But behind the flair lies the untold story: the pressures of fame, the silence after retirement, and the hard financial lessons every African player must learn. We recently saw an interview with Okocha by the Long Form with Sanny Ntayombya podcast, where he graciously shared some very valuable insights in Personal Finance and Investment which we want to share with you in this article. These lessons will not only be useful for footballers and athletes in general, but also for every African who is on the journey of building wealth and breaking the cycle of poverty.
Below are some excerpts and learnings from the Interview.
On the Nature of the job and Life after Football:
"The biggest challenge athletes face is the short nature of their jobs. No pension, you are basically your own government... I realized early that real life starts after football (soccer). The glamorous life is difficult to sustain after career".
The same reality applies to athletes in general, artists, movie actors, skit makers, content creators, and many other jobs today. They might look glamorous with fat cheques, but are mostly short-lived and would require the actors to "innovate or die", fade away. It is usually difficult for many of them to realize this reality early, but the earlier they do, the earlier and better they can plan ahead and begin to make investments that can sustain them for a long time when the spotlight is off.
On Investment Choices:
"I said to myself that there is no need to start taking risks or getting involved in businesses I did not understand or in control of, because people bring offers to you, all sorts to you, which ripped off a lot of players. and there was no need for me to be greedy. I survived because I was not greedy. I said if I buy a property I can see my property, even if I'm unlucky and the property burns down I still have my land. So that was the business I chose to go into, Real estate property. So I kept on buying properties until I stopped playing football (until my career ended)". This choice saved Jay Jay from getting his hands burnt trying all sorts of business and investment proposals that were thrown at him.
A lot of us face similar realities today, being bombarded with all sorts of investment offers, which are mostly unfamiliar to us. As Warren Buffett says, "when investing stay within your circle of competence". Invest in what you understand. The best you can do is to begin to increase your circle of competence, then the more you deeply understand more investments or businesses, the more you can spread your investment into them. Essentially before you invest in any business or instrument, seek first to understand it deeply; seek for knowledge first, otherwise stay away from getting your hands burnt. And of course, do not be greedy. Stay away from Ponzi schemes. If it is too good to be true, it probably is.
On Realities of Investment Choices vis a vis Lifestyle:
"It hit me when I first bought my commercial property back home in Nigeria and in England. You buy a property you paid huge money for but the income it generates in a month is not much. I realized that for me to go home every month with $10,000 I needed to invest millions of dollars to get that... I realized around 23 years old that I needed to plan for the future".
Two key take outs from here:
- To attain certain levels of cash generation or cash flow from your investments you need to be realistic about the initial cash outlay or investment required to achieve such yields. Some people think that they can get rich quick from just one or two investments. But it does not work that way, and you would be better off sticking to your realities than fantasies. Also do not confuse capital or asset appreciation from the cashflow generated by that asset. Jay Jay realized that to generate regular income to sustain his lifestyle post retirement required millions of dollars of investments to generate that regular cashflow. It is sort of like application of Reverse Engineering. If your lifestyle after retirement requires say $3,000 monthly to sustain it, do you have any idea how much investment you would need to build in order to constantly deliver that amount conservatively in monthly cashflow or $36,000 annually by the time you retire? If the investment yields 5% per annum, to generate $36,000 annually (apart from capital or asset appreciation) implies that you need an investment of say $720,000 and above. Then you can work earnestly to achieve that.
- Start investing early so that you can start benefitting early from Compounding. Albert Einstein is famously quoted as saying, "Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn't... pays it". It is the process of earning returns on both your initial investment and the accumulated interest, a phenomenon also known as the snowball effect.
On Investment Strategy:
"My investment strategy: My contract money was fully for investments, Match bonuses were enough for me to live, endorsements were enough for me to buy toys (cars, watches, etc.) and leisure. It's all about putting a structure in place. And if you are not winning enough matches then back pedal, it's not every month that you go shopping, or buy a new car every year."
We can all learn from Jay Jay's strategy and put structures in place to maximize the potentials of our earnings and protect us from ourselves and our excessses. Some people do it in percentages- for every pay that is earned x% goes to living expenses, y% goes to giving, z% goes to investments, etc. Once the structure is in place, have the discipline to stick to it no matter what happens. Your future self would be grateful for it.
On managing "Black Tax" or Family/Community Dependents:
"I survived/navigated the "Black tax" (family and community dependents) by incorporating them as part of my structure, investment and plan. But make it clear to them that they have a limited time, and in setting them up they need to make it count. They must not fail. But it is not everybody that utilizes well, but just make sure that at least 80% are okay... They would take some of the burden from you when you retire... What defines a man or what sets you apart is your ability to take decisions. Even in you are investing in charity organizations there is always limits, so you have to know where the boundary is... It is in my interest to protect my own nuclear family because I do not want them to go through what I went through. So I had to be able to set boundaries in helping extended family... I cannot keep suffering because a family member decides to be irresponsible or independent".
This is self explanatory. Different people manage this situation differently. There are no right or wrong answers, but just be careful that your decisions do not make you end up in regrets later in life.
Final Words:
"Dreams do come true, there is no limit to what you can achieve if you believe. But it will never be rosy, you will go through difficult PHASES, but that is when you learn and grow. Don't be scared of trying, there is a saying that "a foolish doer will always out do a great thinker". Always believe in yourself, stay disciplined, be willing to sacrifice and pay the price for a great future".
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