A career as a pro athlete is a rare opportunity most of us will never experience. But for all their outward glamour, those careers also carry a lot of risk.
The competition is stiff, the majority of athletes don’t ascend to the heights of fame, and the career window for most pros is only a few years—and fewer still if a player falls short of expectations or faces serious injury.
That’s why some far-sighted athletes, like baseball player Ross Stripling, are making back-up plans for the next stage of their working life.
A starting pitcher for the Los Angeles Dodgers, Stripling, 27, recognizes that even the most promising pro careers can meet with disappointment, dashed dreams and unexpected outcomes. Which helps explain why he’s also a licensed stockbroker with the Memphis-based investment firm Wunderlich Securities, working in the firm’s Houston office during his off-season.
Stripling’s interest in investing was sparked by his grandfather, Hayes Stripling, an active day trader during his retirement who shared his insights about business and investing.
“He was a guy I would go to and ask questions,” Stripling told the Orange County Register in a 2016 interview. “What are you looking for when you are looking for a company to invest in? Or what do you think the market is going to do in the next three to six months? It’s something really that started off as something for us to talk about when we called up and had a fun conversation.”
After playing ball for Texas A&M, where he majored in finance, Stripling embarked on his pro career in 2012. He received a six-figure signing bonus upon inking his league contract, but there was no spending spree for him—instead, he opted to invest his bonus mostly in equities and a few mutual funds.
An injury in 2014 required surgery, which left him temporarily sidelined from play and thinking about the need for alternative career plans, in the event his baseball career didn’t work out.
“[The surgery is] something you should come back from, but you never know,” Stripling tells Fox Business. “I wanted something to fall back on.”
“He’s a realistic guy,” Matthew Houston, senior vice president at Wunderlich, told the Register. “He understands he could have been out of the baseball business in a short time, so he was looking out for building a career whether it’s in two years or 15 years, which I don’t know if that’s typical of somebody in the minor leagues. I suspect it’s not.”
And while baseball and money management may appear at first glance to be widely disparate career paths, Stripling sees at least one commonality in that both place a priority on analyzing the data to optimize outcomes. In a post-“Moneyball” era, knowing how to read the stats to guide decision-making can bring big rewards—a lesson that Stripling brings to both of his jobs.
“The statistical analysis that’s out there right now, he’s really working hard to break it down and have an idea of all these hitters he’s never faced before, what a computer or what a stat system might say that are the safe spots for him to go,” Dodgers catcher A.J. Ellis said in the Register interview. “So he’s able to really make a lot of good choices.”
Financial industry firms have taken an interest in former athletes because of the unique qualities they bring to the workplace.
Though most are young, they have already logged significant achievements in their chosen athletic fields, early successes that afford them a sense of confidence that comes from exercising discipline, focus and hard work in pursuit of a goal. They also tend to be self-starters and team players with a strong competitive instinct, and are accustomed to performing under pressure. In addition to the skills and work ethic that many athletes bring, their employers may also enjoy a public relations boost from having a former pro player or Olympic competitor on staff.
“The approach Ross has taken, thoughtfully preparing for a variety of outcomes with his sports career and personal financial situation, is exactly how an advisor should counsel clients,” comments Wunderlich president Philip Zanone. “Ross is a great example of how an athlete’s unique professional background and experiences can add value to the client relationship, as well as the entrepreneurial culture of a firm like ours.”
Second-stage opportunities are particularly important for athletes given the career risks they face. The news is full of stories of star players who go from multimillion-dollar contracts to hardship after losing everything. Poor spending and saving choices, bad management, failed business ventures, and tax woes can be as serious a threat as a career-ending injury.
An estimated 78% of NFL players “face bankruptcy or serious financial stress” within two years of retirement from the league; for NBA players, it’s 60% within five years, according to a 2014 report in the Wall Street Journal.
But it doesn’t have to be that way, and Stripling’s example illustrates how having a back-up plan for your career can help ensure an athlete doesn’t end up as a cautionary tale.
“Baseball makes me extremely competitive, and it’s a competitive industry. You have to prove to clients that you can make them some money,” Stripling said in the Fox Business interview. “It’s nice always knowing I’ve got a degree and something to fall back on, God forbid something happened to my arm. But obviously I want to play baseball for the next 10 years.”
*Photo courtesy of the Los Angeles Dodgers