Becoming a sports star can be a dream-come-true. However, for many athletes, that dream quickly turns into a financial nightmare. About 78% of NFL players go bankrupt or experience major financial difficulty two years after the conclusion of their careers, according to research by Sports Illustrated. Furthermore, 60% of NBA players face the same results within five years of retirement.
As a former professional quarterback, Michael Jackson is fully aware of the financial fate of many well-known athletes. Jackson didnâ€™t want to be part of that statistic. â€śI think the more you have, the less careful you tend to be,â€ť Jackson says.
During his career with the Arena Football Leagueâ€™s New Jersey Red Dogs in 2000 and 2001, Jackson kept debt at a minimum and lived within his means, making sure to only use credit cards in an emergency. Jackson has taken a three-pronged approach to wealth building: saving, budgeting, and building multiple streams of income.
While he was playing football, Jackson prepared for life after sports by setting aside a portion of his $70,000 salary to invest in business ventures. “I was always looking for a business opportunity,” he says.
â€śAfter my career, I was forced to be a little more frugal,â€ť Jackson says. The 42-year-old founded Paterson, New Jersey-based restaurant, Jacksonville in 2003 by combining more than $75,000 in savings with financial contributions from family members.
When Jacksonâ€™s business took off, he began hiring his financial team. â€śI knew it was time to seek professional financial help with my personal and business tax management and overall financial planning,â€ť he says. Jackson meets with an accountant and a financial planner every month. He keeps personal expenses separate from business expenses and maintains separate checking accounts and credit cards.
Jackson says he has no trouble creating or following a budget. He uses QuickBooks and restaurant point of sale software to track and monitor inventory and payroll for his five full-time and 20 part-time employees.
Another stream of income for Jackson is real estate. He purchased two New Jersey rental properties in the mid â€™90s, one of which houses the restaurant. Jackson collects about $7,000 in rent each month.
A third revenue stream that Jackson has recently tapped into is banking. â€śMy brother and I pooled our resources together with a few other parties and now own about 8% of a small community bank,â€ť he explains. Jacksonâ€™s brother is also a former professional athlete.
When asked about his “three-to-five-year plan,” Jackson says, â€śI hope to open up new businesses and to further diversify my income.â€ť
Jackson says while he was playing football, he always had his sights set on a â€śplan Bâ€ť for life after sports.