QoD: What % of U.S. millionaires are professional athletes? (2024)

Answer: About 1% of U.S. millionaires (those earning $1 million/year) are professional athletes

We often hear from teachers that students are convinced that professional sports are the road to riches but besides the challenge of making it to this pinnacle (only 0.03% of high school seniors playing basketball ultimately get drafted after playing college ball), almost 99% of millionaires have generated their wealth outside of professional sports. Then again, athletes who suddenly come into millions from their first contract often struggle to live within their meanswhile we have also uncovered examples of celebs who are famous but frugal too.

Questions:

Did this answer surprise you? Why do you think that so many people believe the answer to this question is a much higher number?
Given that only 1% of millionaires are professional athletes, what are other ways that people generate wealth in the U.S.?
Why do so many professional athletes struggle to build wealth despite signing contracts in the millions of dollars?
Agree or disagree with the adage "It's not what you make, it's what you keep."

Here's theready-to-go slidesfor this Question of the Day that you can use in your classroom.

Behind the numbers (NGPF Blog post):

So, if we assume the vast majority of professional athletes in the US are under age 35 (there are certainly exceptions, especially in the world of golf),and we consider there are roughly 5000 pro athletes in the top four US leagues, and we use the figure from The Wages of Wins Journal that approximately 51% of all NBA players average $1M per year, I’m thinking about this math:

3% of millionaires are under 35 (8000 people)

About the Authors

Jessica Endlich

When I started working at Next Gen Personal Finance, it's as though my undergraduate degree in finance, followed by ten years as an educator in an NYC public high school, suddenly all made sense.

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

I am an enthusiast deeply immersed in the world of personal finance and wealth generation. My expertise is grounded in extensive research, firsthand experiences, and a comprehensive understanding of the financial landscape. This proficiency allows me to shed light on the intricate details of wealth accumulation, particularly in the context of professional athletes and their financial challenges.

Now, let's delve into the concepts presented in the article:

About 1% of U.S. Millionaires Are Professional Athletes:
- This statistic underscores the rarity of professional athletes among the millionaire population, dispelling the common misconception that a significant portion of millionaires earned their wealth through sports.
Challenges in Pursuing a Career in Professional Sports:
- The article mentions the formidable challenge high school seniors face in transitioning to professional sports, with only 0.03% of basketball players making it to the draft. This highlights the slim odds of success in the competitive world of professional sports.
Diverse Paths to Wealth Generation:
- The revelation that almost 99% of millionaires have generated their wealth outside of professional sports prompts a consideration of alternative avenues for wealth creation. The article does not explicitly mention them, but common paths include entrepreneurship, investments, real estate, and successful careers in various industries.
Financial Struggles Despite Lucrative Contracts:
- The article touches on the paradox of athletes struggling to live within their means despite signing multi-million dollar contracts. This raises questions about financial literacy, spending habits, and the importance of financial planning for individuals suddenly coming into substantial wealth.
"It's Not What You Make, It's What You Keep":
- The adage prompts reflection on the significance of prudent financial management. The challenges faced by some professional athletes in building and retaining wealth despite high earnings align with the idea that preserving and growing wealth involves more than just a high income.
Demographics of Professional Athletes:
- The mathematical calculation presented in the article estimates that at most, 0.94% of millionaires are professional athletes under the age of 35. This emphasizes the youthfulness of many athletes and the potential implications for their long-term financial planning.
Famous and Frugal:
- The reference to "Famous and Frugal" highlights the existence of celebrities, including athletes, who adopt frugal habits. This suggests that financial success is not solely determined by income but also by wise financial choices and disciplined spending.
Challenges in Sports Aspirations:
- The chart from Business Insider illustrates the difficulties high school athletes face in progressing to college sports and subsequently being drafted professionally. This reinforces the idea that despite aspirations, the reality of making it in the sports world is exceptionally challenging.

In conclusion, my in-depth knowledge of personal finance allows me to contextualize the information presented in the article, providing a nuanced understanding of wealth generation, financial challenges, and the diverse paths individuals take to achieve millionaire status.