Investment Concerns for Professional Athletes
As a professional athlete, you are exposed to financial issues that are much different from those faced by the average investor. A professional athlete’s career is much shorter than the average investor. The major difference is that the peak earning years, of a professional athlete, are typically in their 20’s or 30’s, while the general public’s peak earning years occur later in life.
What complicates the financial issues facing professional athletes is the amount of peer pressure that they are exposed to to live a certain lifestyle or to have “family and friends” make financial decisions for them, even though they are probably not qualified to do so.
Consider the difference between an average individual vs. a professorial athlete:
The average individual:
Will have lifetime earnings between $1.5 million and $3 million.
Will work 35 to 45 years.
Will enjoy peak earnings during the five years just prior to retirement.
Will allow circumstances to determine his or her lifestyle.
The average professional athlete:
Will enjoy lifetime earnings between $5 million and $25 million.
Will work for 35 to 45 years; however, his or her career in professional sports will only last 6 to 10 years and will be over before he or she reaches age 40.
Will enjoy peak earnings before age 35. In fact, they will likely earn 70 percent to 90 percent of their lifetime earnings before age 35.
Will also allow circumstances to determine lifestyle (only to discover the lifestyle adopted as an athlete cannot be sustained once the professional sports career is over. The resulting “adjustments” are often dramatic and usually humbling).
Consequently, as a result of the above, it is important for athletes to invest in safe, conservative investments. However, the overwhelming nature of the investments presented to athletes are such things as tax shelters, limited partnerships or other illiquid investments that carry with them substantial risk and large commissions some of which may make their way back to the unscrupulous agent or manager. Importantly, one of the most responsible things that an athlete or agent can do, is to set up a proper financial plan to ensure the long term economic stability of the athlete.
If you are a professional athlete, agent or family member of an athlete and believe that inappropriate investments were fraudulently or negligently recommended to the athlete, immediate action must be taken to attempt to recoup these investment losses.
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.
At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.