When was the last time a professional athlete bragged about how much money they saved on car insurance on social media?
It’s probably never because it’s not sexy; instead, what you do hear about are the latest sports car purchase, the five bottles of $1,400 Cristal Champagne recently downed at dinner, or some other ridiculous purchase to brag about to the world.
In the world of football, it’s no wonder 78 percent of NFL players either go bankrupt or experience financial stress within two years of retirement.
Check out some of the more insane purchases made by athletes:
- Darnell Dockett – Baby Alligator.
- Arian Foster – $70,000 In Segways for Teammates.
- Mike Tyson – Pet White Tigers ($140,000 Per Year To Maintain).
- Michael Vick – $85,000 Fish Pond.
- Mike Tyson (Again) – $2,000,000 Bathtub For Ex-Wife Robin Givens.
On the flip side, some athletes take a more reasoned approach to their finances. For these athletes, the driving force behind their smart approach to money is acknowledging that they won’t be playing their respective sports forever. At some point, the money will run out, and they’ll have to find other sources of income to sustain their lifestyles.
For instance, New Orleans Saints safety Malcolm Jenkins has made over $70 million from football. His grandpa instilled in him at an early age to be frugal and taught him the mentality to ‘buy everything in cash.’
You won’t see Jenkins going to social media any time soon to brag about how much he didn’t pay in credit card interest last month. It’s not exciting, but it’s something other athletes should pay attention to.
Saving and saving money is crucial in order to take that next step in breaking away from your day jobs. That’s because frugality frees up capital that can be invested to build instead of destroying wealth.
Here’s what Malcolm Jenkins had to say about saving:
“I’m usually a frugal person. I don’t blow my money too much. I’m probably more of a saver.”
And what does Malcolm do with his savings? He’s focused on financial security out of his money.
“I’m more interested in how to create stability for not only me but my children.”
Malcolm is not alone in his attitude towards money. Instead of picking up toys during his career Byron Jones of the Miami Dolphins was more interested in picking up smart financial habits.
In March 2020, Jones signed a five-year, $82 million contract, making him the highest-paid cornerback in the NFL. You won’t see Jones’ latest purchases on his Twitter account. Instead, what you’re more likely to see is advice – financial advice – especially for incoming rookies. Jenkins believes that education is key, and the sooner a rookie can pick up smart money habits, the better their long-term chances at financial stability.
What kind of advice does Jones offer to rookies?
DO NOT SPEND YOUR MONEY. After taxes, fees, and agent commissions, you won’t have as much money as you think, and because your playing careers can end any time, it’s wise to have a backup.
DO NOT LIVE A LAVISH LIFESTYLE. There will be plenty of time to live comfortably after your careers are over. In the meantime, refrain from buying every relative a new car.
PLAN AND THINK LONG-TERM. Come up with a plan for creating a long-term comfortable living for you and your family. Think of the power of compounding when considering investment options.
RELY ON EXPERTS. Don’t be afraid to leverage trusted experts with financial and investing advice. Be very afraid of inexperienced advisors. Just because they’re friends of the family doesn’t mean they know what they’re doing.
There is much wisdom offered by NFL players like Malcolm Jenkins and Byron Jones. At the heart of their messages – which can be applied by anyone – for achieving financial stability and independence is to save money and use that money to make more money. To have your money work for you, think long-term. Don’t chase every latest flash in the pan.
Adopting smart money habits and adopting them early are crucial financial independence. Once you stop trying to impress your friends and neighbors, your priorities will shift away from assets that only offer short-term, fleeting pleasure towards assets that build long-term wealth instead of chipping it away.
Here is a summary of the best smart money habits worth adopting:
- Stop working for your money. Make it work for you.
- Create multiple streams of passive income to shelter you in a downturn. The more streams of passive income you have, the less likely you’ll go broke in a recession.
- Avoid wealth-killing consumer debt.
- Spend less than you make.
- Seek productive assets – not destructive ones.
- Take emotion, noise, and chatter out of your investment decisions.
- Don’t follow the crowds.
- Leverage trusted experts.
- Invest in education to further your investing and financial acumen.
Frugality isn’t sexy, but it’s vital to building long-term wealth.