SAVING MONEY IS BETTER THAN MAKING MONEY
You heard that right. If you want to enjoy financial stability and, dare we say comfort, your job isn’t done once you deposit that check. Of course, you have to make money before you can save it. At the end of the day, you are only worth what you have (not what you had).
A FOOTBALL STORY
Remember Warren Sapp? He is a former defensive tackle for the Tampa Bay Buccaneers. His football career culminated in a reported $40 million dollars earned and an induction into the Football Hall of Fame. What’s more, he was offered a job as an analyst with the NFL network earning over a $100k a year.
In 2012 Sapp filed for bankruptcy, owing $6.7 million dollars to creditors and in back payment of child support and alimony. He had to auction off his assets and, at the end of the day had a measly $826.04 in his bank account. Certainly not what you’d expect from a football player with his success.
Sapp is not the only one: in 2009 Sports Illustrated published an article reporting that 78% of former NFL players have gone bankrupt or are under significant financial stress within 2 years of retirement. More recently, the National Bureau of Economic Research (NBER) concluded that 15.7% of NFL players have filed for bankruptcy within 12 years of retirement.
GETTING RICH VS. STAYING RICH
You might be tempted to look at your own spending habits and conclude that this is clearly a problem endemic to the NFL (or pro-athletes in general). Their lifestyles are lavish and their careers can sometimes go by in a flash. Nonetheless, your Everyday Joe is not immune to this phenomenon.
The Certified Financial Planner Board of Standards reports that nearly a third of lottery winners will file for bankruptcy, ironically leaving them worse off than before they won. As a result of winning, so many of them overspend and overshare, not realizing how easy it can be to squander even $1 million.
Luckily, this phenomenon has not gone unnoticed. There are numerous financial advisers who specialize in working with pro-athletes on how to invest and save their money for future prosperity. As for the lottery winners, Fortune magazine (among others) urges winners to speak to a financial adviser before even telling their own parents about their good news. These advisers help the winners understand how to grow their money instead of waste it.
WHAT THIS MEANS FOR YOU
This is all well and good for athletes and lottery winners, but what does it have to do with you? It means that getting money doesn’t matter if you don’t know how to manage it. The truth is, even just $1 million could last your lifetime if you know what to do with it. You don’t have to be a millionaire (or even close) to benefit from the moral of Warren Sapp’s story and the stories of so many other Americans.
Making smart choices, even small choices, can do wonders in any given financial situation. While investing is always an option for growth, simple things like using a coffee maker instead of buying Starbucks everyday can really add up. It can mean hundreds in your savings account at the end of the year. More savings means more stability, more confidence, and more freedom.
What if we told you that you could start saving by reducing your monthly bills and you could do it right now? At Shrinkabill, we do the hard work of renegotiating monthly bills that you don’t want or don’t have time to do. Take advantage of this risk-free service before you lose any more of that hard earned cash.