Money Talk for Athletes: The Correct Way to Use Banks, Investments, and Insurance That Every Pro Player Must Know

Every year, as we approach the end of the season and the contract renewal period for various sports, I receive more consultations about money.

In fact, I receive many consultations from young players, especially after they graduate from high school or university.

Having supported athletes from various sports, from major to minor leagues, I truly understand that feeling. Athletes live in an environment completely different from office workers, and just like modern elementary school students, no one taught us about money in school.

This time, based on my actual experience running a professional athlete management business, I would like to talk about money in a way that even an elementary school student can understand, covering what athletes need to know.

Why money talk is super important for athletes

A typical college-graduate office worker, assuming they work from age 22 until 65, has an income for about 43 years, whereas a professional athlete can become a pro as early as 18 after graduating high school, and even if they continue for a long time, they can only be active until about 35 (depending on the sport, if you don’t leave results, it’s common to have your contract terminated the following year...), which means, to put it extremely, only about 17 years.

In modern times, the trend has changed thanks to pioneers, but to put it extremely, athletes have to earn their lifetime income in less than half the time of an office worker.

Moreover, if you get injured tomorrow, there is a possibility that your income will suddenly become zero. This is a very severe reality, isn't it?

To avoid that, please refer to the following for how to think about your career from your active days.

Financial Basics: There are 3 places to keep your money

As a fundamental point, I want to talk about where to keep your money. Actually, there are only three main places. I will explain the characteristics of each by comparing them to familiar things.

1. Bank = “Safe Wallet”

A bank is like a “safe wallet” where you can deposit and withdraw money at any time.

As a concrete example, if you deposit 1 million yen in a bank,

• with an interest rate of 0.01%,it will increase by 100 yen after 1 year.

• If an ATM fee of 220 yen is charged, it will conversely decrease by 120 yen.

In other words, a bank is a “place to store money,” not a “place to grow money.”

2. Securities Company (Investment) = “A field to grow money”

Investing is like planting money as 'seeds' in a field and nurturing them to grow.

As a concrete example, if you invest 1 million yen in stocks,

• in the past, in good years,it could increase by 200,000 yen (20% annual return)

• but in bad years,it could decrease by 300,000 yen (-30% annual return)

• with recent stock market crashes,it could drop by more than 10% in a single day

In the world of investing, there is a golden rule: 'Risk and return are proportional.' In other words, anything with the potential for large gains also carries the potential for large losses.

By the way, an athlete who consulted with a professional partner of ours had invested 10 million yen in cryptocurrency, only for it to drop to 2 million yen two months later, which is why they reached out for advice. It seems they jumped on it after being told it was a guaranteed profit.

3. Life Insurance = 'A Safety Charm for Emergencies'

Life insurance is like a 'charm' that protects your family in the event of an emergency.

As a concrete example, if you pay 10,000 yen per month for life insurance

• you can get 100 million yen in coverage for a 10,000 yen premium

• An 'economic safety net for emergencies' that cannot be achieved with other financial products

• If nothing happens, in the case of term insurance, the money is not returned

However, I have an important question here.

'In an emergency, who will pay the money?'

This is an incredibly important topic, so please imagine this. Tomorrow, you suffer a major injury during practice. While there are some sports where the club covers everything, let's assume you need about 250,000 yen for surgery, about 1 million yen for hospitalization, and over 500,000 yen per month for living expenses.

In a situation like this,who will pay the money?

The answer is clear, but it would bethe person closest and most important to you.

Even if you think, “I’ll handle my own affairs,” in reality, you will end up causing trouble for those around you, and for the people you care about most.

If you are single, it’s your family and relatives. If you are married, it’s your wife or husband. If you have children, it’s your entire family.

In other words, deciding whether or not to get life insurance comes down to the following choice.

I have never met anyone who chooses B, but it is painful when people don’t understand the structure up to this point and end up causing trouble for their families.

The following is a true story. I heard it from the wife of an athlete we support, regarding the time before we started supporting them.

