Sunday, September 13, 2015

Tight Ends and Tight Wallets (or, NFL football is back!)

Frugality isn't just for the poor!


Picture from:

One of the NFL's biggest stars, record-setting tight end Rob Gronkowski of the New England Patriots, says that he hasn't touched his NFL salary yet! Instead, he lives off of his earnings from commercials and product endorsements (plus, as you can see in that article, someone ghostwrote a book about his life--Gronk is sure to earn some money from that, too).

It's unknown how much money Gronk gets for these endorsements, but according to at least one article, ESPN reporter Darren Rovell estimates that he's earned $3.5 million from endorsements so far in his career. (Don't ask me how he arrived at that estimate; who knows how accurate it is...) At any rate, Gronk is a legitimate star who dominates defenses when he's on the field--so I'm sure it's not cheap to hire him!

Up to this point in his career, Gronkowski has earned about $16 million, which he has apparently saved and/or invested--a nice financial cushion, to be sure! Moreover, in 2012, Gronkowski signed a 6-year, $54 million extension to his rookie contract!

Yeah...he's pumped!

As some die-hard football fans like me know, players almost never see every dollar of a contract. The team will load most of the salary into the last year or two of a contract, and will either pressure the player to renegotiate their contract before it escalates, or they will cut or trade that player. So a better measure is the over $13 million guaranteed, plus the $8 million signing bonus.

So, even if he won't see the full $54 million, Gronk can count on $21-million-plus. Not too shabby!

Gronkowski's famous 'spike' TD celebration, courtesy 

Here's the Froogal Stoodent's hot take: I think Gronk is wise to bank his salary. He can live quite well off of his endorsements, as well as other projects like his recent book. In a violent game like football, your career can end at any moment, with a hard hit or a buckled knee or a torn tendon if you mis-step. Too many pro athletes fail to prepare for the inevitable end of their high-income days, and end up broke and bankrupt.

We can all learn a couple things from this tale: first, Gronk is striking while the iron is hot. While he is a popular and dominant sports star, he's using his famous name and face to get multiple revenue streams. Even though most of us will never be able to capitalize on fame and fortune, the lesson to get multiple sources of income is a sound one.

Second, he is living well within his means. Need I remind you about the Millionaire Mindset? :) Granted, many of us can only dream of making $3.5 million over 5 or 6 years, but considering that Gronk could easily spend five times that amount and remain within his income, it's fairly obvious that he wants to set himself up well for the future, no matter what his life after football may bring.

It's always good advice to minimize your needs, rather than allowing expectations (your own or others') to inflate your lifestyle. As I've said before, there is virtually no income level that you can't live within, as long as you're deliberate about it and make wise financial choices.

Impressive!

Other articles on this topic:
http://ftw.usatoday.com/2015/06/rob-gronkowski-says-he-hasnt-spent-one-dime-of-his-nfl-salary
http://www.reddit.com/r/nfl/comments/3apu48/to_this_day_i_still_havent_touched_one_dime_of_my/