Debt Free

Sports Illustrated released their annual top 50 list of highest paid athletes and their Top 20 list of highest paid International Sports Stars. It’s sort of mind boggling, really, the amount of money we’ve accorded those who exhibit athletic talent. Tiger Woods is number 1 on the list. He made almost $12 million playing golf last year. That’s a ton of money, but surely isn’t enough to land at the exalted Numero Uno spot on SI’s list, is it? No, it’s not. Tiger benefits from being one of the most endorsable individuals on the face of the planet. He’s parlayed his desirability into an additional $100 million in compensation! Now that’s really a ton of money.

What Tiger and many of these other athletes have done is to leverage other attributes into impressive income. It was interesting how many had also not done so. Some of those who had better name recognition did relatively poorly in endorsement income relative to their peers, while some who you’d expect to earn relatively little in endorsements had handsome endorsement paychecks. For example, Shaq made a reported $20 million in endorsements last year. You’d expect that. Shaq’s very popular and has been so for a very long time. Jermaine O’Neal and Chris Webber however, 2 other NBA players who have been at a high level in the league for quite some time, earned a relative pittance in endorsements. While you wouldn’t expect them to make anywhere as much as Shaq, they made only $750,000 and $500,000 respectively. Their agents need to get them some better endorsement contracts. Not that they really need the money. Their agents did get them each over $18 million in salary for the year.

It got me thinking even more than I normally do about diversifying one’s income. Obviously multiple streams of income are better than one. If you rely on your job for 100% of your annual income and something happens, you’re screwed. You could get laid off, fired, your company could go out of business, there could be an economic downturn and your accounts could stop buying from you, or any one of a myriad of reasons could pop up to deny you your employment. If your income was diversified, you’d at least have some other income to keep you going while you found another job.

If, heaven forbid, Tiger Woods was hit by a Buick while crossing the street tomorrow, and unable to play another round of golf for the rest of his life, he would continue to have a (to say the least) very attractive endorsement income stream for years to come. Tiger may be a poor example, because if he’s invested even a small fraction of his income so far, he still wouldn’t need to work, ever. But the point is that he would have other income to sustain him. You should do likewise.

Weather you start your own business on the side, begin investing with an eye toward producing income, or get a second job (my personal least favorite choice), you shouldn’t have to rely on your primary employment as your only income. The personal financial security you experience by not having to rely completely on your primary job is enlightening as well. That being said, you should do as much as possible to ensure you indispensable at your place of employment. Do whatever it takes to not only maximize your income, but make sure your employer will go out of their way to keep you, even if they have to lay off everyone else.

How can you accomplish this feat of magic? It’s not as difficult as you may think. You need to have exemplary performance, sure, but you need to become great at important job functions that everyone else hates to do. If you can become great at doing the things that others either go out of their way to avoid, or just hate to do, you’ll do very well. It’s a little secret of how to do well in the workplace that many people never learn. It can even move you farther in the organization than many people who have otherwise excellent job performance.