I could win Wimbledon… what?!
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
*All investing is subject to risk, including the possible loss of the money you invest. **The projections or other information generated by Zoe Financial, Inc. regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.