5 Keys to Financial Success

Being drafted and becoming a professional player is an exciting yet dramatic change for every athlete. You are suddenly dealing with significantly more money along with much higher expectations for spending.

There is a lot of uncertainty in an athletic career. History is full of examples of athletes who went broke soon after their professional career ends.

Therefore, you must understand that financial planning for athletes needs to start as soon as they are drafted.

1. Don’t allow your signing bonus to change your lifestyle.

Players drafted in the first five rounds will receive signing bonuses ranging from $500,000 to upwards of $10,000,000, but the majority of these players will not go directly to the major leagues. Less than half of all first-round picks play in the MLB more than 3 years. Only 65% of first round picks actually make it to the majors.*

2. Manage your spending – you’ll only get paid for six month of the year.

With a big signing bonus, it is tempting for young players to buy big ticket items and live an expensive lifestyle. But baseball players only get paid from April to September (excluding playoffs). A financial plan that includes budgeting can help keep players on track.

3. You will have to fund 50 years of retirement.

The average length of a MLB Career is only 5.6 years.** Thos who are injured will have even shorter careers. You must start to save early and invest carefully to make their money last throughout their lifetime.

4. You will be asked for money regularly – so plan ahead.

Players will be subject to aggressive solicitations from family, friends, and organizations. Unfortunately, approximately 75% of all athletes say they have been exploited by family members or friends for their wealth.*** To avoid significant stress and financial tension athletes should avoid significant donations until they have a plan.

5. Protect your assets from lawsuits.

High income and high net worth individuals are more likely to be subject to lawsuits. Players should consider strategies to protect their wealth.

It was not by chance that you have accomplished your dream of becoming a professional baseball player. You had a game plan and each day you worked hard at becoming the best. Your financial life is no different. Do you have a game plan for your financial success?

* Baseball America

** Roberts, Sam. “Just How Long Does the Average Baseball Career Last?” The New York Times

*** Torre, Pablo. “How (and Why) Athlete’s Go Broke” Sports Illustrated

The information set forth was obtained from sources believed to be reliable, but we do not guarantee its accuracy or completeness. Past Performance is no guarantee of future results.