Uncommon Money News (Round Up): Olympian Finances Edition
| August 30, 2012 | Posted by Roshawn Watson under Round Up |
By: Roshawn Watson
A few weeks ago, someone asked me “why do many pro athlete parents and Olympians go broke?” I wanted to to provide some insights.
- Opportunity Costs– Olympians forgo earning potential while training. Accordingly, during their prime income-earning years, where many people are getting established in their careers, Olympians are training. This takes a toll on both them and their parents who are often shouldering part or all of the economic burden during this period.
- Direct Costs – There are significant costs associated with becoming an Olympian. For example, Olympians typically require high-quality coaches that do not come cheap. Raising one’s profile in a sport often mandates that future Olympians travel the country and world, and without sponsorship, traveling can be quite expensive. Olympians also need specialized diets, pay for equipment and/or access to equipment and training facilities. Families also may have to relocate, which was the case for Olympian Gabby Douglas (moved from Virginia Beach to Iowa); I suspect that may have something to do with her mom’s reported bankruptcy filing.
- Other Factors – In many countries, Olympians receive national support from their local governments, but there are no such provisions for American Olympians. Additionally, Olympic prize money and sponsorship are not significant for most, particularly if you are not the elite of the elite. Consider the following levels of prize winnings:
- American Gold medal (London) – $25,000
- American Silver medal (London) – $15,000
- American Bronze medal (London) – $10,000
USA Track and Field Foundation found that only 50% of the American track and field athletes ranked in the top ten in the nation earn more than $15,000 a year from the sport.
All in all, it is certainly not as glamorous as you would think for most Olympic athletes, at least financially speaking. Sure there are the elite of the elite, such as Phelps who one source suggested may have $100,000,000 lifetime earnings, depending on how he parlays his Olympic fame into endorsement and special correspondent deals. He’s the exception of the exceptional not the norm.
***Special Thank You to Average Joe Money Blog/Free Financial Advisor for discussing Do Americans Know What Poverty Is? during their podcast:
Here are some personal finance and business articles from around the web that I thought you may appreciate:
Practice monthly home maintenance – Trent offers practical wisdom that will save you money. (The Simple Dollar)
Billionaire’s generous gift to stranger – A reminder to be kind the next time a stranger ask you for a favor
New Ipad (Ipad 5), New Kindle (Kindle Fire 2), and many other new devices expected to come to a store near you– While the technology life cycle is too short for most people to replace their “toys” every time a new product comes to market, if it is time to replace them, then look out for some new arrives.
Livestrong donations skyrocket after Armstrong’s decision to no longer fight doping allegations – Personally, I do not believe that he cheated. The real story is that he has raised >$500,000,000 for cancer research.
How much wealth it REALLY takes to be a member of the 1% – Forget the much purported annual salary, here is how much wealth is required to join the ranks of the financially elite.
Tricks Restaurants Use To Get You to Spend More – All I can say is that I have seen many of these “tricks” recently, so I think understanding the motivating forces behind the servers recommendations may be a defense against their persuasion.
USA Wrestling decided to provide $250,000 to wrestling gold medalists in London – I know we talked about the Olympian’s finances in today’s post, but here’s an organization that is trying the make the Olympic victory a financial one too for its members.
How Theme Parks and Movie Theaters “Price Gouge” for Food The title says it all (Money Life and More)
You have no idea what I paid for this room – A tale of love, money, and exorbitant hotel bills. Lindsay Lohan’s Chateau Marmont dilemma has nothing on this (Average Joe Money’s Blog)
What does it mean to be retired? – Joe has to defend his retirement again. Is retirement a state of mind? (Retire by 40)
What not to do with investments now – Portfolio manager Barbara offers her investing insights (Barbara Friedberg Personal Finance)
The following are some carnivals that I have recently participated in:
Yakezie Carnival
Yakezie Carnival (Passive Income to Retire)
Yakezie Carnival (See Debt Run)
Yakezie Carnival (Frugal Portland)
Yakezie Carnival (The Ultimate Jungle)
Carnival of Personal Finance
Carnival of Personal Finance #371 (Sweating the Big Stuff)
Carnival of Personal Finance #372 (The Financial Blogger)
Carnival of Personal Finance #374 (My Personal Finance Journey)
Carnival of Personal Finance #375 (Narrow Bridge)
Carnival of Personal Finance #376 (Good Financial Cents)
Festival of Frugality
Festival of Frugality #346 (One Smart Dollar)
Festival of Frugality #347 (This That and the MBA)
Image Credit: The US Army
It was such an important topic to discuss, we just couldn't pass it up on the podcast. …well written post and tough dilemma.
…on the Lohan thing…thankfully she wins! I haven't been kicked out yet…. 😉 Believe me, whenever there's a lull at a party, Cheryl gets lots of mileage out of our little story.
Thanks for the mention! Olympians train so hard for one shot every 4 years… I couldn't imagine the pressure it puts on them both financially and in their sport.
Hi Shawn, I heard an amazing interview on Sirrius radio "Oprah station" with Gabby Douglas and her mom and "parents" in Iowa. What sacrifice. It was fascinating how they navigated all of the stressors only to prevail in the end.
Thanks for discussing about such important topic. I’m glad to know various benefits of Olympian’s are having. Olympians are being working hard to achieve honor and fame for their countries and for them as well. This Olympian finances edition post make sense and glad to learn quite informative post.
Olympians are get proud of their people if they can success!! Win is very difficult in Olympic but anyone do hard in his job so I think he/she will get the success. Thanks the head up and keep posting like this!!!!!!!!!!!!
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