Sponsor uses Nedbank Cup to educate and empower footballers in finance

Demystifying business, making financial advisers accessible and the idea of approaching them less intimidating, and seeing money as an extension of their playing regime, is how money guru Frank Magwegwe advises footballers to make their earnings from a short career work for them.

Magwegwe co-authored Nedbank’s 2023 NedFin Health Monitor Report. Among its fascinating, concerning findings were that 70% of South Africans could not pay their bills monthly, 42% said they had too much debt and 51% said they were ashamed of their financial situation.

As the bank seeks to align the 2024 Nedbank Cup with a focus on financial wellbeing, education and product propositions relating to its MiGoals Plus account, Magwegwe took time to discuss how footballers, many of whom have fallen on hard times after their short playing careers, can make their earnings last.

Defending champions Orlando Pirates beat Mamelodi Sundowns 2-1 in a stirring dream final of the 2024 Nedbank Cup at Mbombela Stadium on June 1.

Magwegwe, a strategy professor at the Gordon Institute of Business Science (Gibs) and financial wellness expert, said Nedbank takes a new approach to advising footballers where it seeks to harness the natural discipline gained in their playing careers and equate money matters to footballing ones.

“We realise three main things,” Magwegwe told TimesLIVE. “The first is footballers are human beings who generally, in South Africa, no-one helped them learn about managing finances growing up.

“The first time someone starts engaging with money [when] they are playing soccer, often they get these big amounts and all of a sudden make these money mistakes.

“The second problem is the pressure players come under because of the role they occupy in society that leads to spending — they must drive a Golf GTI, be on their social media dressed to the T.

“Third, they are vulnerable to people who prey on them, who know these guys earn lots of money and are not financially knowledgeable.

“As part of a SuperSport [TV channel] course I was involved in for athletes, a Sundowns player in his mid-30s told me when he started playing he was scammed for R300,000 by people telling him they were going to multiply it and do this and that.”

Developing an awareness of financial matters and viewing financial advisers as on a par with coaches or fitness trainers in their careers is how Magwegwe advises footballers to avoid such situations.

“The starting point of being able to change behaviour is awareness. Awareness that, ‘I didn’t go through financial education, I really don’t know much, I don’t know what a share is, a unit trust; I don’t know how bitcoin works — I hear people make lots of money on it’. We say, ‘Ask questions so you don’t get scammed’.

“The next point is: a soccer player cannot make it into the PSL if they are not disciplined. You’ve got to go to training, follow the diet and you get that input from the club’s dietitian; of course you must follow what the coaches are saying. We say, ‘Look at the support you’ve got in your club; what support do you have around finances?’

“Third, we say, ‘You need to be invested, just as you invested in your playing career’. You need to be deliberate to say, ‘I need to look for a good financial planner, like the club has given me a dietitian’.

“I haven’t mentioned products because that’s secondary — we need them to know it’s OK to get help, to say, ‘Financial wellness is an ongoing journey, I need someone to walk that journey with me’.”

Ordinary working people expect they will have a stable salary, increasing over time with advancement, until they retire at about 60. For footballers it’s a 10 to 20-year career, then the money has to last or be well invested and there is pressure to make the right decisions and trust the right people. Magwege said Nedbank’s advisers want to package financial advice to footballers in a relatable manner.

“Nedbank tried to demystify the world of finances and link them to the world of a soccer player.

“First, the idea of smart goals. A goal must be specific, realistic, achievable and time-bound. A footballer’s goal is he needs to be in the first team — there’s competition to be a regular. There are certain things he needs to do for that — training , eating well, sleeping well. They need goals on boundaries — how much sleep they need, do they say no to certain types of food?

“We tell players, ‘You are already disciplined; you set goals’. We say money is just one part of your playing career. Just like you set goals for playing, you need to set goals for money, as simply as: what percentage of income can I spend?

“A start is to say, ‘I earn X, am I disciplined enough to automatically put 10%, by a stop order, into a linked savings account? It can be 5%. That’s how [we] try to make it simple and with the MiGoals account one is able to do that.

“Second, to set a smart goal you need a compelling view of the future. You need to accept you want to be comfortable in retirement. A way to do that is to paint a picture of what will happen after your playing career — will you have a fast-food franchise or will be like Brian Habana [former Springbok who is co-founder and head of business development at Paymenow Group], in corporate as a director of a company?

“The third thing about goals is habit. No-one needs to tell us, ‘Brush your teeth, dress OK’. We ask players, ‘What financial habits have you developed and are those habits working for you?’ Because the habit of sleeping well before the match, not boozing with buddies, those serve players well on the pitch. Can you lend some of those habits to finances?”

Just like footballers experience ups and downs on the field, and have to not become too excited at a win or overly depressed at a defeat, finances have highs and lows.

 “Can we acknowledge the role emotions play in our lives?” Magwege said. “You can overdo the excitement of winning a match and then it’s got negative consequences.

“When you lose, like that thrashing Kaizer Chiefs got from Mamelodi Sundowns a few weeks ago, you are angry and frustrated and feel you let yourself down, but you need to pick yourself up for the next matches.

“Just like that, we have financial successes and setbacks. How do you manage them or recover? You have to come up with a plan. Who hasn’t overspent, bought things they didn’t need or taken a loan, then said, ‘What did I do with that money?’. Acknowledge these things happen.

“The most important thing is to be aware; recognise: ‘I get excited on payday, I go home not only with Debonairs but also FishAways, go to News Café until early morning — maybe I shouldn’t do that’.

“As a soccer player, ask, ‘What do I need?’ You are privileged to have people who show you videos in training of what you did and where you can improve. I call those accountability partners — coaches, fitness trainers, analysts.

“You need the same support for finances. A financial planner can look at your bank statements, give you feedback just like a coach would, and it goes to the point of trust — you’ve got to find someone you trust as a financial planner.

“Third, just like they make time for training to be the best player, they need to pause once a month and say, ‘I’m now putting time into thinking about my money’.”

Premier Soccer League footballers (about 400) are naturally disciplined — what has often been lacking is the guidance to turn that discipline to their finances. Clubs are often at fault for paying salaries to young players who are from humble backgrounds, who have been thrust into the spotlight and high life, then leaving them to their own devices. Magwegwe said Nedbank has begun working with clubs on financial education programmes.

“SuperSport came to Gibs and we did courses on personal finance for athletes. So the administrators are starting to be aware of the need.

“You can also see the intention of Nedbank in saying there is no way we can miss an opportunity of highlighting money in this exciting environment of the Nedbank Cup. Nedbank has a proposal to the PSL about financial education for players. As part of this we have gone to the clubs and offered them the use of our financial advisers.”

Magwegwe said the 51% of South Africans who are ashamed of their finances say they “don’t work with financial advisers because they don’t want them seeing into their situation”.

“Everyone makes mistakes — we need to help people know not to be hard on themselves because if we don’t, people who need it won’t go to a financial adviser.”

As for the perception that if you earn too little, a financial adviser is not for you, Magwege ends with: “Do you earn too little to go to a GP? No-one earns too little to go to a financial adviser.”