The Financial Wisdom of Rob Gronkowski

While I’m not a particularly big football fan, I have been in a variety of fantasy football leagues (including a long-running dynasty league) with several friends for many years. For the last decade, one of the best players in the game has been Rob Gronkowski, a tight end for the New England Patriots who has consistently been one of the best players in the league at his position. He recently chose to retire from the game, hopefully with his health intact.

So, why am I telling you about Rob Gronkowski? He’s on my short list of professional athletes who have been incredibly smart with their finances and lifestyle (along with one of my favorite baseball players, Daniel Norris). In short, Gronkowski has saved his entire NFL salary for his whole career, never spending a dime of it. He has lived entirely off of endorsement contracts and, in the end, has spent only a small fraction of what he has earned.

Pretty impressive for someone who had a reputation of being a bit of a “meathead.”

In this article from CNBC, Gronkowski lays out some of the details of his financial planning and the advice he gives to other players:

Although he was one of the highest-paid tight ends in the league, the 29-year-old had not touched a dime of his NFL money. As he revealed in his 2015 book, “It’s Good to Be Gronk,” he lived off his endorsements instead.

Gronkowski […] says that as a veteran on his team, there is one piece of advice he would always gives his rookie teammates about managing their money.

“Financially, I just say: Keep it simple,” he tells CNBC Make It.

Unlike many other professional leagues where athletes’ contracts are fully guaranteed, NFL players’ are not. That’s why Gronkowski says he would always tell his young teammates to “get what you need to live comfortably but don’t go crazy with splurging until you feel comfortable in the league.”

When he got his first NFL paycheck, Gronkowski said he put it all in the bank. And he spent his endorsement money carefully too. It wasn’t until recently, after eight seasons of being frugal, that he finally decided to splurge.

While I was unable to find any hard numbers on this, Gronkowski had a $54 million contract in the NFL, and NFL analyst Darren Rovell estimated Gronkowski’s lifetime endorsement earnings at $3.5 million. That equates to somewhere above a 90% savings rate. I’m impressed.

“When I signed my incentive deal last year, my friend had a chain and I was like, ‘Dang, man, that’s a nice chain,’” Gronkowski told entrepreneur Maverick Carter on an episode of UNINTERRUPTED’s “Kneading Dough” last year. “I never had jewelry in my life. He let me wear it last year at a party and it made me feel good.”

After a successful 2017 season that included a Super Bowl appearance, Gronkowski decided to treat himself and buy a nice chain.

So, Gronk’s one big splurge for himself after playing in the NFL for seven years, having a huge contract, and appearing in (and winning) several Super Bowls was to buy himself a necklace.

The article goes on to give a big nod to another NFL player, Kirk Cousins:

Gronkowski wasn’t the first or only well-paid NFL player to be open about his frugal spending habits. Minnesota Vikings star Kirk Cousins, who is the first quarterback to have a multi-year, fully guaranteed deal and so can count on $84 million coming his way, nonetheless drives a dented GMC Savannah van that he purchased from his grandma for $5,000.

Cousins also revealed to GQ that, after being drafted into the league in 2012, he and his wife still spent their summers living in his parents’ basement to save on housing costs.

In a 2016 interview with the Wall Street Journal, Cousins explained, “You don’t know how long you’re going to play. You’ve got to save every dollar even though you are making a good salary.”

There are a lot of valuable lessons in these stories. Here are a few of the key lessons that stood out for me that also resonate in my own life.

You can never be sure of your future salary or your future self. Both of these guys nod strongly to the idea that they don’t know what the future holds for their income. All they know is that they’re earning quite a bit now and that they can live quite happily well below that income level.

The same principle applies to everyone. Your future income is never secure. Your future self is not reliable. Instead, you should be looking at your current life and asking yourself if you can live a happy life spending significantly less than your income. Aim for the minimal spending that brings you a happy life and bank the rest for a future when you can’t earn as much. Ideally, you will keep earning a nice income for a while and then you’ll have so much in the bank that you can retire early.

Fancy items don’t bring lasting happiness. An NFL starting quarterback on a multi-million dollar contract drives a used GMC Savannah he bought from his grandmother. Why? A fancy car won’t bring him lasting happiness. On the other hand, financial security will bring him that happiness.

Gronkowski spent several years in the NFL, earning millions in salary, before deciding to splurge on a chain. Why? He realized that he was going to be a lot happier in life knowing that his whole future was taken care of rather than owning a bunch of stuff.

Stuff doesn’t bring happiness most of the time. Money itself doesn’t bring happiness. What does bring happiness is good relationships, life-affirming experiences, challenging yourself, and building a strong foundation upon which those things can rest.

When you do splurge, give it some thought and make it meaningful. As noted earlier, Gronkowski spent a long time thinking about buying that chain as a splurge of his. He didn’t just go out and buy it for giggles. He considered it carefully and when he made the purchase, it wasn’t disruptive to anything in his life and it was something he had wanted for a long time.

That’s a good model to adopt when it comes to splurges. If you decide that you really want something that’s not a necessity, give it time. Let it rest and decide if you really do want it. If you give it reasonable time (and I don’t just mean “five minutes”) and decide you do want it, then do a bit of homework and indulge. Make it a meaningful, powerful indulgence that provided some blissful anticipation and is something that you’re going to really enjoy.

Be spontaneous with your time and energy, not your money. Many people balk at being financially responsible because they don’t want to lose a sense of spontaneity in their life. The problem with that is that financial spontaneity is just one flavor of spontaneity – you can be spontaneous with your time and energy without throwing your money to the wind.

Go run across the yard barefoot. Make an amazing dinner that your family didn’t expect. Spend an afternoon reading a great book instead of scrubbing behind the toilet. Tell someone you love them.

Gronkowski built a bit of a reputation in his NFL career as being a bit of a goofball and a partier, but if you look closely, it was clear that he was just spontaneous and gregarious with his time and energy, not his money. That’s a great approach to have with your life.

There are infinite ways to be spontaneous in life without just spending money frivolously.

Keep things simple. Financial planning doesn’t have to be complicated and loaded with decisions. If you have two household incomes, bank one and live off the other one. Automate as much of your saving and bill paying as possible. Invest in target retirement funds if your goal is retirement. Automatically put a little money each week into a savings account for an emergency fund – just set this up once and let it sit. Buy late model used cars and drive them for many years. Live in a relatively small house or apartment. Buy store brands. This doesn’t have to be complicated or difficult.

In other words, channel your inner Gronk.

Good luck.

Read more by Trent Hamm

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