For professional athletes, both personal and financial success are easy to link to achievements on the field, but at Iron Point Financial, we would like to suggest that true wealth goes beyond short-lived high earnings and one-off performance bonuses.
Instead, we believe that truly effective wealth management for professional athletes requires careful, purposeful planning, in which your values are front-and-center, and where the throughline for your plan is the big-picture perspective of your life story.
That’s the primary focus of this article: how you can build a lasting legacy beyond the game you love. How you can write your own story, instead of the one handed down to you by a no-name journalist or sports commentator you’ve never met, by managing your wealth with integrity and intention, and by prioritizing long-term goals that transcend individual athletic accomplishments.
In the words of ‘Big’ George Foreman, “Sports are sports… It’s all about how we carry ourselves outside of the ring.” The man who was and is a boxing legend put his money where his mouth was by spending his life giving back and channeling his resources towards a youth center in Houston, which still bears his name. His life is a great example of the kind of legacy we want to talk about today.
Throughout the rest of this blog post, we will explore the main elements of wealth management for professional athletes, with an emphasis on purpose, values, and life-long impact.
Telling Your Own Story Through Wealth Management
No two human beings are identical — a fact that holds true for every professional MLB, NFL, NHL and NBA player. Even so, it’s easy to get caught up with what your teammates are doing, what the media expects of you, or what your own family and friends are urging you to focus on.
Throw in the fast-paced, high-stakes nature of professional team sports, and it should come as no surprise that you have so little time to think and make meaningful decisions, even in the off-season.
Despite that environment and those expectations, we believe that personalized wealth management for professional athletes could be the key to taking control of your unique story and legacy — a story in which you are the primary author and protagonist.
When you know how to make financial decisions based on your values and personal purpose, you can stop others from trying to tell your story for you. A tailored wealth management plan could empower you to shape it yourself.
Of course, you don’t have to come up with a wealth management plan on your own; that’s where a financial advisor who shares your values and is willing to listen to you comes in. An advisor like that can help you build a future and make an impact that reflects who you are at your core.
At Iron Point Financial, for example, all of our advisors take the time to listen to you and learn about what makes you tick — what you care about, and what direction you hope your life will go in. We do that so we can craft a financial plan that serves who you are as a unique human being, not just your bank account.
In Greg Liszka (CFP®, RICP®), President and Advisor at Iron Point’s words,
“We’re really going to customize something to you, and then we’re going to monitor it. Depending on the strategy we’re employing, it could be weekly, could be monthly. But we’re going to monitor it and make changes as conditions dictate.
So you’re hiring us to actively do a job, not sell you something. We don’t want to sell you anything. We want to help you fix problems.”
What exactly is VIA?
If all this talk of values sounds great, but you’re not exactly sure what we’re getting at, we would recommend checking out VIA Character Strengths, a free resource created out of a global, multi-million-person social research study out of UPenn. The resulting 24 values, or “strengths”, as VIA calls them, form a common language of values from people all around the world.
“VIA” stands for “Values In Action”, so it should come as no surprise that the resource could be a great starting point for thinking about life from a values-based perspective — for identifying what matters most to you and acting on it. And because it’s free, you can explore it at your leisure.
The Unique Challenges of Wealth Management for Professional Athletes
Professional athletes face specific financial challenges that call for specialized wealth management strategies. Bearing in mind everything from short career spans and tax complexities to managing personal relationships and planning for life after sports, it could be wise to take a comprehensive approach.
In the second section of the article, we will touch on the primary financial hurdles athletes encounter, and how values-based wealth management can help you start to work through them.
1. Managing Net Pay
Professional athletes in the US typically sign highly lucrative base contracts, even at the start of their career, but when they receive their first actual paycheck, they could be surprised by how different the numbers seem.
After taxes, agent fees, and other expenses like healthcare deductions and retirement contributions, your ‘net pay’ could look a lot smaller than what you signed up for. At this point, it could be a good idea to pause, take a breath, and manage expectations.
The first thing to do is to work out exactly what brought about the change in numbers and why. When you know where some parts of your salary are automatically going, you can better plan out the rest of your life. As they say, “Knowledge is power.”
That’s also where a conversation about managing cash flow and optimizing tax planning comes in — both of which are essential features of wealth management for professional athletes.
