The Biggest Reasons Professional Athletes Go Broke

If you’re one of the very select, talented, and lucky people to rise above the competition and become a professional athlete, congratulations! You’ve achieved what many people dream of, but very few can achieve. Unfortunately, many professional athletes make poor financial decisions that can haunt them long after their time in the field is over. Here are some of the reasons that wealth management for professional athletes is essential.

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They Think They’ll Be Able to Play Forever

With modern sports training and medicine, many athletes assume they’ll be able to play well into their 40’s. While this is true for an elite few, the average career for professional athletes in major sports is only between five and ten years. Because of this, the window for peak earning potential is short, and young competitors need to acquire wealth management for professional athletes as early as possible.

They Spend Money Unwisely

This is, unfortunately, the most obvious trapping of the sudden influx of cash that professional athletes receive upon signing. Whether it’s a lavish home, luxury automobile, extravagant nightlife, or ill-advised loans to friends, bad spending habits have been the undoing of many sports stars without wealth management for professional athletes.

They Aren’t Accounting for Taxes

U.S. tax laws are complicated for even the average citizen. For a professional athlete who has suddenly come into a large sum of money, with managers and agents on their payroll, the system is even trickier. Ignorance is no excuse for the law, however, and many athletes face a large, unexpected tax bill without the liquid cash left to pay it.

They Aren’t Investing

Finally, many athletes aren’t thinking about the long-term and making practical investments. If they do, they may find themselves generating a passive income that can keep them afloat post-career. If they don’t, they may have difficulty maintaining their lifestyle once their playing days are over.