Life beyond the limelight: a financial guide for athletes and entertainers

Unlike your average Joe, some athletes and entertainers start their journey to success earlier. It’s not uncommon for them to secure lucrative sponsorship deals, land roles on TV shows, or get drafted by pro sports teams with big signing bonuses — all in their early 20s.

While friends might be living a normal 20-something life, subsisting on ramen noodles to make next month’s rent, these young prodigies are amassing enough cash to live large. Extra large even. But honestly, this is a cautionary tale. Because throwing around money like a big shot early in your career can come back to bite you later on.

You've heard the stories. MVPs, world champs, gold medalists. They were living their best lives, raking in stacks of cash, but they never made a financial game plan and eventually ended up bankrupt. In some cases hundreds of millions of dollars were gone in a matter of years. That might sound impossible, but it's easy to get caught up in the hype of the high life. Sports cars, massive cribs, designer threads, an entourage, bottle service. Young superstars can feel like they're paying for things with monopoly money, when in fact their money is very precious, because their window for earnings is very narrow.

Think about it. The average NBA career can be just under 5 years. For the NFL, it’s just over 3 years.¹ And most actors and musicians peak in their 30s.² By the time the pros make all the money for their career, normal people their age still have a long career ahead of them. They’ll be making their peak earnings when their old and wise, long after athlete and entertainers have already earned their money. That’s why you need to secure it early. For the long haul.

When athletes and entertainers are just breaking into the Big Time, retirement can be the last thing on their mind. And retirement planning? Well look, no one would call it a thrilling process. But imagine being able to kick back in your golden years without worrying about your finances. That's a pretty sweet idea — and it can be within your reach if you start retirement planning now.

That’s something unique to the athlete and entertainment industry. Unlike other folks who can wait a bit to start planning, athletes and entertainers must figure out their next steps before their career even hits its peak. Maybe it's working with a financial advisor to set aside a portion of their earnings each year into a retirement account. Or investing in quality business ventures that can help them generate income after their career. Or laying the groundwork for a second career in a related field.

Overall, there are so many different ways to make waves outside your primary profession. They key is to start early so that even when your “glory days” are behind you, you can still be in your financial prime.

Celebs live life in the spotlight. It’s got its perks obviously. But it also makes them a prime target for all kinds of sketchy business deals and shady investment opportunities. Because people know they have cash to spend.

For example, it might be tempting for them to throw their money at a new business their buddy's cousin is pitching. But it’s probably not worth the risk. And honestly, do they even have the time to make sure everything is legit? Not likely. That’s why so many young celebs these days hire financial advisors. Because they can help spot the red flags and steer clear of questionable investments.

Financial advisors can also help you plan for the future, build a retirement plan, and manage your investments. If you’re considering business ventures after your career, they can offer advice on investment strategies and financial management to help you achieve your goals.

Rising stars often master the art of juggling multiple ventures. It’s just part of the hustle. In today's world, many A-listers can be seen dabbling in second, third, and even fourth careers. In fact, some of the world’s most decorated athletes are also running their own activewear companies, wellness brands, and even restaurant franchises. Award-winning actors and musicians have founded fashion brands, media corporations, and production studios. The point is: seasoned celebs know that they can't rely on their current success to carry them through the rest of their lives. Neither should you.

So, what's their secret? It's simple: planning and preparation. They didn't wait until retirement to figure out their next moves. They started developing new skills, tapping into their network, and pursuing their passions while they were still in their prime. From sports broadcasting, coaching, and personal training, to talent management and entrepreneurship — the avenues open to you are endless. It’s up to you to ask yourself: What industry am I passionate about? Who do I know in that industry? What skills do I need to develop to be successful?

In the world of sports and entertainment, the spotlight can be fleeting, but your financial stability doesn't have to be. As the curtains close on your career, make sure you're walking off stage into a future that's secure, stable, and rewarding. With careful planning, sound advice, and wise decisions, your star can continue to shine brightly, long after you've taken your final bow. Because in the end, it's not just about making the money, it's about making the money last.

CRC# 3751064 10/2024