Although many of us are enamored with the idea of becoming professional athletes, many of us do not have the skills, talent, or will power, those who do tend to acquire great financial wealth during their careers. However, many people do not realize that professional athletes rarely maintain their wealth, and frequently face major financial problems once their athletic career is finished. Many athletes lack the financial literary and spending control of ordinary individuals, as the huge upfront salaries that they receive delude them into believing that they do not need to control their spending.
Athletes and Financial Literacy
As all of us know, it is extremely difficult to become a professional athlete. Athletics requires a lifelong commitment, and even those who are committed frequently fail due to the competition for a limited amount of spots on professional sports team. Those that succeed, however, are highly rewarded with lucrative contracts and bonuses that stem into the millions of dollars. At the pinnacle of their success, athletes have difficulty managing their finances, as they believe themselves immune to financial trouble.
Unfortunately, athletes face higher bankruptcy rates than the average American, due to the nature of athletic careers. Instead of working for 40-50 years, an average athletic career is over at the age of 33, and those in highly demanding sports such as football frequently do not last past the age of 28. As such, athletes face their financial payoffs upfront, as they cannot rely on their athleticism to sustain them for their working lives due to the physical damage that such athleticism causes.
Athletes are victims of their success, and it is difficult to adjust to normal life after commanding high-powered contracts from sports teams. Grown accustomed to easy money, many athletes do not have the savings needed to remain unemployed after their athletic career. Close to 78 percent of professional football players are either bankrupt, unemployed, or divorced two years after the end of their career. This is due to their frequent lack of secondary skills and education, as many professional athletes attend university until they are drafted by a professional sports team. As such, finding a new career path is difficult, as most individuals their age have significantly more work experience in their field.
Due to these statistics, many organizations have begun programs to help professional athletes adjust to day-to-day lives and new career paths. Since many athletes initially have significant savings, many programs help on teaching former athletes entrepreneurial and business skills. Through these efforts, former athletes are able to turn their nest egg into a lifelong income through investments, business start-ups, and other financial instruments.
Although considered a glamorous career choice, many athletes face financial difficulty after the end of their career due to a lack of education and money management skills. As such, many professional athletes end up bankrupt and unemployed, as their previous career path does not easily translate to normal day-to-day life. Due to the high rates of bankruptcy seen within professional athletes, a number of organizations have begun programs and workshops for professional athletes in order to ‘re-integrate’ them back to society, and to teach them valuable skills that will allow them to find a new calling in life.
Derek Truman is a freelance writer based in Lansing, Michigan. Derek primarily focuses on accounting, accounting jobs from moneyjobs.com, bankruptcy law, banking, investment advice, personal finance, taxation and other related topics. Those curious about the field of accounting should view the information available from moneyjobs.com.
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