LeBron James and I have a lot in common. We were born 3 days apart on separate sides of the same state, we both enjoy basketball, and compound interest can make both of us wealthy.
I’ve been a Cavs fan as far back as I can remember (I have periwinkle colored gear to this day) and have closely followed LeBron’s career through the years, all the way back to the OHSAA state tournaments in 1999-2000 when I watched him lead his very talented high school team to a state championship (just a month after I led my freshman team to a conference championship….but I digress). I was bummed when he and his best friends at St. Vincent – St. Mary lost the championship our senior year. I was ecstatic when the Cavaliers won the draft lottery and therefore the right to draft him. I was in the arena and went crazy when LeBron dunked so hard it almost broke the Celtics in the 2008 playoffs (sadly the Cavs lost in a close game 7). My heart was broken in the summer of ’10 when he left (I didn’t burn a jersey). I tracked airplanes and conspiracy theories in 2014 and rejoiced when LeBron came home. I achieved basketball fan bliss when the Cavaliers won the title in 2016.
I still follow his basketball escapades and have certainly taken notice of his financial successes. LeBron has diversified very well. He has massive sponsorship deals, owns stakes in many businesses, and is a great philanthropist. His annual salary from his day job isn’t too bad either, and there’s speculation it is a smaller percentage of his overall earnings each year, maybe around 1/3. I wondered how long it would take LeBron to become a billionaire (yes, with a ‘B’) if he would have just chosen to live off of endorsements and invested his salary each year. LeBron has been in the NBA for 15 years, so that’s 15 years of saving. The S&P averaged about 8.67% in annualized returns since he came in to the league so I mimicked that return. The result? After 15 years LeBron would have around $361,954,031.00 banked. If he stopped contributing right now and left it invested it would take another 14 years for the power of compounding to make him a billionaire at that rate. A billionaire by 48 from only basketball money? That’s pretty good.
You and I are probably going to have to move those decimal points up a few spaces, but these principals still hold true for you and I. If you need help making sure you’re investing in a way that helps you, schedule a meeting. You don’t have to make millions to become financially independent and you don’t have to be a star athlete to get help from a professional financial advisor.