- Cash Flow and Tax Planning: At Iron Point Financial, we can help athletes create tailored tax strategies that maximize their net pay. We consider the unique aspects of your earnings, including signing bonuses and endorsements, to develop a plan that helps to minimizes your tax liabilities.
Our approach can help you to stay fully informed of your income, obligations, and opportunities, and make it easier to manage your finances responsibly and avoid potential surprises as your career develops.
2. Navigating Relationships and Financial Requests
Fame and fortune have a habit of imposing unwanted, uncomfortable additional pressures, especially from friends and family who may seek financial support. Of course, there’s nothing wrong with helping those you love, but we would suggest that good wealth management for professional athletes requires a slow, thoughtful approach, rather than high-pressure, knee-jerk commitments.
- Values-Based Decision-Making: Remember all the VIA stuff we talked about earlier? This is one important place that could come in. By identifying and clarifying your values before you have to make relational decisions of the kind we’re talking about here, you can set personal guidelines for financial giving in advance of the asks.
On top of that, our financial advisors at Iron Point Financial could work with you to establish healthy financial boundaries that respect both your long-term goals and your generosity, so that you can continue to make meaningful, sustainable contributions for the long-term.
3. Life After Sports: Building a Career Beyond Athletics
For many athletes, transitioning to life after sports is a huge milestone — one that could present enormous excitement or crippling uncertainty. Whether you’re curious about entrepreneurship, philanthropy, or starting a new career in a field you love, good wealth management for professional athletes now can provide a stable foundation for those pursuits later.
Take, for instance, George Foreman’s post-boxing success marketing the George Foreman Grill; that endorsement made him more in a single commercial deal than his entire boxing career earnings combined. And he didn’t just use all of the proceeds on himself, either; he directed it towards his family and his community, and indeed continues to do so today.
- Retirement and Entrepreneurial Planning: At Iron Point Financial, we believe in creating retirement plans that go beyond finances, helping athletes envision and prepare for the next chapter of their lives. We can assist with everything from business ventures and charitable projects to career development, to help ensure that your retirement plan supports your dreams.
We understand that many athletes are driven individuals who seek meaning beyond sports, which is why we make it a priority to help you set those aspirations in writing, and craft a plan that can help them come to life.
A Big-Picture Approach to Financial Literacy
Another way to tackle some of these issues head on is to increase your overall financial literacy — another cornerstone of lifelong wealth management for professional athletes.
Perhaps the easiest way to increase your personal financial literacy is to create and talk through a financial plan with your financial advisor. When you understand the key financial principles behind your plan, we believe you can approach your future in a more holistic, sustainable way.
In this third section, we will cover the four foundational elements of wealth management for athletes, emphasizing a values-driven approach throughout.
Cash Flow & Tax Planning: Stabilizing Your Income
We alluded to this topic earlier, in the subsection on ‘net pay’. Cash flow management is a major component of wealth management for professional athletes, especially when you take into account potential income variability, seasonal contracts, and limited endorsement time frames. Not everyone can be the next Lebron James, Tom Brady, Shohei Ohtani or Sidney Crosby.
As a result, monitoring your income and expenses through a solid budget is an important way to avoid spending beyond your means, maintain stability, and prioritize what is most important to you for the long-term. A budget can help to keep you aware and accountable for your spending decisions.
Tax planning goes hand-in-hand with cash flow management, and is likely to be equally important in your situation. Qualified tax professionals can help you create a tax strategy that considers:
- State and international tax obligations for athletes competing across jurisdictions.
- Tax-efficient investment strategies to grow your wealth.
- Special deductions and credits available to athletes.
Iron Point Financial’s trusted tax planning partners can help athletes optimize their earnings while staying true to their values, and can also help to ensure they have the support needed to reach their goals.
Portfolio Management: Building Wealth with Purpose
For professional athletes, portfolio diversification could be a great tool for protecting wealth and safeguarding long-term financial security. Traditional portfolio management balances stocks, bonds, and other investments, but at Iron Point Financial, we are able to add a values-based layer such that every investment reflects your goals and ethical principles.
By incorporating risk-managed investments and socially responsible funds, we could help you create a portfolio that aligns with your personal beliefs and risk tolerance. This approach can help you build a legacy that reflects who you are both on and off the field.
Risk Management: Protecting Your Wealth and Future
Sadly, athletes face unique risks, from short-term injuries to career-ending events, making risk management another critical part of wealth management for professional athletes.
Risk management for professional athletes includes:
- Disability insurance to protect against income loss due to injury.
