March Madness, the popular single elimination 68-team college basketball tournament is now in full-swing. The tournament, which now celebrates its 75th year, will end on April 8 at the Georgia Dome in the final match between two outstanding teams. Sports enthusiasts and professional recruiters from the National Basketball Association (NBA) teams across the country will be paying close attention.
As a financial advisor, I look at these games a bit differently. Not only do I wonder which players will be recruited to the pro teams, but I immediately hope that each new rookie will be mindful with their newfound wealth, in the form of high salaries and endorsements heading their way.
Here are a few tips I would advise a rookie NBA player prior to entering their first season:
Nothing but net. As a rookie you need to focus on getting the ball into the net, so let someone else be concerned with your net worth and helping it grow. Let the excitement of the new job settle down a bit before making any major decisions on new purchases or investments. Rookies must first focus on what they do best — dribbling, passing, catching, shooting baskets — and then take the time to get educated about finances. The average career of a professional NBA player is a little under 5 years. A professional financial advisor can help educate and layout out an investment plan down the road.
Be mindful of locker room envy. Rookies will start to measure up to what veteran team players have acquired — expensive cars and houses, the latest clothes and tech gadgets — and might desire these items immediately. Again, a rookie should have some restraint and not be tempted with too many big purchases too soon. They should continue to focus on what they do best.
Consult an expert. A professional basketball team wouldn’t go into a game without a strategy, so rookies should not manage their finances without one either. A financial advisor can educate and guide players from developing a budget to building a sound investment strategy.
While you watch the games unfold, I hope you’ll think about what your future financial game plan looks like.
Rob Rumley is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Atlanta. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors do not provide tax or legal advice. Investors should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters. Past performance is no guarantee of future results. An investment cannot be made directly in a market index. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.