While professional athletes still may end up on a Wheaties box, or partner with and become the spokesperson for a brand, many of them are striking out on their own, forming their own companies.
Professional athletes already make unimaginable money for the average American, and when their salary is coupled with their endorsements, this can be hundreds of millions of dollars in some cases.
With all that money, it is no surprise that they want to spend it, sometimes quite frivolously.
Frivolous Spending
With so much money, some of these athletes do indulge in frivolous spending habits. With staggering amounts of money, these purchases, while extravagant to the common person, can be considered chump change to these athletes. For example, Mike Tyson spent $140,000 on 3 white tigers, and now must pay for their continual care and upkeep that totals over $140,000 per year.
While other athletes purchase car collections or trick out their personal vehicles for large amounts of cash, Chad Johnson tricked out his own semi-truck. There is also the occasional yacht or jet purchase, in addition to some mega-mansions.
A recurring purchase for many athletes are jewels. Chris Johnson spent money to bedeck his teeth in gold. This obsession with jewelry extended from their own jewels to money spent on their loved ones. Athletes shower their wives and girlfriends as well. For some athletes they purchase beautifully inspired classic vintage engagement rings, or stunning multi carat stoned rings. The rings on the wives of professional athletes are quite impressive
Entrepreneurs
For many athletes, frivolous spending is all that they know. And for some, this has led to financial hardship after the end of their careers. There are sometimes bankruptcy claims, despite making hundreds of millions of dollars throughout their careers. For other athletes, they have learned to maximize their public persona and propel themselves into other careers and investments opportunities.
According to Forbes, the top 50 highest paid athletes made close to $3 billion in the past year, and over a third of that wealth can be attributed to their “off-the-field endeavors.” For some athletes they choose to be angel investors, managing funds in the $100 million dollar range. For people like Lebron James, they start media companies. Others start businesses related to skincare, or invest in other companies. These investments help to capitalize on the athlete’s face recognition, and propel the brands they sponsor to higher earnings.
Unfortunately for Tom Brady, his investment in cryptocurrency FTX, which was recently found to be practicing fraudulent business practices, seems to be going belly-up. Not all investments pay-off, but for athletes this is often the exception, not the rule.
Conclusion
It is no surprise that athletes get paid large amounts of money. What is a surprise is learning about some of their extravagant spending habits. These spending habits can be difficult to maintain, especially if they get out of control. Furthermore, because athletes usually retire by the age of 30. Of course, there are great exceptions to that retirement age, but for many they need a retirement gameplan. If they do not learn proper money habits in their heyday, these habits can be difficult to break.
The age of the entrepreneurial athlete is propelling many stars beyond the field and court into a lifetime of security and even greater wealth. When athletes take fiscal responsibility, educate themselves, and hire professionals to help them with their investing, their ability to earn exponentially, and well beyond their peak athletic years, greatly improves.