- Term life insurance to safeguard financial support for loved ones.
- Asset protection strategies to safeguard your wealth.
Iron Point Financial’s risk management approach considers your individual risks and overall life goals and can help you to protect what you care about most while staying focused on the big picture story of your future.
Retirement Planning: Building a Legacy Beyond Sports
Let’s face it: for most players, the athletic professional timeline is short. The average NFL career is a mere 3.3 years, while another study found that the average baseball rookie can expect to play only 5.6 years in the MLB. It’s a similar story in the NHL and the NBA.
These stark figures make retirement planning another urgent part of wealth management for professional athletes: in this context, retirement planning isn’t just about financial security—it’s about creating a meaningful life beyond sports, possibly in the very near future.
At Iron Point Financial, we view retirement planning for professional athletes as an opportunity to support your legacy and future impact; in other words, to start writing the next chapter of your story today.
Our retirement planning offering includes:
- Goal-Driven Visioning: We can help you define what retirement means for you, whether that’s a new career, charitable work in your community, or entrepreneurship.
- Sustainable Income: We have strategies that could help you prioritize sustainable income streams to support your post-sports lifestyle.
- Values-Based Guidance: By taking the time to understand your unique goals, we can create a plan that reflects your legacy and empowers you to make a meaningful impact where it’s needed most.
Purpose, Integrity and the Iron Point Difference
Professional sport is all about goals: hitting your marks, making the shot, winning the game — or maybe even the championship. But once you’ve done your job — once you’ve achieved what you set out to — what are you left with?
The difference between goals and purpose is this: goals are temporary, while purpose is lifelong. Goals are all about succeeding in a moment or even a season, whereas purpose is an internal sense of direction and value that lasts. You might connect with your goals, or they might have been set for you; either way, they exist outside of you. Purpose comes from within.
So if, as George Foreman says, “It’s all about how we carry ourselves outside of the ring,” how exactly do you do that? How do you discover your purpose in life beyond sports? And, for the purposes of this article, how do you bring that purpose to bear when it comes to wealth management for professional athletes?
Well, to start, you could check out the Harvard Business Review’s reflective questions on finding your purpose, and then you could… start living! But not just any living: intentional and reflective living beyond the arena, with a notebook in hand, or the voice notes app on your phone ready to record.
Wrestling a sense of purpose from life isn’t easy, and it probably won’t come quick, but if you deliberately start writing down and recording what energizes you, excites you, or maybe even breaks your heart in the world around you, we believe you can get closer and closer each day, simply by paying attention and asking yourself the right questions.
Once you’ve got a clearer picture of your life purpose worked out, you can consider how it might affect your wealth management practice. After all, your finances and the way you direct them can be a great expression of your purpose and values.
And as far as implementation goes, Iron Point’s fiduciary advisors can always be on hand to help. As we’ve emphasized throughout this article, we don’t believe in cookie-cutter solutions; instead, we pride ourselves on personalized strategies that align with your unique values, dreams and challenges.
Reflective Purpose Questions:
- Outside of sports, what excites you most? What gets you up in the morning?
- And what gives you anxiety? What keeps you up at night?
- What makes you cry when you see it or think about it?
- In what moments or seasons were you happiest during your childhood? Why?
Building a Legacy with Iron Point Financial
Every professional athlete has the power to shape their own story, not just through their performances on the field, but through their choices and values off of it. Wealth management for professional athletes can be one great way to help you take control of that narrative, and to build a financial future that reflects the legacy you want to leave in your community.
So if you’re ready to start managing your wealth with purpose and a big-picture perspective, Iron Point Financial’s advisors are ready to work with you on a financial plan that aligns with your unique story and vision.
Contact Iron Point Financial today to start building a wealth management strategy that speaks to who you are—both on and off the court. Together, we can help you create a legacy of purpose, integrity, and lasting impact.
And if you enjoyed this article on wealth management for professional athletes, why not sign up for regular email updates, so you don’t miss future posts?
Iron Point Financial is here to empower you to secure a brighter tomorrow. We operate physical offices in Grove City, PA and Greenville, PA.
We primarily serve residents of Pennsylvania, Ohio, West Virginia and Florida but we also have registered broker licenses for 22 other states across the continental USA.
Related Resources
Disclosures
- A diversified portfolio does not assure a profit or protect against loss in a declining market.
- All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.
