Playing professional rugby and earning a healthy salary means you can afford a good quality of life for you and your family. There is nothing wrong with enjoying this and spending on luxuries in the short term, but you may also want to save a portion of your earnings for the future.
Eventually, you will retire from playing and your income might fall for a period while you establish a second career. Having surplus wealth to fall back on could make this transition easier. Additionally, building wealth from an early age could mean you are better able to fund your lifestyle when you eventually retire from your career and stop working altogether.
Creating a budget and setting aside a percentage of your earnings means you can build a pot for the future.
You could leave these funds in a cash savings account and generate regular interest. Alternatively, you may decide to invest instead, exposing yourself to a greater level of risk but potentially generating higher returns.
Read on to learn what historical data tells us about these two options and how much you could earn.
Historical data shows that investing could offer greater returns than cash
A cash savings account may be attractive because you do not adopt the same level of risk as you would when investing in the stock market. You simply deposit your funds each month and earn interest each month.
Wealth in your cash savings account is not affected by market movements either.
In comparison, if you invest, the value of your portfolio can rise and fall, meaning you risk losing wealth.
However, historical data shows that the stock market may provide greater returns than a cash savings account.
For example, Barclays reports that between January 2020 and December 2024, their Everyday Saver account generated total growth of 3%.
In comparison, the FTSE All-Share, which represents around 98% of all UK shares, returned 26.48% in the same period.
According to the Rugby Paper, senior players earn, on average, between £113,000 and £175,000. So, we can use £150,000 as a general figure to consider how much a professional rugby player might earn from cash savings or investing.
If you earned £150,000 and set aside 10% of your salary each year for four years, you would have £60,000 to save or invest.
Using the figures from Barclays, this would mean that, in the period described, you would earn:
- £1,800 from a cash savings account
- £15,888 from investments in the FTSE All-Share index.
Naturally, these are only general figures, and past performance does not guarantee future returns. You may also be able to find a more favourable interest rate on a cash savings account.
However, these figures demonstrate that investing could provide greater returns than cash.
The global stock market has grown significantly over time, despite short-term fluctuations
You might be apprehensive about investing because of the potential for market volatility. Stock markets are always shifting, and this could mean that you experience losses at times.
This often happens when global events cause disruption to the stock market, as we saw recently when US president Donald Trump announced the introduction of tariffs on countries around the world.
This fear of market volatility may cause you to hold more of your wealth in cash as it seems “safer”. This could mean you miss out on opportunities to build wealth as investments typically offer greater returns than cash.
Fortunately, historical data shows that, despite the short-term fluctuations, your investments will likely continue growing in the long term.
The following graph compares the growth rate of the global stock market, bonds, and cash between December 2003 and December 2023.
Source: NatWest
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
As you can see, the global stock market experienced many temporary dips caused by significant events. However, the overall value continued growing at a much faster rate than cash savings.
It is important to keep some cash in an emergency fund
While investing may be an effective way to build wealth for the future, cash has an important role to play in your financial plan too.
It may be beneficial to hold cash savings for short- to medium-term expenses in the next five years or so, such as a holiday or new car.
More importantly, keeping a cash emergency fund could help you manage unexpected costs such as home repairs or an especially large utility bill without resorting to expensive borrowing.
It is generally recommended that you keep enough cash in your emergency fund to cover your expenses for three months, but you may prefer to keep more than this.
We can help you manage your investment portfolio
If you want to embrace the benefits of investing, we can support you. Your DBL adviser will help you determine what your financial aims are and build a portfolio to support them. We can also ensure that your investments are well-diversified, so you are not exposed to unnecessary risk.
During periods of market volatility, we will offer valuable reassurance and manage your portfolio so you can continue growing your wealth.
Email enquiries@dbl-am.com or call 01625 529 499 to speak to us today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.