If you are like me, every time I turn on the TV and watch any sporting event (whether I played it or not) I say to myself “I totally could have gone pro!” (lol, right). Doesn’t matter which sport it is, I sit on that couch and I’m convinced that in a few short weeks I could be ready for the next event. I say this because I see athletes living their best lives – wearing the coolest gear, traveling all over the world, doing what they love.
Being a “star” junior varsity singles tennis player, I got first-hand experience in how hard it is to succeed in a sport where everything depends on you. While our competition was nowhere near pro (obviously) it was a great example of how dedication, consistency, and perseverance can deliver incredible results. With Wimbledon in full swing, I had a look at the ever-growing winner’s pot, which currently pays the winners, both male and female, over $3,000,000 each. That’s a lot of green! And coincidentally made me seriously green with envy looking back on my unearned athletic success.
The Cost of Getting To The Top
As I picked up an old racket for the first time this spring, it got me thinking about what type of investment a top tennis player makes in themselves to be able to perform at the highest level. Being a member of team Zoe, and understanding the value of data and research, I decided to look a bit deeper.
Now, as I ventured into this research, I found a few costs that were slightly different to mine – while I took the school bus, used a school racket, and had no tennis lessons, a top tennis player is looking at expenses including a tennis coach, physiotherapy, fitness coach, nutritionist, and travel accommodations. Somewhat different! These expenses add up to hundreds of thousands of dollars: $490,000 per year to be precise (to see how we got to this number, check out our methodology at the end of this blog).
Now doing some not-so-simple math, we calculated that this $490,000 is approximately 16% of the Wimbledon winner’s pot i.e. a star like Roger Federer is investing 16% of his total Wimbledon winnings per year, to get the trophy. And let’s not forget that most pro tennis players will NEVER win that pot!
This got me thinking: if professional tennis stars invest 16% of their winnings in themselves to earn that Grand Slam check, what would happen if I invested 16% of my income… Could I be a Wimbledon winner?!
Cash out like a tennis star
Now while our chances of reaching that grand stage are slim to none, we have a better option. We can cash out like a tennis star by simply watching tennis on the sidelines and letting our money work for us. How? Compounding interest!
If you invested 16% of your $100,000 salary each year in the S&P 500, over the course of a 30-year period, you would walk away with approximately $3.6 million. You would essentially be holding the Wimbledon winners check!
Now, of course, this theory has its flaws – grand slam winners don’t train for 30 years in order to win one big paycheck – but we can use it as inspiration to instill a habit of investing in ourselves like the pros do.
First, I’d like to thank…
Imagine what you’d say to the crowd holding that $3.6 million check. I think mine would start with “I would like to thank Coach McFadden for loaning me a racket all those years ago…”.
16% is what the pros invest in themselves and look how well that pays off. When you do the math, you’re closer to your Wimbledon title than you thought!
- Total expenses per year for a professional tennis player from the age of 21 to reach a grand slam: £1,224,000 in 2015
(Costs are estimates, and do not take into account any prospective sponsorship costs or time-out due to injury.)
- This translates to $1,852,768.8 in 2015
(based on May 2015 exchange rate of 1.5137)
- $1,852,768.8 in 2015 = $1,945,407.24 in 2018
(based on the combined inflation rate of 5% from 2015 to 2018)
- Assuming this $1,945,407.24 is the cost to reach all Grand Slams, we divide by 4 to get the cost for just one Grand Slam, Wimbledon = $486,351.81
- I.e. total cost per year to get to Wimbledon is $486,351.81
- Wimbledon prize money = $3,033,225.00
(using exchange rate 22 May 2018)
- Money invested to earn prize money = 486,351.81/3,033,225 = 16.03%
(0.16*100,000) = $16,000 invested per year
Average annual return of S&P 500: 10.6% (if you want to know how we got this, feel free to get in touch).
$16,000 invested each year at 10.6% p.a. for 30 years = $3.59 million