay bands can vary widely from the bottom tier of a sport to the top tier, or even from sport to sport, there is no shortage of stories of that money being squandered on bad purchases and bad investments. Tales of hundreds of millions of dollars being lost who knows where are unfortunately prevalent enough that most professional leagues have enacted some form of mentorship or introductory program to help teach recent draft picks how to safeguard their money.
There appears to be a shift, however. Players are starting to get smarter with their investments, buying businesses that can keep a paycheck coming in after their playing days are over. Whether they are pursuing degrees, buying franchises, or simply following the age-old adage of living within their means, players are starting to treat their professions and riches as a business, and here are a few examples of that, with what they have learned that can help you in your own business and finances.
Humility in Business
DeAndre Hopkins has spent 13 seasons in the NFL and still has not hung up his cleats. As a marquee wide receiver, he has received several large contracts, having earned $144 million so far. Even though he still has not retired, he hasn’t let being unsigned stop him from learning more about football, currently shadowing the New England Patriots’ coaches and personnel managers. His philosophy is to always ask questions and try to improve your IQ in whatever business or team he is a member of. That same approach has served him well in his financial life, as he has returned to classwork at Clemson University to learn how to manage and negotiate his own deals, investments, and finances.
He has used his time off to reinvest in his own future. Being humble enough to return to classes after more than a decade away from school means he is getting an education in the classroom and in the boardroom as he continues to invest in and buy businesses, now with a greater understanding of the ins and outs of the process.
Proven Businesses are The Smart Play
Shaquille O’Neal is another sports star who learned early on that you should ask questions even when it might make you feel stupid or look as if you don’t understand what is going on. Early on, he made the mistakes common to most young players with large sums of money at their disposal. When his financial advisor told him that if he didn’t cut his spending, he would be one of those cautionary tales used to teach others what not to do, he realized that his salary was on a time clock. He couldn’t go on playing in the NBA forever, so he started asking questions, went to school, and built a net worth of over $500 million, almost twice as much as what he earned from playing basketball.
His approach to buying businesses was to pursue what was proven and to avoid fads. He invested in several fast-food chains, 24 Hour Fitness, and car washes, all of which were highly successful. By choosing a well-established business, he avoids the stress and increased focus required by investing in businesses that are not yet proven. With his available capital, he could easily chase fads or odd ventures, but he is in business to build his wealth, not his notoriety.
Save More Than You Spend
While Rob Gronkowski will never be confused with a financial genius, he knows what works when it comes to investing and building wealth. As a superstar professional football player, Rob made more than $71 million over 11 seasons. What’s truly unique about his story is that he spent that entire time saving his NFL salary, living instead off of his endorsement deals, commercial success, and free food at the New England Patriots facility.
Rob recognized that the NFL stood for Not For Long, so he banked his salary and used his reputation as a freak athlete to start businesses focused on fitness and sports, two things that are definitely associated with his larger-than-life personality. Spending frugally and leveraging his strengths have helped him become a success story for post-career athletes in any league.
Learning how to invest and use your money wisely after a windfall means being able to accept what you don’t know and asking for help at the start to avoid making bad decisions that could impact your future, whether it is after the lights have faded or simply after an early retirement to pursue new endeavors.
If you are looking for a post-career investment and need help with choosing the best business to buy, let us help.