How to set yourself up for financial success as a professional athlete

31 August 2021

William Tuffley, Associate Director, Business Services |

Those whith the opportunity to compete at the highest levels of sport have exciting earning potential - but this phase of life won’t last forever and, through injury, could end without a moment’s notice. This combination of high cash flow with a tremendously uncertain future makes for a unique dilemma. As a professional athlete, it’s important to remember your ability to work, to play sport and generate income is the greatest driver of your wealth. You are your greatest asset.

So, how can athletes busy winning on the field or in the gym today, structure their finances to set themselves up for victory tomorrow?

Make a financial plan

Your teammates and fellow athletes are likely paid very differently to you, especially if you are at different stages in your sporting career, are playing different sports or have achieved varying degrees of success. Some may be earning ten times as much as you, particularly if you’re a young, emerging player. It’s therefore important to understand that despite the barbeque banter and pub talk, the investments and strategies your peers are pursuing may not be appropriate for you or align to your personal needs and objectives.

The foundation of a financial plan is based on your personal goals and what you want to achieve in life. A good plan should ensure you can achieve these goals in the best way possible, whether through appropriate investments, tax structures or tax effective strategies, whilst enjoying life as much as possible along the way, without sacrificing financial security post-retirement from sport. Your goals may include buying a home, starting a business, supporting your family, achieving financial freedom by 40, taking two holidays a year forever or owning a jet. No matter the goal, it’s important to use this as a guide to your financial strategies.

Team up with a trusted adviser

It’s equally important to share your goals and any prospective investment opportunities presented to you with your financial adviser. An athlete’s relationship with their financial adviser should be a dynamic one in which both parties exchange ideas and are in sync. Your adviser shouldn’t be making decisions for you on their own. Conversely, the world of finance is complex and you don’t know what you don’t know, so having an adviser to help you avoid investment pitfalls and assist you to make better informed decisions can save you time, money and heartache.

Avoid excessive debt

An athlete’s earning potential is likely fleeting; career-ending injuries can happen at any time. So whether borrowing for an appreciating asset such as real estate, or a lifestyle asset such as a sports car, it’s essential for athletes to avoid becoming overextended.

Borrowing to invest can be a great way to build wealth, but the last thing you want to do is take on excessive debt to buy assets based on your income today. Through injury, your career can end in the blink of an eye and you could find you’re suddenly drowning in debt you can’t afford to service because you’re not earning the income you’re accustomed to.

Athletes should strive to be free of debt when they retire from their respective sports. Building up skills for later in life, as well as professional networking with the many businesspeople on the periphery of sport are good goals to pursue in the off-season.

If you would like to discuss your situation with a trusted adviser, please contact our Private Wealth team. For more insights, watch our recent webinar discussing cashflow for athletes, in full, here.