Financial Advice for Pros
You have about 10 – 15 years to build up a solid financial situation for your life after pro.
Risks
- The agent is more interested in his income than to help you
- The agent is not familiar with the special situations and limits of a pro
- You are not spreading the investments
- You go for the highest risk
- You are making quick and emotional driven decisions
- Your plan does not consider the above comments
- You chose the wrong insurance – did not read/understand the details about payment restrictions
- You only have one advisor
- No or reduced employers’ liability
- Listening to unacquainted peers
- Low assets at the beginning
- Loans for consumer goods and articles of consumption
- Total interest and redemption rates & changes after determined period
Your plan should consider that
- A pro career can end unexpected
- Your income could be from high to zero during any time period
- That there might not be enough financial resources/assets built up to retire
- Some investments may end up in a total loss
- You probably need some kind of education to get a job after pro. Career after the career
- Compound interest
- You generate other independent income or assets
- You might have an identity crisis after your career
- You have a lot of free time, use it! Education during regeneration
- You set a monthly spending limit for yourself – the rest are savings
What you should do:
- Try to gain basic knowledge about financial planning
- Find the right agent/advisors
- Start preparing as early as possible, diversify, be aware that every transaction normally costs money
- Ensure you always have liquidity
- Have a return of capital (4% is good)
- The majority should be secure investments
- There is a correlation between Return of Capital – Security and Availability
- Calculate inflation, tax and maybe exchange rates
- Ensure you have the necessary job qualification at the end of your pro career. This enables you to use existing contacts with clubs and sponsors, which can result in a good job
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Know good doctors and physiotherapists if not provided by the club
- Supporting private relationships
- If you are young, short term contracts might be better
- Get to know the written and unwritten pro-business rules
- Use contracts with the FIBA BAT statement
What is necessary?
- Insurances - at a minimum health & nursing, unemployment, temporary and permanent total disability, retirement and liability. Accident insurance could be part of health & inability to work. Depending on the country, bills need to be paid either by you or by you and the club or only by the club
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- Insurance for your house/apartment, household, car, bike are also a must
- In many cases professionals need special insurance
- Travel health insurance
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“Wild card” for youth or young players before pro (health
care)
- Marriage settlement
- Patient order
- Investments with leverage effects (E.g. annuities financing / suspension of redemption / variable loan) consider a term life insurance if married/or with family
- Define your goals at the beginning – what do you want to reach?
- An experienced, certified, trustful, supporting agent with human competence and a large network outside of the sport.
- An experienced tax advisor, knowing the athletes situation and understands that you might work in different countries, different contracts (net/gross/currency…)
- An insurance broker, who you can trust
- An independent financial advisor (attention – kickbacks!) good: certified by DIN ISO 22222 and/or is a Certified Financial Planner (CFP)
- Education and certifications during your career
- Sport lawyer – best connected to your agent and knowledgeable about the FIBA BAT
- Your initiative to get informed and for execution
- Be ready to take responsibility of possible negative news
Other interesting subjects to think about:
Mental training, nutrition, rehabilitation options, being away from family & friends, off-season training, marketing, trainee opportunities, coaching youth