The best student athletes at colleges across the United States encounter opportunities to sign lucrative contracts with professional teams after graduation. Despite the significant sums of money their professional contracts may entail, most athletes end up with serious financial trouble down the road thanks to mismanagement. Unlike most professions, athletes do not enjoy much job security. One serious injury could end their career faster than it began, and not preparing financially for early retirement from sports leaves many of them in financial disrepair.
A founding partner at Greylock Capital Group, Stephen Etter, is working to help student athletes avoid the pitfalls of financial disaster through education. Etter has custom-designed a course to give student-athletes the information they need to make informed decisions about investments and contracts. He explains, “So many student-athletes treat finances like a foreign language. I want them to understand enough of the lingo to be able to have a conversation with whomever they entrust with their money.”
The idea came from Nnamdi Asomugha, an NFL player for the Oakland Raiders, Philadelphia Eagles, and San Francisco 49ers. “Before entering the N.F.L. in 2003, Asomugha improved his financial literacy through weekly meetings with Etter.” Etter has also worked with Marshawn Lynch and “four-time Olympic swimming champion Missy Franklin, who turned professional, auditioned agents and mulled endorsement offers last spring while enrolled in the course as a sophomore.” Franklin told the New York Times that, “the timing was just so perfect.”
Her goal in taking the course was, “to be smart about what I’m doing with my money.” She added that, “I sit down with my accountant and ask what’s happening with my investments, and even the simplified version can be hard to follow and understand, but knowing I’m taking responsibility for my finances gives me so much confidence, I leave these meetings feeling empowered.”
More than half of professional athletes end up in financial ruin. A 2009 article from Sports Illustrated estimated that, “60 percent of N.B.A. players endured bankruptcy or dire financial straits in retirement.”
No matter what your salary, financial mismanagement is a costly mistake. While we are not all athletes, we can all benefit from sound financial advice and good fiscal management. Make sure your portfolio gets the attention it needs with an expert from Apex Financial Advisors.