The game doesn’t last forever. This is a key phrase one hears over and over again, yet the twenty and twenty-one, and twenty-two year old kids coming into professional sports don’t listen to it. Someone so young coming into millions of dollars, when they’ve had nothing, has very little concept of how to handle immediate wealth. We, in the business of guiding athletes, have a fiduciary responsibility of educating athletes.
Thinking they have all the time in the world, when in fact they do not, athletes should be taught precisely how procrastination hurts the most with regard to investing for retirement. One can always make up for a poor investment choice, a lack of strategy, or paying too much in taxes. One can never make up for time lost.
After taxes and inflation, keeping money in a bank savings account or money market fund is a losing proposition. It should be emphasized to young athletes that even if they make a poor investment choice, through diversification and regular monthly allocation, they’ll be better off in the long run than keeping money “safe” in a savings account.
We must educate the athlete to understand and believe, a concept of “paying yourself first” is of the utmost importance. When an athlete gets paid, typically, he thinks “what can I buy”. I feel we should re-program athletes’ brains to understand that when a check comes in, the first matter of business is to stock some money away for retirement or some type of emergency fund. Second order of business is to pay their current bills. Third order is to spend some money and enjoy life. Logistically, this is not a difficult task to accomplish. Today’s athletes won’t thank you now for assisting with this process, but they will years from now.
Disclosures. The information contained herein is neither an offer to sell nor a solicitation of an offer to buy any security. Past performance is not a guarantee of future results. Further, the information herein is intended solely to provide general information and does not constitute a promotion of any offerings or products. Donald J. Kushner is an independent financial advisor with Arque Capital, Ltd., and does business as DK Sports Financial. Arque Capital, Ltd., and DK Sports Financial are unrelated entities. Securities offered through Arque Capital, Ltd. 7501 E. McCormick Parkway, Suite 111 North Court, Scottsdale, AZ 85258. (602) 971-9000. Member FINRA/SIPC. Any unauthorized reproduction of this information is strictly prohibited.