I’m always amazed when I hear athletes say that they are not interested in “doing any financial planning.” Athletes to some degree are no different than the average investor in that they want to jump right into the investments and forgo the financial planning process. I do understand why. I don’t agree, but I do understand. It’s human nature to want to jump right into the things that present the possibility of instant gratification. The only problem with this mentality is that more often than not, it leads to financial ruin if done with no plan of action or financial plan. Let’s take a look at a few different situations that operate under the umbrella of a well-constructed plan.
If we take the time to lift up the hood of any successful business, we will see a well-oiled machine that began with a prudent plan of action. What are the short-term goals of this company? What are the long-term goals of this company? What will they do if their plan runs into a stumbling block along the way? Is there a backup plan to enable this business to continue in the face of unexpected adversity? Before any successful business opens its doors, I can assure you a well-thought-out, prudent business plan had been constructed. More often than not, the businesses that fail do so due to the lack of a concrete business model. Either a poorly executed business model was prepared, or more likely, they just wing it.
Unfortunately, too many individuals in today’s world treat their finances in the very same manner – they either attempt to construct a financial plan with no professional help or just wing it – and it’s no surprise we see the financial hardships that are far too prevalent in today’s society.
Take a look at your home or the building where you work. These buildings were constructed from a blueprint. These blueprints were drawn up after many hours of well-thought-out ideas that were discussed between the builder and the owner of the home or office building. Without these blueprints, one of a few scenarios would occur: either the rooms would be the wrong size, the electrical system would fail causing a fire in the building, or worse yet, the building might collapse. The bottom line is that without a blueprint, construction would be impossible.
Finally, when a professional athlete sets foot on the court, field or ice, they do so with a plan of action – a game plan. Countless hours go into these game plans by the managers, coaches, and assistant coaches. It would be virtually impossible for a Major League pitcher to compete at the level they are expected to without knowing what a particular batter’s tendencies are and formulating a game plan to prepare for those tendencies. An NBA team could never compete without playing into its player’s strengths and its opponent’s weaknesses and employing a prudent game plan. The same holds true for any professional athlete in any sport you can think of. To give any athlete their best opportunity for success, planning is paramount.
Many times a team will prepare and still lose, but the fact that they are able to compete at that level means that the necessary time and effort in creating a game plan was present each and every time they set foot on the field, court or ice. If athletes understand what it takes to succeed on the field, then why would they attempt to succeed with their finances without formulating a solid game plan?
So we need to ask ourselves the question – If we know that successful businesses run on solid business plans, professional athletes play under a well-thought-out game plan, and buildings are constructed only after a blueprint has been created, then why on earth would an athlete ever attempt to manage their finances without first employing a well-constructed, well-thought-out, and prudent financial plan prior to investing one dime of their hard-earned money? “An ounce of prevention is worth a pound of cure” is one of my favorite sayings that you will find me using time and time again with investors I come across. This concept could not be more meaningful especially in the world of personal finance. Far too many financial hardships might have been avoided if only that “Ounce of Prevention” concept would have been embraced.
In summary, I would like any elite athlete reading this to take the time to sit down with a CFP® practitioner and construct a financial plan that will allow you to live your life with the safety, freedom, and confidence you deserve. You’ve worked far too hard to leave your personal finances to chance.
I wish you success in your financial endeavors!
Published 01-01-2013 © 2020 Access Athletes, LLCKeywords: Finance, Financial Planning