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Let’s be honest: you didn’t make it this far on luck alone. You’ve worked hard - very hard - often forfeiting time with family and friends for pre-dawn wake-up calls, late night practice sessions and seemingly endless training. You’ve made some important choices to get to this point. You’ve made some serious investments too – in time and money. And you’d like to protect both. If that sounds like you, read on.
Young athletes face unique challenges that differ significantly from others in the same age group or different professions. For example:
Those distinctive professional attributes make a sound financial plan all the more essential. So, as you embark on your career as a pro-athlete, here are five financial tips to guide you forward.
1. Get yourself set up early. Search for a bank that can provide U.S. and Canadian accounts and credit cards that you can access all in one place. Make it easy on yourself.
2. Resist the temptation to splurge. Bring the “you only live once” attitude to the rink, but best not to apply it to your money. We’ve always been struck by the statistic that the average lotto winner spends everything they won in less than eight years. Excited by the big windfall, they immediately buy a new house, new car and spend generously on friends and family. What lotto winners – and young athletes – soon realize, however, is that there’s a huge cost to maintaining these luxuries. Besides, contracts – and one’s income – can change suddenly. Safeguarding your assets today is essential to financial security tomorrow.
3. Create a budget and stick to it (or find someone to help). We all know that practicing the same move over and over creates muscle memory that helps you respond in the moment. Think of a budget in the same way. It’s like having “guardrails” that guide you on where you need to spend money and how much extra you have to treat yourself. Keep in mind that there will be many expenses you’ll need to cover in your career and they should always take priority.
4. Protect your money. Think of a high-profile player that you follow. We bet you know some very personal things about them, including their annual salary and travel schedule. Sounds like a perfect target for both cybercriminals and shady advisors, right? Don’t be that player. Refrain from handing over your money to a person or company unless they invest heavily in cyber risk management. And if they can close up shop tomorrow without incurring long-term reputational risk to their brand, avoid them too. Bottom line: don’t let anyone have access to your well-earned money unless you trust that they’ll do everything to protect it.
5. Find a trusted advisor. Some people may try to take advantage of you and make a quick buck off your success. Your best strategy is to find someone you trust who can then quarterback a team of diverse experts who understand the unique needs of athletes. You’ve put in your 10,000 hours to become an expert in what you do, so should your advisor. Just like trust is key to the relationship with your teammates, the same is true for the team that you entrust with your money.
Great advice helped you succeed as an athlete. It can help you secure your financial future too.
At BMO Wealth Management, we have a team of athlete specialists who understand the challenges you’ll face during all stages of your career and life – from fluctuations in income and unpredictable career spans, to family obligations, privacy issues and transitioning to life after the final whistle. Our professionals help you manage all aspects of your financial future including investment management, banking, trusts, insurance, philanthropy, taxes, cross-border solutions and financial planning.
To learn more about how we work with athletes and coaches or to speak with an experienced BMO Wealth Management advisor, visit https://uswealth.bmo.com/who-we-serve/sports-entertainment-professionals/
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