Anyone hoping to become a professional athlete must work hard on the fundamentals. Those annoying essential drills and exercises ensure you can score even when the pressure from the crowd, other teams, and time left on the board creep into your mind.
As a reward for this hard work, you can earn a substantial income which can be utilized to ensure a comfortable and stable financial future. Managing this windfall is a different type of skill, the fundamentals of finance, essential to your future well-being.
The management of finances is comparable to the Triple Threat position in basketball. Having played professionally overseas, I learned this crucial skill from my earliest days of basketball training. The Triple Threat position gives you the most control on the court and sets you up for your next move allowing you to pass, shoot or dribble.
Similarly, grasping the fundamentals of finance is crucial to your long-term financial stability. It puts you in a position to have options, much like the Triple Threat position, to protect, invest and achieve your goals.
Fame Costs, Who’s Paying for It?
Social media is peppered with imagery of professional athletes living a lifestyle few can imagine. These athletes make a great deal of money in a short period of time. Due to lacking financial knowledge, most face financial difficulties like overspending, long-lost family members looking for help, or even bankruptcy.
In short, the athletes are the ones who pay for it. They spend years perfecting their on-court game but fail to manage their off-court game with an attitude of "it's easier just to make more money than to manage my finances effectively."
You wouldn’t spend years perfecting how to navigate the court only to give up when you’re under the basket? Why would you do the same when you finally earn a decent income?
Implementing the Financial Triple Threat
Similar to seeking assistance from professionals such as strength and conditioning coaches and nutritionists to enhance your game on the court, professionals should also assist you with managing your finances off the court. The optimal solution is to locate a trustworthy (read: experienced) wealth management specialist. There are numerous choices to be made concerning risk management, retirement planning, investment management, taxes, liquidity management, legacy planning, and other aspects of your finances. By working with an experienced professional, you can confidently navigate every scenario and attain financial confidence.
If we had to pick which areas would be the Triple Threat, it would emphasize saving in these three ways:
Save on Taxes – Get comfortable with the phrase “pre-tax wealth.” This is the money you want to leverage for investments and assets. Taxes can take a significant portion of your income away, especially when you make a lot of money. Learning to take advantage of tax credits, deductions, and building businesses will lower your obligation and keep more cash in your pocket.
Save on Income – As a professional athlete, you only have a short window to bring home the bacon. Most pros only last 5-7 years (depending on the sport). That is why you need to set up a program that emphasizes income. The income you can enjoy today and income you will enjoy once you hang up your shoes.
Save on Stress – By hiring a financial professional to aid with your financial choices, you can concentrate on refining your skills on the court. Engaging an experienced professional to guide you at the outset of your career will lay the groundwork for achieving the post-career life you desire.
Your Last Dance
Remember that no one gets into the pros by accident. It is an intentional decision that requires discipline to craft daily habits toward your goal. That is why less than 2% of NCAA athletes make it to the pros. Therefore, you need to be smarter than the average player and focus on the critical fundamentals of a robust wealth management strategy.
Being intentional and proactive about saving money can help you avoid financial difficulties and achieve your income goals. Just as the triple threat position in basketball prepares you for your next move, being financially prepared for the future is essential. So, save, save, save!