10 RULES FOR THE ELITE ATHLETE
Professional sports are a collection of multi-billion dollar industries, and the search for new talent gets more intense and competitive every year. It’s not uncommon for scouts to begin watching promising athletes as early as middle school, and if you have elite talent you’ll soon find yourself with an ever-growing circle of “friends”. A few of these people may be genuinely interested in helping you develop and achieve your potential, but most are simply out to get money – your money.
The word “Pro” is short for professional, and you need to approach your athletic career as a professional enterprise. The moment you receive your first paycheck, you have created a business: “You Incorporated”. Just like any other business, you must manage it intelligently in order for it to grow and prosper. The following ten rules are collected from my experiences and the advice of my legal and business partners.
Following these rules will help you steer clear of the problems that derail careers, and give you fundamental principles for managing your success.
- Never sign anything you don’t understand. If the terms of a contract or other legal document aren’t clear, keep asking questions until you understand everything completely. Some people feel shy or silly about asking questions, or are afraid they won’t look smart if they do. I guarantee you’ll feel a lot worse if you sign a bad contract, so forget that kind of thinking and be sure before you sign.
- Always read every contract before you sign it. Never mind somebody who says “This is our standard agreement” or “Don’t worry, everybody signs this same deal”. Just because somebody else signed the deal doesn’t mean it’s a good deal for you. Make sure the agreement is consistent with your goals and values – if not, negotiate for changes until you’re comfortable with the terms.
- The three most dangerous words for an elite athlete: Power Of Attorney. This is a document that allows another person to legally become “you”. They can cash your checks, spend your money, and even borrow money in your name without you knowing about it. Someone may ask you to sign a power of attorney “Because then I can pay your bills for you, so you don’t need to spend time on that little stuff”. Huge mistake. There is no reason for you to give up control of your finances, and there is almost never a good reason to sign a power of attorney.
- Manage your people. If you’re a top-level high school or college athlete, you need to talk with your family to make sure they don’t jeopardize your eligibility to play by making illegal deals with agents, boosters, etc.. If you’re a pro, watch your friends and make it clear they need to stay out of trouble around you. Having an “entourage” may seem cool, until one of them gets busted for guns or drugs or stealing your money.
- Get professional help in managing your business affairs. The first two people you should hire are not a driver and masseuse – they should be your lawyer and accountant. And don’t hire “Uncle Larry’s cousin the attorney” either, find respected professionals who have successfully represented high-level clients for many years.
- Always pay your taxes. Countless athletes have ended up broke and in legal trouble for not paying their income taxes, and the IRS does not play nice. If you’ve made it to the pros and you’re getting those paychecks, get a professional tax accountant on board to prepare your income tax returns right away.
- Avoid business deals you can’t monitor yourself. The minute you start getting paid, people will start offering you all sorts of “investment opportunities” – most of which are just black holes that will make your money disappear. Forget about real estate deals in Costa Rica or starting a restaurant you’ll never actually eat in yourself. Unless you are familiar with the business and have time to keep track of it regularly, just leave your money in the bank until you find investments that make sense for you.
- Plan for your financial future. The average professional athlete’s career is less than three years. No matter how talented you are, you must realize that some day your playing career will come to an end – and it may happen sooner than you expect. If you spend all of the money you make while you’re playing, you’ll have to start over from scratch when your playing days are over. The first thing you should do with your money: open a retirement account and start saving.
- Don’t overspend. Fancy cars are fun, but they’re a huge waste of money. Everybody deserves a nice place to live, but if a house has more bathrooms than you could use in a week, you’re better off buying something more modest and keeping the rest of your cash. Think about your money before you spend it, then get what you need without getting crazy.
- Act like a business owner. Business owners who party every night, blow all their money, and forget what made then successful in the first place – they go out of business fast. Remember, you are the CEO of “You Incorporated”, and you should handle everything you do in a professional, businesslike manner. While other people are wasting time and money playing the “Big Baller” role, you’ll be increasing your success everyday.
Always keep in mind: nobody will care more about your career than you do. It’s your responsibility to manage your career well. If you stay focused on your goals and consistently work hard to achieve them, you will naturally find yourself standing above the crowd.
Special thanks to my very good friend, Greg Guedel, running and workout partner in Seattle Washington.