Many footballers experience financial problems shortly after the end of their career. It’s all too easy to blame this on wrong investments or a lack of financial knowledge, however this is not always the case. Practice has taught us that the cause is often far less spectacular. In this article we look at some of the reasons why players can suffer from financial problems, and what can be done to prevent it.
Young footballers earn a lot of money and, as their wages grow, so do their outgoings. A top footballer’s salary is prone to sudden, and substantial, increases. A contract of £25,000 net a month can easily go up to £100,000 net a month following a transfer. Therefore, it’s difficult to see any financial difficulties arising. By spending and saving so much each month, a false feeling of security can be created, particularly if the player is able to save what they believe is adequate.
We often ask sporting professionals to stop to think about their life after their sporting career; how much money they will require to continue the lifestyle they are used to, when they want to retire, whether they want or need a career after football. To maintain their standard of living, they need to have built up far greater savings than they might think. For example, for a player to think that £1million is more than enough to spend £10,000 every month, for the rest of their life, would be a huge misconception. In reality, a footballer who turns 35 today and wants to spend £10,000 every month until the age of 85, will need around £6million in his account (assuming it is not invested and there is no inflation).
As a young sporting professional, it is often difficult to think about long term financial security. The newest cars in the club’s car park, the latest gadgets and the most exclusive holidays can create the impression that there is money to burn. Without being aware of it, the pattern of spending might adjust to the expectations of those around them and the level of spending could become normal and justified.
It can be very difficult to downsize a standard of living once a player becomes used to it, not only affecting the player, but people in their lives who have come to expect a certain standard. There is an easy way to prevent this, and we illustrate it to our clients like this…
During a playing career, earnings are high and, as we’ve seen, during that time large outgoings are built up, on things like houses, cars, clothes, jewellery, travel, social and a little extra that we can just call ‘stuff’.
We support our clients by helping them to understand how much money they will need when they stop playing football. This is something that is unique to them which we refer to as their ‘magic number’. By understanding how much is needed, it’s then much easier for our clients to make decisions on how much to spend during their football career, enabling them to still spend money on houses, cars, clothes, jewellery, travel, etc, and a lot more money spare to set aside to build towards their magic number.