4 High Scoring Money Tips From An NFL Receiver
Here’s a feel-good story from the NFL even bigger than the Atlanta Falcons’ surprising 2-0 start.
Earlier this summer, Ryan Broyles, now a free agent but last a wide receiver for the Detroit Lions, talked with ESPN about his money habits. By design, Broyles lives on $60,000 a year rather than the $600,000 he was scheduled to make in 2015. His ideas might sound crazy for a star athlete, but Ryan’s strategies are built around a bigger goal than his stats: he plans to keep on winning after he walks away from the game.
Here are four lessons from one smart jock:
1. Job Loss Happens So Plan For It
At the NFL Rookie Symposium, Ryan heard stories of the high percentage of former players who go bankrupt or get career-ending injuries. Broyles learned early on to be responsible with his money, but he then went from imagining how much he could buy on his high salary to how far he could stretch his possibly short-term bonanza. Since he had injuries early in his career, the idea of a possible end to the good times was already seared into his mindset.
He decided to try living on a modest budget, invest the majority for life after football and set up a reserve of 20% of his net worth in cash savings. Soon he was in a place that even an injury or prolonged free agency wouldn’t ruin the family’s long term finances.
Very few of us reach the heights of an NFL player, but we still can feel the pain of a job loss. That’s why it is so important to prioritize saving and prepare for when our income is less than our expenses. The general rule of thumb is save 20% for goals like retirement and emergencies.
2. Living Under Your Means Doesn’t Have To Hurt
He and his wife made plans early on to save the majority of his signing bonuses and salary and live on a fraction of what came in. Since he was already used to his pre-professional player lifestyle, he only had to overcome the expectations of others and not his own binge habits.
The Broyles’s eat out once a week, drive nice (but not extravagant) cars, use Apple AAPL -1.79% TV and Netflix NFLX -3.03% to avoid bloating cable bills, and pay off their credit cards every month. While they charge certain monthly expenses on a credit card, they pay off the card every month. This strategy saved thousands of dollars of interest and they used the credit card points to buy a new MacBook computer! They even used Groupon to take an amazing vacation to China in 2014. He credits his wife for finding deals and reinforcing their smart spending habits.
3. Get In The Game Sooner And Be Coachable
Broyles didn’t know a lot about investing, but he knew he needed to learn as much as he could before the NFL money train pulled away. He interviewed financial advisors early on and found a group that would help him learn as he got going. Broyles asked for coaching from his advisors since he was by nature ultra conservative and learned he’d need to make his money work harder to accomplish his saving goals. Once he got a better idea of investment risks vs. return possibilities, he got comfortable enough to accept more risk and invest more. Now Broyles has real estate and portfolio holdings along with his NFL player programs.
4. A Budget Is A Living Game Plan
Hardly any player likes studying films and pouring over a new offense, but the discipline of doing it along with a supportive wife helped Broyles handle the structure of a budget early on. Starting from a piece of paper like this, he eventually automated his budget at Mint.com. “I love it,” he says, and setting up as many bills as possible to get paid by bank transfer helped avoid late payments and hassles of remembering to mail out payments.
The Broyles’ allocate 50% of their budget to fixed expenses like the house, utility and car payments, 30% to variable expenses and 20% to saving. If you start early enough, you may not have to even save 20%, but the NFL career is a short one, and Broyles has his eyes wide open to that. Here are some more tips on starting a budget you can live and thrive under.
It’s easy to cheer for a guy who knows how to control himself, prepares to win, and makes your Sunday afternoons a little more fun. It’s even easier when a guy like that has even more than circus catches to share with us! Hopefully, they’ll lead to some wins for us too.
Source: Forbes