What Advice Does the NBA Provide To Its Well-Paid Rookies?
I thought this article might appeal to those students who idolize the NBA and their stars. This interview with the NBA’s SVP of Player Development provides a behind the scenes look at the financial planning advice that the NBA provides their rookies. Ask your students what lessons they can take away from this interview (other than NBA players are very well paid!):
Here are a few nuggets:
- Importance of budgeting: “We know it’s critical to have a budget so one of the essential tips [we give] when the players join the league is to get a sense of their understanding of financial issues and how to manage money. What we find is that players just haven’t taken the time to develop a budget, know how to follow a budget and so we climb into that very, very seriously.”
- Use medium and long-term goals as motivator: “You can enjoy your wealth, but we’re saying spend in moderation. Be clear on what your future goals and outlook is. Where do you want to be 10 years from now? As you come into the league, it is important to have that conversation with yourself, with your planners, and hopefully with the league when you first come in.”
- Set savings targets: “What we do try to say is, with the revenue the players are earning, we want you to save 40% of that—we really do. Whether you invest or save that, that’s a very, very good percentage in terms of the revenue coming in and the dollars that they have.
For those students interested in what happens when athletes don’t manage their money well, there is always ESPN’s 30 for 30 production Broke, which chronicles the financial mishaps of professional athletes.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.