We’ve been watching the numbers as we follow the 2015 draft and we’d like to offer sincere congratulations to Damarious Randall and all of the other 31 players chosen in the first round.
We’ll be keeping an eye on the next six rounds as well.
It’s an exciting time for the NFL and we’re optimistic about the upcoming season, especially the way it appears to be shaping up for our favorite team, Green Bay.
Transcending all of the immediate celebrations and lingering contract negotiations, however, looms another number that, despite efforts at the high school, collegiate and professional level, doesn’t seem to be going away.
It is still true that 78 percent of NFL players face bankruptcy or serious financial stress within just two years of leaving the game, according to a July 2013 issue of Sports Illustrated.
We bring this alarming number up at this happy time because we think that number, 78%, should be the first one NFL players think about as they plan their future.
Many factors contribute to this sad continuation of mind boggling waste – pressure from family and friends to share the big payday, the general brevity of an NFL career, bad financial advice, and/or the stubborn refusal to accept sound financial advice.
With that, and our 30 years of wealth management experience, we offer the following five tips for making that NFL contract money last your life.
1) Understand the significance of unqualified money. You will have to pay taxes on the money you earn and those income taxes will be significant. You can structure your contract to minimize the impact, but, in the end, you must understand that the number on your contract is not the amount that will be going in your pocket.
2) Don’t make any large purchases during your rookie year. The new house, expensive car, and flashy jewelry feels really good in the moment, but they’re all just distractions. The transition from college to the NFL requires a concentrated effort. Use your energy to build your strength, both physically and mentally. Leave the big purchases for when you have time to consider them, and their impact on your finances, carefully.
3) When it comes to family, remember the difference between a want and a need. If you use up all your money on big purchases now, you won’t be able to help anyone down the road. Don’t let anyone guilt you into a poor financial decision.
4) Enjoy every minute of your NFL career, but think about what you’re going to do after it ends as well. Finish that degree! Don’t be too proud to go to summer school. Look at on-line options. Wrap it up in the off-season. Do not underestimate the advantage of having a college degree and the impact it will have on your future employment.
5) Choose your financial advisor wisely. Look for someone with a proven track record and with whom you can relate.
At Winch Financial, we’ve been in the wealth management business since 1981. We’ve counseled active players and retired players and we know the specific challenges professional athletes face. We have a fiduciary relationship with our clients, which means we are legally obligated to act in their best interest.
We’re thrilled for the 2015 NFL draft class and so excited to see what’s in store for them. If you or anyone you know would like more information about how to work on making the money you earn today last your whole life, please contact us. We’d be glad to help.