Long-term winners use defensive approach
Being a professional footballer can be a well-paid but short-lived occupation. Most players are looking for a new career by the time their 30th birthday rolls around.
Lucrative coaching and commentating jobs go to the lucky few, but what happens to the rest once they've hung up their boots? Are they set for life after several years of six-figure earnings, or do the temptations of fast cars and high living result in the bulk of the big dollars slipping through youthful fingers?
AFL clubs rely on the Players Association to conduct financial education courses, or let players' managers provide advice. Australian football legend, coach and commentator Leigh Matthews offers curt advice to young players with six-figure salaries burning holes in their pockets.
"Understand that, as a young footballer, [you are] probably earning as much as [you are] going to for [your] whole life," he says. "If you understand that reality, you'll be more prudent financially."
Conversely, those who spend as they go and acquire a taste for five-star luxury will experience a shock if forced to crimp back to a very different lifestyle, on average earnings of $70,000 or $80,000, after the final siren sounds.
Cronulla Sharks halfback Chad Townsend, 22, is trying to ensure his earnings don't slip through his fingers. Townsend began making decent money since his first-grade debut in 2011. Twelve months later, he sought the services of a financial adviser.
A good accumulator under his own steam - "I've always been pretty smart with my money with regards to trying to save" - he subsequently formalised his goals, including getting a foothold in the property market.
Last year, he bought a two-bedroom investment unit in Cronulla with a 10 per cent deposit. Mortgage payments are covered by the rent and extra cash is stashed in an offset account. Townsend keeps his own costs low by living at home, where he pays weekly board of $100.
He recently signed a two-year contract with the Auckland Warriors for the 2014 and 2015 NRL seasons and hopes to buy a second property on similar terms during that time.
Although cars appeal to many young players, Townsend has resisted. A session with his financial adviser about depreciating assets helped crystallise his decision to stick with his first set of wheels, a 1996 Commodore.
"I try to inject my money into my priority, my unit," Townsend says.
Retiring mortgage-free, or with a small loan, is the goal, and he's happy to live modestly in the meantime, with the occasional indulgence, such as a two-week, end-of-season holiday in Thailand, along the way. Australian Rugby League Commission chairman John Grant says Townsend's prudence is well founded.
While there are a few stars who enjoy long and lucrative careers, raking in as much as $800,000 a season, "the rump of players don't necessarily earn what people would expect of them", Grant says.
Some make as little as $75,000 a year. The average number of games played is about 43, which means a farewell lap of the field and the jobs queue for most, after two or three seasons.
For football players who have a good run, there's the opportunity to get a decent-size nest egg together by the time they exit the game, Grant says.
"They've got to accrue enough and invest wisely enough to provide for themselves post-football ... Their best goal is to save as much as possible and to invest in appreciating assets."
Ensuring players leave with more than stories of glory days is a priority for the NRL, which this year upped its welfare and education budget by $2 million.
Meanwhile, back in the 1960s and '70s the then VFL's Matthews juggled time on the field with a variety of jobs, including running his own sports store.
In those days, many players were forced to choose between sport and their career, with some professional types opting for the latter.
Matthews counts himself fortunate that football afforded him a handsome living, in the form of full-time coaching gigs, for more than two decades, with teams including Collingwood and the Brisbane Lions.
His approach to investing is conservative and diversified. At 61, the focus is on his self-managed superannuation fund. He uses advisers but takes a close interest in where money is invested.
"I try to have money in a variety of things that are hopefully low risk," Matthews says.
Today, NRL welfare and education manager Paul Heptonstall says the league tries to get to young players early, before they start earning first-grade salaries.
Under-20s induction camps include a session run by former players with financial-planning qualifications. Players at this level are paid very little and the focus is on budgeting and saving.
This year, the NRL has augmented these sessions with individual financial education programs for players making their first-grade debut. Players are urged to save, set financial goals and seek advice once the dollars have begun to build. The lessons are rudimentary but necessary, particularly for those from families with limited financial literacy.
"It's a tough thing because most of the young blokes we deal with don't come from money," Heptonstall says. "Without stereotyping, it's the reality of the demographic."
Buying a property is top priority for players with an eye to the future.
"Most of the young guys would love to own their own home," Heptonstall says. "If you can walk out with the mortgage paid off on a home, that's gold."
While some pull it off, unexpected affluence can lead to profligacy for less-disciplined types.
Former Wests Tigers player Joel Caine, 34, lost about $300,000 on a house-and-land investment in Victoria with fraudulent property developer Radisson Maine. The group collapsed in 2004, owing creditors $3.7 million.
The eldest of six from a battler background, Caine had made a promising start. After an early win with shares, he bought his first property, at age 19, for $106,000 and paid it off in four years.
A $625,000 family house in Caringbah followed, then, in 2003, Caine and a teammate Ben Galea began planning to open a Subway franchise. Shortly before finalising the deal they were persuaded to divert their money to Radisson Maine, at the time a club sponsor, on the promise of higher returns. He was eventually forced to sell it and his unit to settle his debt and had to discard his dream of retiring from the game mortgage-free.
Traps for young players
Financial pitfalls for players are plentiful, says Roskow Independent Advisory co-founder Matthew Ross, who's worked with a string of them. They include:
Trying to keep up with flusher teammates who can afford to live the high life.
Becoming too heavily geared as a result of unrealistic financial goals.
Buying poor-quality properties off the plan.
Splashing out on fancy cars and other depreciating assets.