Why (some) footballers and lottery winners should rip up their cheques!
Being catapulted to stardom on a sports pitch, or via some lucky numbers on a ticket may not be all it’s cracked up to be…
Did you know that over 30% of lottery winners go bankrupt, and many more go back to living on the breadline after burning their cash on living the high life. They unfortunately don’t plan ahead and focus purely on the now, seeking instant gratification through the purchase of 6* holidays, fancy cars, and jewellery.
Many top professional footballers do exactly the same thing- earning up to £150,000 per week – excluding: bonuses, advertising and sponsorship deals! The likes of 22 year old Mario Balotelli buy the same super cars in 3 different colours, wardrobes of designer clothes, more bling than P Diddy, and live the life of a Prince. Many decide to employ one of their mates as their financial advisor, and if they do invest in anything it is typically a club or a restaurant so they can go there “for free” … but this inevitably goes bust due to mismanagement. To top it off, when their playing days are over, they fail to reassess their lifestyle and keep spending as if they were still on the same income…
Big names- George Best, Tony Adams (Arsenal and England), John Barnes (Liverpool & England), Paul Merson (Arsenal & England), Paul Gascoigne (Lazio & England), Keith Gillespie (Man U &
Ireland) and most recently Lee Hendrie (Aston Villa and England)… to name but a few have all declared bankruptcy. This list extends to all sports – tennis (Bjorn Borg), athletics (Marion Jones), even boxing’s Mike Tyson who managed to lose $400m…
These internationally acclaimed sports stars are no different to many of us however – they simply do not plan ahead for their futures, don’t know how to make their money work harder for them, or don’t understand the importance of investing. All too often we don’t think through what I call the “what if” scenario.
What if I can’t play football anymore? What if my job position/industry becomes redundant? What if I became ill? What if I died? What if I spend this month’s income and no more comes in next month? What
if my pension company goes bust? What if my company goes bust? What if, at the time of purchasing my pension annuity, I am given a disgraceful return? Ultimately – am I too focused on w
orking harder, not smarter? And am I sufficiently planning ahead for my financial future?
In the world of Lehman crashes, bank bailouts, redundancies, pension companies going bust and state pensions disintegrating – these “what if” questions are becoming very important.
There are many routes you can take to avoid having your financial future determined by factors which are ultimately out of your hands. Each one of these strategies however has the same fundamental concept. They all generate passive income. Instead of trading your time for money (employment or even self-employed) … you should invest some of your time and/or money into investing in something that generates you a monthly passive income for little or no work. Robert Kiyosaki, the most influential personal finance author of our time, says that the goal is for our passive income to overtake our active earned income, so that we can safeguard our financial future and we have the freedom to choose how we work and the lifestyle we want to lead.
Now, I discuss the options for creating passive income in another of my blogs and soon to be my first book, but each of these is a viable choice. Whatever vehicle you choose, as long as you choose one, you can avoid the problems of not planni
ng ahead for the unexpected!
In one sentence, the reason I chose property is because I scrolled down the “Rich List”, and I realised that nearly every single one of the top 500 wealthiest people on the planet, had either property as their primary or their secondary income generating strategy. The moral of the story is, I had to think very carefully about not having property as income stream!
If you are interested in the security and very handsome returns of large positive cashflow each month, as well as future long term capital growth, then you have two choices:
1) Educate yourself on the best way to invest. People quite happily spend up to £200,000 on private education, and another £40,000 on university, but won’t even contemplating investing 0.1% of that on training that would enable them to become financially free (where the income you have coming in passively exceeds all your costs of living).
2) The number one rule of business – leverage. Leverage the knowledge, time, experience, strategy, and skills of someone else to help do it for with/for you. Bill Gates amassed $67bn as a result of hiring the right people to do the right job for him- he didn’t do it by trying to work harder and harder himself. You simply cannot amass substantial wealth all by yo
urself. Think about whose knowledge you want to leverage. Does this person actively invest themselves? Do I like the business model this person has? Do they have a track record? Do I trust them?
Whichever option you choose – whether it be educating yourself or leveraging the time and experience of someone else, I really hope you make one of the choices. If you do, you will avoid the danger of ending up like the string of ex footballers, lottery winners and high earners who find normal life unpalatable after having lived the high life, and wishing that they had “torn up the tiby buying up whole streets in Manchester. Eventually the chant “We all live in a Robbie Fowler house” echoed around the terraces of Anfield. It is reported that towards the end of his career, he was making mocket” (Jack Whittaker, won $315m but went
But despite the myths, you really don’t need massive amounts of capital to invest in property and if you invest wisely, then you can make sure that you are in full control of your financial future, and ultimately that you can lead the lifestyle you want to!re each month from his substantial property portfolio than his footballing abilities!bankrupt a few years later) as they couldn’t forgive themselves for not planning for the future. Ex Liverpool and England footballer, Robbie Fowler, decided to buck the trend and take charge of his financial future
I wish you the best of luck on your journey!