Avoid financial own goals

HAVE A PLAN: ADVICE FROM SPORTS PROS

Over-spending on your lifestyle and image cuts your ability to save; professional sportspeople have shorter careers than most.

In the late 1990s, Bafana Bafana striker Phil Masinga was a South African icon. He enjoyed an international career, including two years with Leeds in the English Premier League. But he had financial challenges very common to professional sports people and many South Africans.

Before moving to England he earned R4 500 a month at Sundowns. Then everything changed. “I was earning £12 000. It was a big thing … quite difficult to manage.”

Eugene Zwane of Orlando Pirates can relate. “As a young player, I made a lot of the mistakes young people make. You want the coolest things. People start noticing you so you want to be dressed in this brand, attract that kind of girl … But all of that puts financial pressure on you.”

Early temptations

Most people are tempted to spend once they see their first pay slip.

When Zwane [started] playing he spent all the money he earned, little as it was. “But towards the end of my playing career, having been to university and having learnt more about finances, I also started working and amassing my own portfolio of assets.”

The sooner you start saving, the longer your money has to work for you and the greater the rewards.

Bad ideas

When Masinga started earning good money, he attracted people keen to give him ideas on what to do with it.

“We had many hangers-on and advisors who had their own interests at heart. We were advised to invest in businesses and ventures as we often had capital. We were promised great returns that we sometimes never got to see.”

There’ll always be schemes falsely promising high returns and guaranteed success. Avoid them by understanding how money works, what’s realistic and what isn’t.

The sandwich

“When I started playing in England, and earning that salary, I wanted to make everyone happy,” Masinga recalled. “I thought I’ll be the one to change everyone’s lives. But it’s not like that.”

Many find themselves in the “sandwich generation”, supporting both their children and parents. It’s a responsibility that can’t be ignored but must be managed. A good financial advisor can help.

“A downfall for many soccer players is a lack of financial management skills. I had a good agent who was happy to make sure he got a good contract for me, but after that he left me and didn’t give me any coaching on what to do about my finances,” Masinga said.

Prepare for the unexpected

Masinga was forced into early retirement at 32 due to injury. Have a plan in place in case you’re disabled or fall chronically ill and are unable to work.

Retirement is coming

Professional footballers earn much more than the average South African, but have shorter careers.

However, footballers’ spending habits tend to reflect their high incomes and they don’t properly provide for the future.

“Often within six to 12 months of retirement they are already functionally bankrupt,” Zwane said.

The best remedy: get educated on how/ where to save and think long term versus instant gratification.