The First Few Steps For Pro Athletes Growing Their Portfolio
It’s a shame how many pro athletes fail to save for the future. Some don’t always keep in mind that eventually their income will change. And unless you have prepared for that inevitable transition from the sport, at least as an athletic participant, then you won’t be ready for the change when that day comes. Over the years, I have learned that the simple act of saving is more about our ability to be disciplined with money rather than how intelligent we are — although intelligence does play a role to some degree. While most of us will never rise to the level of investor like Warren Buffett or Donald Bren, we can certainly put ourselves in position where we’re able to build a winning legacy and live with greater peace.
Start Saving Now
If you’re a homeowner then you’re already saving, as you pay down your mortgage. Part of what you pay each month goes towards building your equity position. It’s called forced savings. However, I wouldn’t recommend this to be the only way you save. Your equity position isn’t liquid. You either have to sell your home to get it or borrow from it which has to be paid back.
An additional approach would be to start putting money away monthly in a conservative financial instrument (be sure to seek the advice of a licensed financial advisor) such as a money market account. Now, there’s nothing exciting about money market accounts but the point of it is for you to begin saving money and letting it grow. Furthermore, if you ever need to tap that account it’ll be liquid.
Get Out of Debt
Consumer debt is what often times hold pro athletes back from building wealth. This is where you have to be aggressive first. Paying these debts off will automatically give you a pay raise. When we get rid of these obligations not only are we able to put more money aside to begin building our passive investment business faster but it’ll also bring you a greater amount of peace long-term.
Pick An Option You Don’t Have to Manage Too Closely
The key to building a strong passive investment business is selecting a strong management team. If your first investment is going to be a rental home then you could decide to manage it yourself and “save” the management fee. But then it wouldn’t be a passive investment as that home will certainly require your time. However, if you see that fee as an investment in your time so you can focus on your craft and seeking new properties to buy then that management fee is totally worth it!
There are additional investment options you can start with that will make your life less complicated. Perhaps an IRA (Individual Retirement Account) may be appropriate. Be sure to seek the advice of a licensed financial advisor to give you the proper guidance. Just like if you were purchasing rental properties and you were looking for a good management team the same rules apply here. You want to learn about the organization that will be managing the account on your behalf.
In Conclusion
Ultimately, if you’re going to begin building a successful passive investment business then you’re going to need to take a disciplined approach towards money and get good management teams in place. The earlier you start the better. Keep things simple. Start saving now. Get out of debt and then pick an investment strategy that is easy for you to understand. As time goes on you’ll develop more savvy and your tolerance for risk will grow. Time to build that investment business.