5 Mistakes Athletes Make With Their First Big Contract

For professional athletes, signing that first big contract is a dream realized. Years of hard work, sacrifice, and relentless training have finally paid off. But while the numbers on the page can look life-changing, the reality is sobering: without the right strategy, sudden wealth can disappear as quickly as it arrives. At AlphaTrust, our Total Financial Management approach helps athletes protect, grow, and sustain their wealth so it lasts far beyond their playing careers. Here are the five most common mistakes athletes make with their first big contract—and how to avoid them.

1. Overspending on Lifestyle

The temptation to buy luxury cars, houses, and designer wardrobes is strong when the checks start clearing. But lifestyle inflation can drain even the largest contracts.

Better Approach: Create a spending plan that balances enjoyment with long-term stability. Prioritize assets that hold or increase in value, and keep lifestyle purchases within a disciplined budget.

2. Neglecting Taxes

Many athletes underestimate the impact of state and federal taxes on their income, leading to unexpected—and massive—liabilities.

Better Approach: Work with a tax strategist who understands multi-state residency, endorsements, and signing bonuses. Smart tax planning can preserve millions over a career.

3. Ignoring the Short Career Window

Unlike most professions, professional sports careers are often short. Assuming peak income will last forever can lead to financial ruin when contracts end.

Better Approach: Plan as though every contract could be your last. Build sustainable wealth through investments and businesses that generate income long after your playing days are over.

4. Trusting the Wrong People

Friends, family, or opportunistic “advisors” often circle when money arrives. Without careful vetting, athletes can fall victim to poor advice or outright fraud.

Better Approach: Assemble a professional team—financial advisor, attorney, and accountant—who act in your best interest and are accountable for results.

5. Failing to Invest Wisely

From risky startups to “can’t-miss” ventures, athletes are often pitched high-risk investments that don’t pay off.

Better Approach: Diversify across proven asset classes—stocks, bonds, real estate, and conservative alternatives. Risk has a place, but only as part of a disciplined, balanced portfolio.

A big contract should mark the beginning of lifelong financial security, not a fleeting moment of wealth. By avoiding these five mistakes and embracing smart planning, athletes can ensure their money works as hard as they do. At AlphaTrust, we specialize in Total Financial Management—helping athletes align their contracts, taxes, investments, and lifestyle choices into a strategy that endures long after the final whistle.