For many sports fans, the life of a professional athlete seems like a comfortable one. The top stars spend many years in the spotlight earning good money playing the sport they love. But the reality is not always so clear-cut.
For many sportspeople, including rugby union players, most of their capital is earned during their 20s. And many only earn good money for a short period of time. Some retire early through injury and most see their careers dwindle once they reach their early-30s.
At that point, the players' priorities and goals change, and their day-to-day lives are transformed. What’s more, the money stops coming in, their capital starts to decline and they must find an alternative way of making a living. Some may turn to coaching, punditry or journalism, but there are only limited places in these fields. Many are left wondering what to do next.
In order to maintain focus, sporting or physical goals can be replaced with personal and financial goals. Planning for the future is a good way to keep a player busy in the immediate period after retirement when their days are no longer dominated by sport. But how should they invest their money? What are the options available?
Keeping the money in a bank is one option, but current interest rates offer little appeal. As Ireland and Leinster star Jamie Heaslip admitted: “What do I do? I can put it in a bank. But that’s probably not the place for it.”
Instead, Heaslip, and others like him, have looked to technology as a possible source of future income. The Leinster number 8 has already invested in tech start-ups including Kitman Labs, an injury prevention analysis company; and Pointy, an e-commerce venture. To fuel his interest further and gain insight into the world of technology, Heaslip even spent a period as an adult intern at Google in Dublin.
It is impossible to talk about tech investment without mentioning blockchain. Ever since the door was opened by Bitcoin in 2009; cryptocurrencies and other related technologies have been on the radar of tech investors.
Cryptocurrencies are now accepted by many retailers in exchange for products and services and there are many websites including specialist betting sportsbooks that only accept Bitcoins. These type of ventures are attractive to investors because of the huge global potential. And the blockchain technology that records and protects these types of transactions is of particular interest as it can be used across multiple platforms. In addition, there are many currency wallets, payments systems and related innovations that offer attractive investment opportunities.
After the global banking crisis, many people lost confidence in the traditional financial system and cryptocurrencies seemed to offer the perfect alternative: a decentralized digital currency that doesn’t rely on a central bank and can be used freely around the world. Initially, it was not clear if the system would take off but now, less than 10 years later, Bitcoins and other digital currencies have been embraced by many mainstream entities.
But it is not just technology and that offers investment opportunities. Some ex-professionals prefer more hands-on enterprises such as restaurants or bars. While such options may seem risky, the sector has enjoyed a recovery period in recent years with turnover increasing. Again, getting the right team on board for such projects is crucial.
Some players may look to buy equity or provide a loan to an existing business to provide a regular income. Others may choose to become venture capitalists and get behind a start-up company.
Investments of up to £1m in smaller businesses that are not publicly listed can benefit from tax relief as part of the government’s Enterprise Investment Scheme (EIS). Any losses on shares can be offset against personal income or capital and in some cases shares may also qualify for 100% Business Property Relief after two years’ ownership. Seed Enterprise Investment Schemes (SEIS) offer tax relief for investments of £100,000 a year to those backing start-ups and new enterprises.
Of course, with any investment there are risks attached and some investors may choose to spread their money across multiple schemes to reduce their exposure should one scheme or business fail. For those looking to put their money to work, there are plenty of experienced professional’s out there who can give advice based on the aspirations of each individual.
The big question for investors is which company to back. And for ex-sports stars, assessing an investment opportunity in a field they are not familiar with can be a daunting task. That’s where expert advisors can come in handy.
When Rugby players are in their prime, thinking about financial investments and future income is probably the last thing on their minds. Their weekly schedule can be gruelling and can leave little time for forward planning. However, it makes sense to start early and get the ball rolling. Heading into retirement with plans already in place is much more reassuring and relieves some of the anxiety and pressure that departure from a sporting career can bring.
Many sportspeople already have managers and accountants who can help to liaise with financial advisors. In fact, most sport management companies have their own financial team who can take care of a players affairs based on their personal needs.
There is no pressure for players to choose to invest their money. Some may choose to take on a more traditional job role or return to a previous occupation. Others may choose to return to education in order to pursue another career. For players making this transition of for those who are struggling to adapt, the Life After Rugby Programme may help.
Whatever path a player chooses, there are experts out there who can help put their life on the desired track. And in many cases, success on the field of play can be followed by success in the business world.