Sudden loss of income is something that everybody could face, whether due to redundancy, illness, or caring responsibilities. However, as a professional rugby player, you may be more likely to experience an overnight change in your earnings.
Your club might decide not to renew your contract, or an injury might mean you are unable to play. In some cases, your career may end abruptly if you sustain a serious injury. It is also important to remember that no matter what happens, your playing career will eventually come to a natural end.
As such, creating a safety net so you can continue meeting your financial obligations and preparing for the future is a crucial part of financial planning for rugby players.
Here are three ways you can achieve this.
1. Build an emergency fund
If your income falls, your immediate priority is ensuring you can continue paying for essential expenses such as your mortgage, utility bills, and groceries.
That is why having an emergency fund in an easily accessible cash savings account is so important.
Should your income fall, you can use these savings to cover your expenses and avoid getting behind on bills and building up expensive debt. Additionally, even if you are still earning a regular income, an emergency fund is useful for covering large expenses that fall outside your normal budget, such as unexpected home repairs.
It is often recommended that you keep enough cash to last between three and six months. However, you may save more than this if you value financial security, particularly as professional sportspeople often have a less stable income stream.
2. Invest in income protection
An emergency fund can cover your immediate needs if you are unable to play, but if an injury puts you out of action for a longer period, you may need protection to help you remain financially stable.
Income protection policies pay a fixed amount each month (usually a portion of your normal salary) so you can continue meeting your financial responsibilities. You might also use these funds to contribute to your savings and investments, so you continue building wealth despite being unable to play.
Your club will typically offer sick pay that covers you for a certain period, and many will also provide income protection. Additionally, you may have cover through an association for players.
As such, it is important to consider what cover you already have and whether it is comprehensive enough to meet your needs. You may decide to supplement existing cover with your own personal income protection.
Some insurers also offer career-ending income protection to cater specifically to players who sustain an injury that takes them off the pitch permanently. This may be a useful investment that allows you to maintain lasting financial security if your career ends suddenly.
3. Build additional income streams
As a professional rugby player, your income is less stable than it would be if you had a typical nine-to-five job. That is why you may want to consider building additional income streams, so when you stop playing (whether through injury or the natural end of your career), your earnings do not disappear overnight.
There are many ways for players to earn additional income, including adverts, sponsorship deals, punditry, and TV appearances. You might also earn an income outside the world of rugby from property investments or business interests, for example.
Having these income streams gives you a financial buffer if you are unable to play professional rugby. Also, when your playing career comes to a natural end, you could build on these opportunities and transition into a second career.
Get in touch
If you feel unprepared for a sudden loss in income, please do get in touch with us at DBL Asset Management.
Email enquiries@dbl-am.com or call 01625 529499 to speak to us today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Note that financial protection plans typically have no cash-in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.