Properly planning your financial future is important, whatever you do and wherever you are in your career. As the Premier League returns to our screens following a break for Covid-19, Jamie Reed, wealth planner and retired professional footballer, discusses why having a financial plan was especially important for him, and why he is passionate about helping other young footballers prepare for the future.
I feel very lucky to have had the opportunity to be a professional footballer, but I realised early on I wasn’t going to be good enough to earn vast sums of money at the top of the game. Sadly, not all footballers (or any professional sports person for that matter) are created equal, and it was never going to be possible for me to retire at 35 and live free of financial worry. I knew I needed a plan B. Now, as a fully qualified wealth planner, I can bring my experience as a professional sportsman to help other young successful people plan financially for the future.
The ups and downs of a professional footballer
Most people leave school and either start an apprenticeship or go into tertiary education before embarking on a career. As a footballer, it’s much the same, albeit your career is dramatically shorter. You leave school as a 16-year old and start your apprenticeship. It is then a case of finding your feet and trying to make your way through to the first team. I made my debut at Wrexham, at the age of 17, along with a few other youth-team players. Personally, at that point, I thought I’d made it. But I was wrong! After making several appearances across League One and League Two, and a few loan moves, Wrexham was relegated. I was out of contract with a broken ankle and I was put on the scrap heap like a lot of other young boys.
I dropped into the Welsh pyramid system with Rhyl FC and Bangor City FC, winning the league twice and the Welsh Cup once. At that time, I was semi-professional, which made me realise the importance of planning ahead and keeping my options open. Fitness and the gym had always been a keen interest of mine, so I trained as a personal trainer to earn some extra money on the side. I felt It would also be a good back-up plan if my football contract wasn’t renewed or a serious injury ended my career.
As it happened, my fortunes took a turn for the better. I moved back to professional football with York City FC, where we won the FA Trophy and achieved promotion to League Two. After a season in the football league and a short spell at Cambridge United, it was time to move home and I signed for newly promoted Chester FC. But things didn’t quite go to plan there, and my football career took yet another blow.
In 2014, my wife and I moved to Australia, where I joined South Melbourne. We loved Australia, so I began to explore potential career options outside football. While I loved being a personal trainer, I knew it also had a limited shelf-life, albeit slightly longer than football. Finance and investments had always been an interest of mine, but it wasn’t until I saw how effectively Aussies plan their finances through their superannuation scheme, that I saw it as a career. In Australia, it is quite normal for an individual to have their own solicitor, accountant, and financial planner. I had not seen that here in the UK. People use a solicitor if they really need one, an accountant if they have a business, and most people don’t have a clue how a financial planner can help them.
Despite planning to stay in Australia, we found out my wife was pregnant with our first child, so we decided to move home to be close to family and friends. I signed a full-time 3-year deal with The New Saints FC, but halfway through the contract, and now with a young family, it was time to start my second career in financial planning. Admittedly, the starting salary wasn’t great, but I was able to top it up with part-time football. The plan was that over time, my ‘day job’ income would increase while the football income decreased. This enabled me to enjoy football, concentrate on increasing my knowledge in my new career, and most importantly, support my family.
Becoming a wealth planner
As a young player, I was surrounded by people who couldn’t look beyond next week when it came to managing their finances. This isn’t just the curse of footballers though, let’s be honest. Most young people will prioritise a night out, or a nice holiday, over saving into a pension.
One particular example of this short-term mindset was an ex-Premier League footballer who was determined to access his pension in his late 30s, despite not really needing the money. Professional sportspeople can access their pension earlier than 55, since their career is likely to end well before that. While a lot of players will use it to for the purpose it is intended – to help them in times of hardship – as with everything in life, there are people that can’t help themselves. This footballer believed his future in the sport was secure, as his friend was the manager of a club and had promised him a job with decent money. I advised him against accessing his pension due to the tax implications. I explained it wasn’t essential, that it might have a significant impact on his future planning, and he might not actually get the job he mentioned. But he ignored my advice and withdrew the funds anyway. Needless to say, his friend got sacked, he didn’t get the job, and he had wasted the savings while needlessly paying a tax rate of over 45% on them. This story is not atypical, and it really made me want to prevent others from making the same mistakes.
Over the years I’ve had clients from all walks of life – directors and business owners, NHS staff and sports professionals. As football has always been my passion, I found it very rewarding to help the younger players. There is nothing better than watching a player take my advice and then go on to play in a first team, while having a sound backup plan in place.
To develop a financial plan, I ask my clients to think carefully about the following:
- How would your family survive if you or your partner can’t pay the bills due to being made redundant, a serious illness, or worst of all, death?
- Do you have an emergency fund? Aim for at least three months, ideally six months, of your daily living expenditure.
- Are you maximising your tax allowance or using the tax relief available?
- Are you maximising your savings, their potential growth, and doing so tax efficiently?
- Could you enjoy your life on the State Pension – a maximum of £175 per week?
- Where do you see yourself in five years; 10 years; retirement?
These are difficult and confronting questions for a young person stepping into the world of work, whatever their career might be. But the question they should always come back to is: what happens if this doesn’t work out? The current situation with Covid-19 reminds us all that anything can happen and having a plan B always helps. I make sure my clients understand the different possible scenarios and stress test their plans to make sure their goals are truly viable.
Young people need to plan too
I have had a mixed footballing life, with plenty of ups and downs along the way, but because I set out a plan, I secured the future for my family and myself. I regularly monitor my plan and those of my clients, which is essential for adapting quickly, as circumstances change.
In my role as a wealth planner at Sanlam Wealth, my job is to help people realise their goals and create a pathway to meet those goals. Everybody wants something in life, whether that is their first or next house, a new car, boat or financial freedom in retirement. Personally, I loved being a footballer, but when I really think about it, the security of my family will always be my priority.