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Players who are on the Super Bowl winners side this year will receive a bonus of $ 124,000 each – well above what the average American household makes in a year.
Yet even professional athletes whose paychecks have more zeros than some people could make in their careers can make money mistakes. This is where Brandon Copeland comes in.
Copeland, a linebacker for the New England Patriots, a team that has won the Vince Lombardi Trophy six times in the last 20 years, may not go to the Super Bowl this year – but he has plenty of off-field successes. One of them teaches others about money.
“Football has always been an opportunity to have access to more. It was a means to an end, “says Copeland, 29.” Whether it’s real estate, investing, financial education, or returning, it’s about maximizing the platform to help people. “
Copeland focuses on financial literacy because he noticed that other football players, despite all their wealth, often know little about money management. The lessons they can learn apply just as well to people on more normal incomes, according to Copeland.
It was for this reason that he began teaching a financial literacy seminar called Life 101 about two years ago at his alma mater, the University of Pennsylvania, and recently started the same course online. In fact, Copeland lives like a normal person with a side appearance – not your average soccer star. Despite making roughly $ 1 million a year on his current contract with the Patriots, he saves more than 90% of his salary and lives with his wife on just over $ 70,000 a year.
After seeing the financial mistakes some NFL players made, Brandon Copeland decided he wanted to help others with their money. The NFL veteran teaches a financial literacy class called “Life 101” at the University of Pennsylvania.
Much of Copeland’s advice comes from his personal experience at hedge funds and on Wall Street, where he practiced twice at investment bank UBS and worked as a data analyst at Weiss Multi-Strategy Advisers and as a real estate investor during the 2017 NFL off-season. He also brings in experts from specific areas such as his tax advisor to fill any gaps.
“It’s about sharing information in digestible ways that I’m familiar with when it comes to financial literacy and access to opportunity so that people feel empowered to take control of their own situations,” says Copeland, who himself a graduate of UPenns Wharton is school.
Great at sports, bad at money
Copeland’s contracts over the years have been worth more than many Americans make in their lifetime. But he says he has no problem living on just a little more than the median household income in the United States of about $ 69,000.
“It is difficult for some people to achieve this, but for us to do the things we have to do and live the life we want to live it costs us that. We budgeted that and brought that into play brought, ”says Copeland. “We’re not here to spend too much just to prove a point to people.”
Reed Crosson, financial advisor and executive director of the professional athletes division at the Ronald Blue Trust, says many professional athletes create lifestyles that they cannot sustain in the long run.
Reed Crosson, financial advisor to professional athletes, says many cannot sustain their lifestyles long term.
More than 15% of NFL players go bankrupt within 12 years of leaving the league. This is based on 2015 research by the National Bureau of Economic Research based on all players drafted by NFL teams from 1996 to 2003.
Crosson and Copeland say there are a few reasons for this amazing statistic: Most NFL players are very young, have little to no experience handling large sums of money, and have a relatively short window of time to find out. The average length of a career in the NFL is just 3.3 years, according to the NFL Players’ Association.
“It’s hard to say to a world-class young adult, ‘This is the most money you will ever make in your life. It’s the best there is, ”says Copeland. “So when you see this check coming in for the first time, it’s hard to worry about the fact that it might not come in the next week or two years.”
Most professional athletes make huge salaries at a very young age and need to adjust quickly, unlike average Americans, whose salaries rise over time and are typically highest when they retire.
Lauryn Williams, three-time Olympic gold medalist, Certified Financial Planner, and founder of Worth Winning, can relate to this. Williams said she put a lot of pressure to live a certain lifestyle when she competed in the mid-2000s.
Olympic athlete and CFP Lauryn Williams said she felt pressured to pose as a professional athlete.
“When I became a professional athlete, so many people told me I had to buy a house. People told me whatever you make is three times the cost of a house that you can afford. As a financial planner, I would say now that nothing could be further from the truth, but these were narratives that were circulating at the time, ”says Williams. “I bought too much house and later sold it.”
Williams says it’s really easy, as a professional athlete, to put yourself in the moment and not understand how to get help – or know what questions to ask in order to get help organizing your finances.
“You see the money come in overnight, but you don’t know that there is a very small window in which you will make that money. It’s incredibly important that athletes create a long-term plan because that money is very, very often short-term, ”Williams says.
4 Money Hours To Learn From An NFL Pro
Whether you’re an NFL player signing multi-million dollar contracts or an employee making a normal salary – and making a higher salary later in life than you did in your twenties – the basic building blocks of money management are same.
Budget, save, invest, create wealth.
Here are four hours of money from Copeland that anyone can incorporate into their life:
Make a budget
It’s no secret that many professional athletes make huge sums of money. But with all that money you have to be very careful with the budget – just like everyone else. Preparing for a strong future is one thing, but you also need to know exactly what you need to spend to live, says Williams.
Knowing how much money is coming in and how much is going has been important to Copeland his whole life. This way he has been able to save most of his NFL salary and still live a life that makes him happy.
And it’s something everyone should embrace, he says. If you are rethinking your budget or you don’t know where to start, there is a great deal of learning how to create a budget that is right for you.
“In my beginner year, I would sit down every Sunday or Monday and keep track of all the dollars I spent. I’ve been doing this for a while and I would see trends in certain areas where I was spending too much, ”says Copeland. “I did this for a couple of months just to practice. I’ve gotten used to understanding that my claws are important. “
Build up your savings
Like many other professional athletes, Copeland realizes that his paycheck can easily disappear any day. The same principle applies to everyone else: an unexpected event like a medical emergency or a layoff can drastically affect your income. This is why building and maintaining an easily accessible emergency fund is so important.
“Save, save, save,” says Crosson. “That’s the greatest.”
The amount you should use for emergency saving depends on your income, expenses, and financial goals. In general, most experts recommend a cost of living of around six months. But the more you can tweak it over time to suit your needs, the better your financial situation will be in the long run.
Understand how taxes work
Tax planning is crucial for NFL players who make millions annually, especially since they typically fall into the highest tax bracket.
“Let’s say an NFL player makes $ 2 million. Well, half of that goes to taxes and their agents, ”Crosson says, pointing to the importance of understanding the difference between net and gross income.
However, preparing for tax season is just as important for the average American who earns paychecks on a regular basis. With this year’s tax season just around the corner, now is a good time to start implementing smart strategies to minimize your tax burden, such as: B. Contribute to an individual retirement account or claim certain tax credits.
Plan an after-work life
For Copeland, financial security means more than just saving money. It’s also about learning to invest properly in the future. That means putting money aside in an emergency fund, creating a mix of sources of income, and pursuing a long-term strategy for retirement.
But he also recognizes that “at 19 or 20, it is difficult to start planning for retirement and the future”. It takes some trial and error to figure out your optimal long-term savings strategy. After all, creating a financial plan is never a one-time affair. It requires adjustments to accommodate changing priorities in your life.
“A good rule of thumb is that for every $ 40,000 or $ 50,000 in living expenses, it is about $ 1 million. This corresponds to an average return of 4-5% (every year). So if you’ve invested $ 1 million, you can withdraw $ 40,000 and not invest in the principal, “says Crosson of the sustainable withdrawal rate – the amount you can theoretically withdraw from your retirement without giving you the money goes out.
Copeland admits that his football career could end at any time, which is why he has set himself the goal of gaining experience in various professional fields and starting his own sideline. He suggests starting a sideline or two to create new streams of income and protect yourself in the event your main source of income disappears.
“There are some players like Brandon who do a really good job of not giving up on their dream of playing for the NFL,” says Crosson, “but still thinking about what they’re going to do when they’re done.” ”