When I heard this story, I was reminded once again that life insurance is an ‘amulet’ to protect your family in an emergency, and it is something to protect the people you love.

Understand the Two Faces of Insurance

While I run a professional athlete management company, I also serve as an outside director for a comprehensive insurance agency, so I will explain the role of life insurance.

1. Preparation for the unexpected (this is its original role)

100 million yen in coverage for 10,000 yen a month. There is no other financial product with such good ‘investment efficiency.’

Some people think they ‘lost out’ if the unexpected doesn’t happen, but that’s the same as saying ‘fire insurance was a waste because there was no fire.’

2. Savings potential (the possibility of money growing more than in a bank)

Recent life insurance policies have mechanisms that allow your money to grow more than if you deposited it in a bank, even if the unexpected doesn’t happen.

In other words, you can ‘save’ while ‘preparing for the unexpected.’ Furthermore, professional athletes who are also business owners can utilize deduction brackets (general life insurance premiums, personal pension insurance premiums, nursing care medical insurance) when filing tax returns, but it is a fact that many people are not utilizing these deduction brackets while ‘preparing for the unexpected.’

The Truth Behind the ‘Life Insurance is Unnecessary’ Argument

I have seen more content on the web and social media about the ‘insurance is unnecessary’ argument, but to put it briefly, it is often for the following reasons.

Certainly, when comparing investments and insurance, investments often have better returns. However, it is my firm belief that this is no different from asking, "Which is more profitable, a wallet or a field?" or "Which is more profitable, a charm or a field?"—it is completely meaningless. This is because their roles are completely different, and due to the fact that they provide death benefits and tax advantages, I recommend life insurance as one option for professional athletes who have families.

Balance is everything. It's just like seasoning food.

"So, in the end, what should I do?" The answer is balance. To use a cooking analogy, neither salt alone nor sugar alone makes a dish tasty; it is only with the right amount of salt and the right amount of sweetness that you get a delicious meal.

The above is an average breakdown based on a review of our support records for professional athletes. Additionally, the key points by age group are as follows.

However, since these are just average breakdowns and points, the most important thing is to periodically adjust them according to your own situation.

Acquire the "ability to think for yourself"

The important thing is not to "be told the answer", but to acquire the "habit of thinking for yourself" about everything, which is the skill of getting yourself into a position where you can make the final decision.

For example, even when choosing the life insurance mentioned earlier, instead of asking "Which insurance is good?", you should ask "How much do I think I need in case of an emergency?" "Given my current household finances, how much can I afford to pay?" "How do I think my life will change in 10 or 20 years?"

In this way, make it a habit to first think based on what you value most, research it, and then consult with an expert. Since coverage details and riders differ for each insurance company, our company can also appropriately introduce you to insurance solicitors from our partner companies who can accommodate the products of each insurance company or your specific athletic characteristics.

Of course, if you already have a relationship with an insurance solicitor who supports you, there are cases where we can coordinate with them, so please rest assured.

I'm afraid of being deceived by insurance company staff or IFAs (asset advisors)

Most people who seek consultation know very little about the field, so in almost all cases, their brain automatically judges it as scary as a defense mechanism. It is true that some people use aggressive sales tactics, but experts who are truly supportive will listen carefully to your situation and make proposals based on the following points.

If you have not yet met such people, please feel free to consult with our company.

First, let's think about it together, one step at a time

Financial matters are certainly complex and can be troublesome, and honestly, it's easy to think, "I'll put it off for later." Even I, embarrassingly, tend to do that when it comes to my own affairs.

But as an athlete (business owner), this is a reality you cannot avoid; in fact, athletes are the ones who will be in trouble if they don't think about it.

Our company develops a professional athlete management business to support the athletic careers and subsequent lives of professional athletes, and you can receive a free initial consultation on the following items.

I sincerely hope that your athletic career, and the life that follows, will be richer and more secure, so please feel free to reach out if you need anything.

Of course, I welcome contact not only from professional athletes but also from fellow professionals who resonate with these topics; let's talk about potential business partnerships or collaborations.

You can reach me via the contact form, or direct message on X (formerly Twitter).