Football stars like Messi and Ronaldo live lives we can only envy. However, it isn’t all a bed of roses. Here’s what we can learn from some of the bad financial decisions they’ve taken.
With the FIFA World Cup on everyone’s lips these days, it’s hard to ignore all the hullabaloo surrounding some of the game’s most famous stars. While the world let out a collective sigh of disappointment as the likes of Lionel Messi, Cristiano Ronaldo and Neymar exited the World Cup early, it certainly proved that underdogs can prevail against the best as long as they are organised and tactically disciplined.
But we know what you’re probably thinking? The likes of Messi and Ronaldo can go back to their ultra-lavish mansions and lounge by their pools without a care in the world. However, if they aren’t careful with how they manage their money, they could end up penniless as quickly as they earned their millions.
Additional Reading: Ronaldo VS Messi – The Ultimate Financial Showdown
The football world is certainly littered with rags to riches stories. However, the number of football stars that end up bankrupt or with next to nothing to their name are quite numerous as well. In fact, this seems to be the case with almost all high-paying sports professionals.
The renowned Sports Illustrated publication recently reported that a staggering 78% of all American Football players went broke just two years after retiring, while around 60% of all professional basketball players in the NBA lost everything they earned five years after doing the same.
While many of us can only dream of living the lifestyles many of the world’s greatest footballers live, here are some examples of how some footballers erred financially and what their mistakes can teach us about managing our money better.
1) Tax Evasion
Lionel Messi may be worshipped the world over by football fans as a beacon of everything great about the game, but even he isn’t exempt from poor financial decisions. Five years ago, Messi came under the roving eye of the tax authorities for alleged tax evasion.
Both Messi and his father were eventually found guilty of evading tax and were slapped with prison terms of 21 months each. To add salt to their financial wounds, they were also fined a whopping 3 million euros in total.
Although Messi escaped his prison sentence (as most influential personalities seem to have a habit of doing), his tax evasion case came as a shocker to the entire sporting world. While his fine may seem like a drop in the ocean, especially since his fortune is estimated at more than 300 million dollars, a lesser player could have been financially crippled.
Closer to home, you probably already know that the last day to file your tax return is July 31st 2018. So, unless you want to the income tax authorities crashing through your windows in the middle of the night and issuing you with a massive fine, make sure you file your return on time. That’s certainly the last thing you need, especially if your finances aren’t in the best of shape.
Additional Reading: How To File Tax Returns Online!
2) Concealment of Income
While Ronaldo and Messi always seem to be trying to outdo each other on the pitch, they also seem to be trying to outdo each other when it comes to courting financial controversy.
Ronaldo has been accused of concealing the income he received from the sale of his image rights by channelling said income towards tax havens in countries around the world. In all, Ronaldo was alleged to have committed tax fraud to the tune of a massive 14.7 million euros.
Like we mentioned earlier, make sure you file your taxes before the July 31st deadline and also make sure you furnish true and correct information regarding all your income. Concealing income when filing your returns can lead to a minimum charge or penalty of 100% of the amount of tax you are evading or a maximum of 300% of the said amount.
If that doesn’t give you the jitters, then we don’t know what will.
Additional Reading: E-Tax Filing: The Fast Lane To Returns
3) Poor Investments
Most Liverpool fans know John Arne Riise as one of the club’s finest left-backs in his prime. While he still remains a cult hero both in Liverpool and his native Norway, Riise certainly wasn’t immune from making poor financial decisions despite being paid handsomely on a weekly basis.
In a textbook case of a famous footballer who blew all his money on poor investments, Riise filed for bankruptcy over 10 years ago after putting all his money in a hotel that depleted his finances at an alarming pace. If that wasn’t enough, he and his agent were allegedly implicated in a 3 million pound fraud case in Norway. Not the best way to handle your money by any stretch.
Remember, just because you earn a handsome salary and live a fancy lifestyle, a slew of bad financial decisions and investments can see you lose everything in the blink of an eye. This is why it is extremely important to consult an experienced financial advisor to help you manage your money better and tell you exactly how to invest your money so that you’re financially covered not just for the short term but the long haul as well.
Additional Reading: Why A Goal-Based Approach To Investment Is Crucial
4) Excessive Spending
While Manchester United ‘legend’ Eric Djemba-Djemba has long been the subject of countless memes and jokes around the world, not many people know that the midfielder hit rock bottom back in 2007 despite earning a frankly eye-watering salary of 75,000 pounds per month.
But where did it all go south for poor old Eric? Well, for one thing, he loved to live an extravagant lifestyle and he loved to party. Combine this with his love for luxury brands and cars and you have a recipe for financial disaster.
Unfortunately for him, he didn’t put in the same commitment to spending as he did towards his performances on the pitch and he was soon frozen out of the team and descended into obscurity.
So, unless you want to follow in the footsteps of Mr. Djemba-Djemba here, make sure you keep your spending in check. Swiping your Credit Card without a care in the world can land you in a world of financial hurt. Using is well, however, can get you heaps of rewards, cashback and more!
Additional Reading: Tips To Use Your Credit Card Wisely
Make sure you spend within your limits and pay your Credit Card bills on time every month to stave away the onset of debt. Yes, we all love to party and live it up every now and then, but it is also extremely important to know when to keep temptation at bay so that your bank account is still in one piece.
Additional Reading: BankBazaar’s 7 Best Credit Card Tips For 2018
Of course, there are many positives we can take away from the way professional footballers conduct themselves, especially when it comes to their will to succeed and their altruistic efforts towards charitable causes.
However, you would be wise to not follow in their footsteps when it comes to bad financial decisions like the ones mentioned above because unless you’re a Messi or a Ronaldo, you could be slaving away for the rest of your life paying off your debt.