Financial planning questions every sports professional should ask

The rewards can be great, but the career could be short. Making plans to ensure your money lasts longer than your aching muscles is critical. Whether you’re early in your career, established and earning, or ready to step back from sport, we have financial professionals who can help you ask the right questions (including ex-sports pros themselves who understand the transition ahead).  

Do I have good financial habits?

You don’t become a professional sportsperson without paying meticulous attention to detail. Do you apply this level of discipline to your financial habits?

Here’s our key advice: 

1. Prioritise saving rather than saving only what you don’t spend. And 
2. Keep your spending well within your capabilities.  

It sounds simple, but in reality, it’s not. You could be very, very busy. You may not have much experience in managing money. And your interests might lie elsewhere. But by prioritising money matters now, you could transform your life and your family’s.  

Am I setting myself up to be financially secure for the long-term?

Your earnings and career progression can be unpredictable when you’re a sportsperson. You may find money comes suddenly and quickly. It could also stop abruptly.  

As a lifestyle, it’s mentally and emotionally demanding, not just physically taxing. Being financially fit for the long term is just as important as being physically fit for next week’s competition. Having a solid plan and not worrying over financial matters can only aid your performance.  

As with sports, it helps to have the right people in your team. Make sure you get access to trusted financial advice. Speak to reputable people and organisations, and don’t rely on changing-room hearsay. We can help lay the foundations for your financial and sporting pathways to support each other.  

Now I have money, am I making the most it?

If you’re making money from sport, you might have sacrificed a lot to get this far. You owe it to yourself to make the most of this money.

You may have reached a level of celebrity status. The upside could be that you get the best table in the restaurant. The downside could be that you’re targeted by people who charge high fees to sell you inappropriate products and give you poor-quality advice. Keep your radar on to avoid scams and get-rich-quick schemes.  

Another trap that sportspeople can fall into is taking on unnecessary debt. Your blossoming bank balance may mean you qualify for all kinds of credit, but this doesn’t necessarily make it a good idea. However, a home or property with a mortgage can be a sensible investment.  

What other positive actions can you take? We would recommend saving in a pension. This can be a great way to give your savings a tax-free boost and lock them away from temptation. Pensions are complex, particularly for those with unpredictable incomes, so you may want to ask for help.

You may not have the time or patience to consider all the savings, investment wrappers and tax-free allowances on offer. And maybe you’d rather leave choosing stocks and funds to someone else. We can help you find all those opportunities to stow and help grow your money and reduce your tax bills – all in a way the government encourages.  

Whatever you decide to do, as far as savings and investments are concerned, the sooner you start, the more time your money has to grow. With more time, you can benefit from the long-term ‘snowball’ effects of compound interest. It’s the same adage of marginal gains you would have applied to your sporting achievements.

Have I organised my international financial affairs?

An international career can make life more complicated. Ask for specialist advice if you’re earning in different countries and juggling multiple tax jurisdictions. We’re experienced in working with agents, UK or non-UK domicile situations, and international tax and treaties. This can be taxation, legal structuring, or as simple as ensuring foreign exchange rates are managed and the outcomes improved for you and your family.

Am I prepared for the money to stop?

Remind yourself regularly that high earnings from sport won’t last forever. Even long-term contracts may not be secure. You could be sold, injured or forced out.

Take care to avoid falling into a non-sustainable, high-spending lifestyle. Nurture a healthy respect for the value of money. For some people, volatile earnings can encourage them to indulge in higher and faster spending. Take a deep breath and keep your cool. Make affordable lifestyle choices and manage your own and your family’s expectations for future spending.

Have I planned for all kinds of future outcomes?

Not everything is going to go your way. The risk of injury applies to everyone, but even more so for sportspeople. Prepare for injury, ill health or death with a ‘rainy day’ fund and financial protection products.

If you’re a sports star, your wealth, location, and schedule could be public knowledge. You may wish to ramp up your security and take out appropriate insurance for your high-value items.

With the unknowns in a sporting career, you’ll need to be incredibly flexible in your financial planning and consider all kinds of scenarios. We can help you explore possible outcomes with our sophisticated cash flow planning software. You can tweak different factors and ask questions like ‘What would happen if I pick up an injury at a certain time?’ or ‘How long will my money last after I retire?’. This can give clarity over how much to save to maintain your desired lifestyle.  

Be ready to revise your financial plan every time your life changes. Pick up the phone to your adviser if you get married, divorced, have children, change your income or change your lifestyle. And review your plan at least once a year.

Will I be ready to enjoy life after sport?

Retirement can often come early to sportspeople. Many may feel anxiety over the transition to ‘normal life’. And many might worry about funding a long retirement. To continue spending at pre-retirement levels, you’ll need extensive financial resources. Some 40% of professional footballers go bankrupt post-retirement¹.  

Financial stress can spread to all areas of your life, taking its toll on your overall well-being and personal relationships. Start planning your life beyond sport as early as possible. Use travelling time to do some next-stage career planning. Investigate options for building knowledge, such as coaching or professional qualifications. Invest your money carefully and plan to make it last.

We can help you explore and put in place financial structures to bridge the gap between retirement and new employment. When you’re ready to put your feet up, you can plan for a happy retirement. We can help set up your finances for the future while you concentrate on your sporting career.

Sources

1. FT Adviser - How to advise professional sportspeople