The Financial Realities of Pro Athletes: A Look into Their Paths to Financial Security

Beginning her training as early as 6 a.m., Olympic medalist Anita Alvarez practices intricate movements in the pool, testing her stamina and ability to hold her breath for lengthy periods.

While her dedication earned her a silver medal in artistic swimming last summer in Los Angeles, it didn't cover her living expenses.

In the preceding years of her 12-year sports career, Alvarez had to work at a sports store to supplement the minimal $250 stipend she received from Team USA each month.

Now, Alvarez receives $1,900 per month and has decided to forego side jobs for a different path: joining the US Air Force's World Class Athlete Program, which pays for athlete training in return for military service later.

Athletic Myth vs. Reality

The term 'professional athlete' often conjures up images of wealth and fame, yet these privileges are generally only accessible to top male athletes in leagues like the MLB, NBA, NFL, and NHL.

Many athletes, even those within top leagues, face significant financial hardships. Sports careers tend to be short, and athletes might lack the knowledge required to manage substantial earnings.

"Balancing intense training with financial worries is exhausting," Alvarez admits. "After lengthy swim workouts, rushing to another job was draining both physically and mentally."

Four current and former athletes shared their strategies for managing these challenges, emphasizing financial education, investment, and entrepreneurship.

The Brief Earnings Period for Athletes

Research in 2020 indicated that peak performance careers last about 4.9 years for solo athletes and 7 years for those in team sports.

"The NFL career is notoriously brief," explained Sheldon Day, a Washington Commanders player heading into his ninth season. "Many don’t realize how quickly the money can vanish."

A 2022 report highlighted that NFL careers typically last just over three years.

For athletes like Alvarez, earning periods may last longer, but sponsorships are scarce post-major events like the Olympics.

Athlete Dual Roles and Future Planning

In a survey, 74% of 500 female athletes confirmed they had additional jobs alongside their sports careers last year to make ends meet.

Securing a Future Beyond Sports

Angela Ruggiero, a former ice hockey player and multiple Olympic medalist, realized early on that her earnings from sports wouldn’t suffice for long-term financial stability, especially post-retirement.

Despite achieving Olympic success and endorsements from major brands, she found savings elusive.

Her strategy included investing portions of her income. When Coca-Cola didn't grant her equity, she invested her earnings in its stocks. Likewise, ex-NBA player Baron Davis, who had invested early in Vitaminwater, sought roles within its marketing team to gain business insights.

Davis then ventured into business with Baron Davis Enterprises, channeling investments into various sectors, showcasing how athletes can pivot to entrepreneurship.

Ruggiero transitioned into a business leader by co-founding Sports Innovation Lab, harnessing her sports and academic background to enhance fan and brand experiences through data.

However, transitioning can be challenging as athletes face expectations to prove their capabilities beyond their sports origins.

Guiding Upcoming Athletes

Athletes like Day have taken active roles in mentoring younger athletes on financial health.

After observing financial missteps by peers, Day, along with others, established The Players Company to offer financial education programs and help athletes engage in real estate investments.

Through partnerships, they aim to equip players with the knowledge to invest wisely, including opportunities in real estate.

To navigate their financial paths effectively, athletes must understand not just earning but also saving for future purposes.

According to Andrea Brimmer of Ally Financial, money should be viewed as a means to empower one's passions and loved ones.

Ruggiero emphasizes the need for financial education while in sports, advocating for courses that teach money management skills essential for life beyond sports.