Deciding whether to hire an NIL financial advisor is one of the biggest business moves a student-athlete can make. As athletes, we excel in our sports, pushing ourselves to reach new heights. We spend countless hours perfecting our skills, determined to leave a lasting impact on the field, court, or track. However, in the midst of our rigorous training and competition, it’s easy to overlook another essential aspect of our lives: our financial well-being.
Disclaimer: At NIL Island, we share expert-vetted insights to help you navigate the NIL landscape. However, every athlete’s situation is unique. This content is not a substitute for professional financial advice; please speak with a licensed advisor for personalized guidance.
You’re not the only one confused
Navigating finances can be overwhelming. It certainly took me a while to figure out how to organize my savings and investments, and I imagine I will continue seeking financial guidance for decades to come!
It’s TOTALLY normal to feel confused or unsure about managing your hard-earned NIL money. That’s where the expertise of a financial advisor can make a huge difference.
Personal finance is easier with an expert on your side
Of course, familiarizing yourself with fundamental concepts such as checking accounts, high-interest savings accounts and retirement plans is always helpful. However, nothing compares to talking with an expert who can walk you through options and answer all the questions that pop up.
Let your money work for you
We all want to maximize and grow our money. Sometimes, it feels like there are a million different options, but none of them feel doable.
A financial advisor can help you identify investment opportunities tailored to your risk profile, goals, and personal desires. Whether you’re interested in exploring stocks, bonds, real estate, or other investment avenues, a knowledgeable advisor will guide you toward the most suitable options.
Start early: the power of compound interest
As a student-athlete, time is on your side. The earlier you start managing your finances, the more you can benefit from the power of compound interest.
For example, a $10,000 investment today with a 10% annual return will be worth over $450,000 in 40 years. However, it would only be worth about $67,000 in 20 years.
By putting your money to work through strategic investments and savings, you can watch your wealth grow exponentially over time.
Phase 1: The “Do I Need One?” Gut Check
You might not need a full-scale wealth manager if you’re doing one-off $500 deals, but you should start looking for professional help if:
- [ ] Your income is complex: You have multiple deals, some paying in cash and others in product/merchandise (which is still taxable!).
- [ ] Your income is complex: You have multiple deals, some paying in cash and others in product/merchandise (which is still taxable!).
- [ ] You’re hitting the tax threshold: You expect to earn more than $13,850 (the standard deduction) in a year.
- [ ] You’re feeling “Money Paralysis”: You have cash sitting in a checking account because you’re afraid to spend it or lose it.
- [ ] You want to “Go Pro” in life: You want to use this money as a “launchpad” for after graduation, whether you play professionally or not.
Phase 2: The “Vet Your Team” Interview
Don’t just hire the first person who DMs you. Use these questions to find a “fiduciary” – someone legally obligated to act in your best interest.
- [ ] Are you a Fiduciary? (The answer must be a firm “Yes.”)
- [ ] How are you paid? (Look for “Fee-only.” Avoid advisors who make commissions by selling you specific insurance or investment products.)
- [ ] What is your experience with NIL? (They should understand NCAA eligibility rules and “Jock Taxes” – paying taxes in states where you play away games.)
- [ ] What is your advisor-to-client ratio? (You want someone who has time to answer a text when a new deal comes across your desk.)
Phase 3: The NIL Specialization “Must-Haves”
An advisor for a student-athlete needs to do more than just “pick stocks.” They should help you check these boxes:
- [ ] Tax Strategy: Helping you set aside 20-30% of every check so you aren’t hit with a massive bill in April.
- [ ] Entity Setup: Advising on whether you should form an LLC to protect yourself and potentially save on taxes.
- [ ] Direct Coordination: Can they talk directly to your agent, your parents, or your school’s compliance office?
- [ ] Foundational Education: Do they explain why they are recommending a Roth IRA or a High-Yield Savings Account, or are they just talking in jargon?
Phase 4: Red Flags to Avoid 🚩
- [ ] They promise “guaranteed” high returns (e.g., “I’ll double your money in a year”).
- [ ] They push “hot” tips like specific crypto coins or “exclusive” private equity deals.
- [ ] They are vague about their fees.
- [ ] They try to distance you from your family or current mentors.
Pro Tip: Your athletic career has an expiration date, but your “Financial Life” is just beginning. Treat your first NIL check like a seed, not a trophy.
Choosing the right advisor
Selecting the right financial advisor is crucial to ensuring your financial success. You’ll want to select a trusted advisor whose expertise lines up with the services you need and who feels like a good fit.
Conclusion
As student-athletes, we invest our time, energy, and passion into our sports. We owe it to our future selves to invest in our financial futures too. By seeking the guidance of a financial advisor, we can take control of our finances, make informed decisions, and lay the foundation for a prosperous future. We all deserve to embark on a path toward financial success!
The best time to start the conversation is now 🙂
Learn more about NIL finances: