The stories are everywhere: a young person from a poverty-stricken background becomes a sports phenomenon. The athlete suddenly makes millions in salary and endorsements. Cut to five years later and many of those same athletes are bankrupt. When you go from having nothing to making more per year than most people will make in a lifetime, how do you manage your money for the long-term?
Build Your Team
It is not always possible to know the right thing to do, particularly if you are suddenly faced with wealth that you’ve never had. One of the most important initial investments you can make is to surround yourself with financial professionals to help you navigate investments, budgeting and taxation.
While the effect of seemingly unlimited money to a young sports star is like a buffet to a starving person, it is critical to manage spending. Coaches have a responsibility to make players become financially responsible to themselves by saving 12-18 months’ worth of living expenses in an account that is easily accessed in the event of injury or other catastrophic change in their circumstances.
Having a good tax advisor is important to help minimize taxes and to help avoid overpaying. Take advantage of tax credits available and understand the impacts of signing bonuses in your home state. States with no income tax can be a huge advantage for high-income earners.
Contacting a financial advisor today to find out more about how they can help your wealth management.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.