More Than An Athlete: Two Reasons Why Professional Athletes Can Be Value-Added Investors
Over the last few years, there has been an influx of athletes of all sports, both male and female, wanting to take control over their money. The days of simply relying on he or she’s financial advisor have shifted to athletes taking a hands-on approach regarding their investments. Many of today’s athletes are learning from the mistakes of their idols or colleagues. Their motivation; not being added to that long list of professional athletes that end up broke or bankrupt shortly after their playing days are completed. Today’s professional athletes want to show they are more than just athletes and that they have the intellect and capabilities needed to make sound financial investments and decisions. Below are two ways professional athletes can be value-added investors.
Celebrity
Professional athletes are beginning to see that there are opportunities in using he or she’s likeness that extend beyond the traditional endorsement deals with brands and companies. These athletes are now seeing that not only can they add value to a company or startup monetarily but with their celebrity and likeness as well. Professional athletes are unique investors as they bring something to the table very few investors can; their celebrity and following. Often times, a professional athletes’ celebrity adds more value to a company or startup than the monetary investment itself.
“The increase in revenue created from these competitive advantages from athlete endorsements easily outweighs the costs brands pay athletes in order to endorse products, making athlete product endorsements highly effective.” — Opendorse, Why Big Brands Spend so Much on Athlete Endorsements
As a society, we love latching onto and associating ourselves with celebrities. As a professional athlete myself, I have witnessed first hand the impact we have on society and within the business world. If a professional athlete posts or mentions a company, clothing item or restaurant on their social media it is guaranteed whatever is mentioned will generate more attention and traction than before. On three different occasions (2016 and twice in 2018) Lebron James was seen in a press conference or posted a picture in a particular hat, and all three times that hat sold out within hours! So, can this same influence transfer to the business world of investing?
Winning Attitude
The only thing preventing athletes from being the perfect investors, especially in startups, is their inexperience and lack of knowledge; both of which can be alleviated. There are intangibles athletes bring to an investment that simply cannot be taught. When investing, it is important to come up with a plan, sticking to that plan, and setting investment goals. Athletes have shown they can do both. Becoming a professional in anything involves extreme discipline, coming up with a plan of action and setting goals. Personally, before every season, I write down a set of goals for the season and a plan of action that will help me achieve that particular goal. Professional athletes are no stranger to the discipline it takes to achieve a set of goals and the methodical work it takes to achieve them.
I strongly believe that sport mimics life. Many people who are athletes come to learn many of life’s greatest lessons — the value of hard work and sacrifice, the significance of teamwork and commitment, and the reality of loss and disappointment. There will be some investments that are successful and produce a good ROI and others that will not pan out as expected. After these situations, how will the investor handle the outcome? Will they go back to the drawing board and figure out where their analysis went wrong, or will they move on without learning from the loss? As professional athletes, over the years, we have sharpened the tools needed to handle wins and loses; and how to grow from both. A key to handling these situations is never getting too high or too low. The process of staying even keel during wins and loses enables the individual to assess and evaluate what made the situation a success or a failure and how to build from each. In the world of investing, the ability to stay even keel throughout the lifecycle of investment is key because there are so many uncertainties and unknowns when investing in new ventures.
As social media continues to grow and impact the way people think and move you will continue to see more and more professional athletes enter the world of investing. Athletes are naturally competitive, when they see their teammates or colleagues investing or entering the tech startup world, they will not want to be left out or behind. As well, you have players like Andre Iguodala who hosts a summit for younger players to groom them as investors and to nurture their financial literacy. So, not only do these athletes have the money to invest they now are becoming equipped with the knowledge to become informed investors.
All in all, professional athletes have intangibles that cannot be taught that make them not only good investors but unique investors. Athletes are now wielding their influence not only on the field or court but off as well. The reach of an athlete in this era of social media and technology allows companies to reach consumers they would normally fail to reach, especially early-stage startups. Athletes having these intangible characteristics as well as their celebrity status not only makes them value-added investors, it just might make them the ideal investor.
