Great leaders understand that success belongs to the team and failures land on the coach. When the team isn’t winning—regardless of the reasons why—the coach is the person who has to answer for those losses. Typically, this equates to the coach being forced to resign or asked to leave. Fans of sports such as NCAA basketball may quickly offer the adage that coaches are hired to be fired. As true as that is, it is too easy to overlook that coaches are people with families, mortgages, and plans for the future. The stress and pressure of being a professional coach, especially someone who has been successful enough to earn a chance to run a Division 1 team, is overwhelming. Losing affects more than the fans; it impacts a coach’s family and their ability to provide for them.
The Challenges of Being a Coach
At Worth Advisors, LLC, we have been fortunate enough to work with several Division 1 college coaches, primarily those who work with men’s and women’s basketball teams. From a financial perspective, coaches have some very unique considerations. The NCAA is a competitive business, and if you look at the 2021-2022 season as an example, you will see at least five basketball coaches within the infamous SEC have been fired for their team’s performances.
No one gets to that level without being in the top percentile of their field, despite your opinions of the coach’s effectiveness. Even coaches with winning records and relative success in the NCAA Tournament can lose their job if the program wants a new voice in the locker room or someone with a different approach to the Xs and Os of the game.
Coaching From a Financial Planning Perspective
Although we hope that each of our clients has the storied career of Coach K (apologies if you are a UNC fan), it would be an understatement to say that level of longevity is atypical. Although a Division 1 basketball coach earns three to five million dollars a year, there is no guarantee that they will have another job that pays on that level when they leave the organization. Coaches have to save aggressively. We advise our clients never to have less than 12 months of living expenses. Two of those twelve months should be in the bank, and the rest should be invested.
Even coaches who haven’t risen to the level of Division 1 college athletics have even more significant challenges. In addition to taking on the financial risks of being a coach, they are also not earning the income that a Division 1 coach does. Because that is where most hope to go, they may have to take less money to get there. Consider the coach who has to choose between being a head coach at a smaller, less-paying school and becoming an assistant coach at a larger program.
Coaches earn their future jobs by proving their abilities at the lower levels. In the example we just provided, that coach may opt for less money now for the opportunity to be a head coach—which they may try to parlay into a head coaching role that pays more in the future. That same coach needs to be in the proper financial position to make that move.
Worth Advisors, LLC
As both fans of the sport and as professional financial planners, we are blessed enough to have been able to work with several NCAA basketball coaches. We understand the demands of being a coach and are in the best position to advise you on how to mitigate the risks associated with your job from a financial perspective. For more information about how we can serve you, contact Worth Advisors, LLC, and schedule an appointment. We look forward to meeting you.