Let me tell you a cautionary tale. After learning that everyone at the club had one, a football client told us about a friend who wanted to have a swimming pool added to his home. It was a huge expense. He put seven figures into the project and wanted to show everyone the results. He was extremely happy with the feedback and was smiling until friends pointed out that they had done similar work for 10 times the price. Not only was he outrageously overpaid, but he couldn’t even swim.
No matter what your plans are for home improvements, it is worth taking the time to ensure your financial health. It can also make a difference in your overall lifestyle. Below are some budgeting tips that will help you make your money more productive.
Establish a budget and stick with it
Unfortunately, the harsh reality is that you can’t get it back once it’s gone.
The UK’s average life expectancy is over 80 years. This means that your earnings for the next few years could be enough to sustain you for the next 50 years. This may seem obvious. But it is important to plan ahead. Set a budget every month, keep an eye on your spending, and save the rest for the future.
By going through all of the standing orders of a football client and cancelling them that were no longer required, we helped him save thousands of pounds each month. After just a few hours, he was able cut his expenses without having to sacrifice his lifestyle.
Some players may find that cancelling a few direct deductions is not enough. If you are having trouble paying your bills, you should first admit to the problem and seek professional help. It’s not uncommon for players to accumulate large amounts of debt by living a lifestyle that doesn’t fit with their substantial earnings. It is possible to recover with honest and impartial advice.
Tax efficiency is a key component of your financial plan
If you think a clever tax-avoidance plan sounds too good to true, it probably is. A racy tax-avoidance scheme is likely to cause a political and economic crisis.
Take the time to do the basics, like maximising your pension contribution. This will allow you to receive up to 50% tax relief for the current year.
If you’re willing to risk, invest in a startup in a tax-efficient way through a Venture Capital Trust or Enterprise Investment Scheme. Each of these offer income tax relief between 30% and 50%. Some also give you the opportunity to defer some capital gains tax.
Also, it can be tax-efficient to invest in savings or investments in joint names. Any income generated will be taxable at lower rates. You must remember that when you transfer investments, you are giving up your right to receive them.
As we’ve seen with David Beckham giving to charity can not only be tax-efficient, but also generates tremendously positive publicity that may lead to greater earning potential than the money given.
Diversify your wealth
Split your cash between a variety assets instead of focusing on one area. It is often possible to spread the risk and achieve stability and security. Footballers seem to love investing in real property. You shouldn’t try to put all your eggs into one basket.
Give it away!
Some football players have begun to set up trusts and foundations. As we’ve seen with David Beckham in recent weeks, charitable giving is not only tax efficient, but it can also generate enormously positive publicity that may in turn increase earnings potential.
Although financial management is common sense, it can be difficult to choose the right option for you. This is especially true if you’re an international player.
Although financial management is common sense, it can be difficult to choose the right one for you. To keep your finances in order, it is worth getting a professional accountant. Contact one of these trade organizations or ask for recommendations from others if you don’t already know an accountant.
No matter how much you make, whether you’re making PS500 per week of PS250,000, it is impossible to neglect your finances. You can reach me for any financial questions or queries regarding this letter.