This week, as part of our series on the different ways to invest your money, let's take a look at a professional category that seems to be a master in the art of... misusing your money.
The most perceptive of our readers will have guessed that we are talking about footballers. Without falling into too many commonplaces, we must admit that the clichés are tenacious. The image of the footballer, talented but a bit of a moron, not knowing what to do with his salary, and who ends up in the hands of crooked agents, seems to be a familiar story. So, even if you're not a football fan, this newsletter should teach you a few things. And, by the end of your reading, you'll know the pitfalls to avoid!
As we know, not all football players are millionaires. The salaries of the stars cause scandal, but we often forget that their careers are short.
Obviously, the salaries at a club owned by Qataris, such as PSG, which can afford world-class stars, are not comparable to those here in Belgium. The subject is rather taboo in our country but it seems that the best paid player is the goalkeeper of Brugge (and understudy of Thibaut Courtois in the national team), Simon Mignolet. Simon's salary is said to be around three million euros gross per year... which is already a comfortable living.
The average salary in Belgium is said to be around 200,000 euros gross per year. With such a figure, our country is the poor relation in Europe. In England, for example, considered to be the richest league in Europe, this amount is multiplied by 10...
These big winnings can turn the heads of players, sometimes very young. This is the first scourge. But there is another: some players have not prepared well or do not know how to manage their post-career. Indeed, it is not always easy to start a new life, for some away from football, at 40. And there are many reasons for this: money flowing in and then out, a broken career, dubious or risky investments, tax debts, costly divorces, a star's lifestyle, gambling, alcohol and drug addictions, shady advisers, the harmful effects of the entourage (agents, friends, family, etc.). Even the greatest players have experienced difficulties at the end of their careers. Maradona, Gascoigne, Best, etc., this danger spares nobody.
Solutions exist to help the players concerned. Here again, there are a lot of crooks who gravitate towards the wealthy and you have to choose carefully, otherwise you will run into an opportunist who, once he has taken all there is to take, will disappear.
In general, it is better to choose an established company with a good reputation. For example, Creutz & Partners, an asset management company in the Grand Duchy of Luxembourg, was founded by a German football club fan. It was this passion that made him realise that there was probably something to be done to manage players' assets during and after their careers. Even if the company does not only count sportsmen among its clients, they are increasingly numerous and today represent 10% of the clientele. Tom Rasqué, one of the company's directors, explains the company's mission: "We are quite proud of the fact that most of our customers come to us by word of mouth, our customers recommend us in the locker room, we are by their side not only during their sporting career but also in the second half of their life. And those who come to us never leave us. We make life easier for them when they change countries, for example by using life insurance solutions, we help them to save, to think sooner rather than later, to create the right reflexes, to protect themselves against the risk of bankruptcy, which is still very present if you don't take care of it right away. We allow them to concentrate 100% on their sporting career. As you can see, the service is very complete.
Without going into detail, our interviewer is well aware of the problems that his clients can encounter: "It's often a problem of entourage. You are 19 years old, you arrive in a new town, a new club, you find yourself with a large income and, as a result, a new, very large, very interested entourage. Everyone wants something from you, and that's when you need us, a partner you can trust. Depending on their origins, some sportsmen also have a cultural need, not to say a moral obligation, to support their family, their elders, and it is even more delicate and difficult for them to become financially emancipated", and he cited the example of an African footballer who "played in a major European league and lived in a villa with twenty people, at his own expense".
Finally, it would be unfair to stigmatise footballers. Other sportsmen and women are also victims of financial problems. One example is the Spanish tennis champion Arantxa Sanchez, who was swindled by her own parents. In recent news there is also the Boris Becker affair. Already plundered by his 25 million euro divorce, caught by the taxman and the author of risky investments, the former tennis champion, who won
40 million during his career, is personally bankrupt. He has already auctioned off some of his trophies to pay off some of his debts. And he has just been sentenced by the British courts to 2.5 years in prison for fraud. Finally, there is also the former F1 driver Emerson Fittipaldi. He is said to have debts amounting to 6.5 million euros which he has undertaken to repay. In the meantime, several of his assets, including his former racing cars, have been seized.
Let's face it... sport and financial investments don't always mix.
If you want to know more about money and sport, go to the LOBBY 55 page turner. And this weekend, just watch the football or F1 on TV. It's less risky...