5 Financial Mistakes Athletes Make (and How to Avoid Them)

5 Financial Mistakes Athletes Make (and How to Avoid Them)

A professional athlete’s earning window is short — often just a few years — but the income during that time can be massive. Unfortunately, many athletes face financial troubles shortly after retirement. Here are five common financial mistakes athletes make and how to avoid them:

Living Like Their Career Will Last Forever

Athletes often earn millions in a short period, but those earnings can end quickly due to injury, performance decline, or contract non-renewal. Many assume the money will continue to flow and inflate their lifestyle accordingly.

How to Avoid It:

Create a financial plan based on how long your career might last, not just your current salary. Live below your means and prioritize long-term security over short-term luxury.

Trusting the Wrong People

Too often, athletes hand over financial control to friends or unqualified advisors without doing proper due diligence. This opens the door to mismanagement or even fraud.

How to Avoid It:

Hire a credentialed, experienced wealth manager or financial advisor who understands your unique needs, and verify their track record. Remember, loyalty doesn’t always equal financial expertise.

Not Planning for Retirement

Athletes tend to think about retirement after it’s too late. By then, savings may not support the lifestyle they’ve grown used to.

How to Avoid It:

Start investing early. Allocate part of each paycheck to retirement accounts and diversified investments. Consider life after sports during your prime, not after it.

Making Risky Business Investments

Many athletes pour money into restaurants, clothing lines, or ventures pitched by friends without understanding the risks.

How to Avoid It:

Only invest in businesses you’ve researched thoroughly and understand. Surround yourself with a team that will give you honest feedback, not just hype.

Ignoring Taxes

Signing a multi-million-dollar contract doesn’t mean you pocket all of it. Athletes often overlook state taxes, agent fees, and other deductions, leading to unpleasant surprises.

How to Avoid It:

Work with a CPA familiar with athlete compensation structures. Understand your tax obligations before you spend.

Final Thought

Athletes have a rare opportunity to build generational wealth — but only with the right financial game plan. Avoiding these five pitfalls could mean the difference between a lasting legacy and a short-lived fortune.