As a Pro Athlete, What Type of Financial Structure Do You Have in Place?Submitted by on November 12th, 2015
The 2015-2016 NHL season has kicked off with a bang with Carey Price and the Montreal Canadiens off to a 5-0 start! Personally though, I think this is the year of the rookie - you have Connor McDavid, Jack Eichele and many others entering the league with fresh legs and tremendous talent bringing excitement not only for them and their families but fans alike. This season marks new beginnings for veteran stars like Jason Spezza and Patrick Sharpe in Dallas and Phil Kessel playing alongside Sidney Crosby! It’s certainly exciting times for fans!
While the new and familiar faces of the NHL are getting settled into the new season, there are more selfish considerations for many professional athletes – looking after themselves to ensure success both on and off the ice.
Coming into a considerable amount of wealth at a young age brings with it many challenges, including the temptation to spend - that Porsche 911, a big house or a fancy condo in a trendy part of town - it’s all so tempting! However, as with many other sports, the average career span of a professional hockey player is short so it’s important to have a plan in place for the long term.
Not all jobs are created equal – corporate executives, professionals, those employed in the entertainment industry and athletes have occupations that come with unique risks. These risks can affect their ability to perform their duties or fulfill a contract. You’ll encounter many speed bumps and roadblocks along the way - so much can happen from Point A to Point B, C, D and so on. It’s not a race; it’s a marathon and planning for our life marathon requires training. I’ll cease with the metaphors now and cut to the chase. How do you plan for and mitigate these risks?
First and foremost, we should begin with a savings plan - seems simple enough right? The problem is maintaining good saving habits on an ongoing basis - consistency is of utmost importance. Hire a qualified advisor that will build a portfolio designed to produce a reasonable rate of return that is low in volatility. Working with sound money management and thoughtful consumer choices on purchases will allow individuals to start building wealth over time.
Meanwhile, as the wealth grows, you should protect your ability to earn an income doing what you love. Life and Disability Insurance is critical to those in this type of profession. It’s not the most exciting subject for many, but an insurance advisor will get quite excited and long winded once you get them talking! It’s because we are passionate about the wellbeing of our clients. When we offer our professional advice, we ensure clients understand the insurance products that are available to them and how they affect the big picture and the position they take in the overall planning process.
The end goal for us is to assist you in accumulating sufficient savings during your career so that when retirement approaches, you are generating enough income from investable assets and/or insurance planning to maintain your standard of living.
If you're a professional athlete and would like to learn more about long-term financial planning, contact me at 604 484 4992 or firstname.lastname@example.org.
Ryan Wing, Client Executive, Vice President
This article was published on the CKM Sports Management blog at ckmsports.com/2015/11/as-a-pro-what-type-of-financial-structure-do-you-have-in-place/.