Life After Professional Sports
It’s not unusual to hear about professional athletes losing all the money they made playing their sport only a few years after they retire. Sometimes they spend all their money on expensive homes, cars, jewelry, and clothes.
Other retired pros lose it all as an entrepreneur. Many athletes start businesses after they leave their sport. Others invest in someone else’s business or charity.
They are often flush with cash, surrounded by friends, family and managers, and full of good intentions. Starting a business is part of the American Dream. They seem to have everything in place to make that dream a reality. They are “retired” but young enough to still have another profession, helping others and helping them.
They have a desire to create a successful business and make some money.
Many things can go well along the way—but even more can go wrong. There’s a reason so many businesses fail in their first few years: Lack of planning.
Professional athletes have worked hard physically to get to the top of their game. Once they become successful in their sport, they earn large sums of money. This does not automatically prepare them to become successful business owners.
Just as they need a written plan to open their business, they need a written plan to manage their (sudden) wealth.
Marques Ogden played for four NFL teams. At the height of his career he was worth $4 million. He became a real estate developer in 2008. He took courses offered by the NFL to help players after their sports career. He declared bankruptcy in 2013.
Antoine Walker played in the NBA. He made more than $108 million during his professional basketball career. Not only did he spend his new wealth on cars, jewelry and homes, he started a real estate firm. Just two years after retirement, he filed for bankruptcy in 2010.
Starting Off Right
The NFL has programs in place to help their athletes. Not only do they offer classes like those Ogden took for retiring players, they also offer a rookie symposium. This four-day session is designed to teach players how to handle many aspects of their new life. Experts and retired players share advice and give tips.
Hall of famer Aeneas Williams told one group, “Begin with the end in mind.” They are urged to think about setting a plan for their career. There will be many steps along the way where they can lose their footing. The same will happen when they leave the league.
These NFL players have been given help along the way. When they began their sports career and when they retired and started a business. They got advice, so what went wrong? Getting the right assistance can make all the difference.
Planning Is Imperative
Ogden did not plan long term for this business. A comprehensive wealth advisory firm can help business owners create written financial plans. Part of this process is to anticipate possible issues and to solve for the potential gaps in entrepreneurial endeavors.
Ogden didn’t blow his money on cars and houses. He started out with a background in finance. He launched his construction company in 2008. In 2012 he took on a huge project and lost $2 million in 90 days. He tried to save the business with his own savings. It was all over by 2013.
Opening a business is a lot more complicated than making sure you don’t blow your money while you build a career. It goes well beyond living within your means and not spending your paycheck on what might be considered frivolous trappings of fame.
Beginning a business is high risk and care needs to be taken in an overall wealth management plan. It’s important to recognize possible setbacks. It’s also vital to acknowledge when enough is enough and to protect and preserve levels of overall wealth for the longevity of a life-long plan.
Putting a Team Together
Create a written wealth management plan with a financial services team who can give you perspective on achieving your goals and preserving your wealth.
Sure taking risks is part of any overall plan, but keeping the long-term goal of overall preservation is key. Some business owners can go back to a previous profession, but a professional athlete is not going back to the NFL. For these entrepreneurs going backward is not an option.
Just as Williams hopes the rookies will keep their goal in mind of ending on a high note, business owners also need to think about the finish line. The team you put together can help determine your success as an entrepreneur. You’ve worked hard for that nest egg, now put it to work to help you build a future.