Advising U.S. athletes abroad

The journey to advising athletes living abroad on their financial planning matters, started with my own experience living abroad. Playing in a lower division, I didn’t face some of the same complex issues high profile athletes face, but it gave me a solid understanding on some of the financial pitfalls and issues to avoid for US citizens living abroad.

Below is a list of some of the common mistakes and opportunities to be aware of.

Investing in country of residence

Investing in your country of residence or surrounding countries directly may seem like a good opportunity, but comes with a unique set of challenges for American citizens to be aware of. US shareholders of foreign corporations may be deemed to own shares of a Passive Foreign Investment Company (PFIC). The tax and reporting requirements for owning a PFIC potentially makes them a poor investment for US citizens. US citizens are usually better served by owning lower cost US-registered investment funds that have exposure to foreign markets. While we advocate to keep a diversified portfolio, historically speaking US markets have outperformed and have provided more stability than foreign investment markets

Failure to understand and plan for taxes

The US is one of the few countries, which taxes its citizens on worldwide income. Regardless of residency, if you maintain US citizenship you must still file a tax return with the IRS. Assets held outside the US have more stringent reporting requirements, which is another reason it makes sense for US citizens to keep the US as their primary investing base. Athletes are generally in high marginal tax brackets, which can exceed 50% at the highest levels in some countries. Paying close attention to craft an investment portfolio that minimizes tax burden is extremely important.

Planning for life after the game

It’s common for athlete’s playing abroad, especially in Europe, to end up playing and living in multiple countries. Each of these countries might have separate tax treaties with how US investment income is taxed. This is further reason to maintain a home investing bias towards the US. A majority of athletes will return to the US after their playing days are over, and having assets spread across multiple countries will make the transition home and eventual spending of the investment assets more complicated. Maintaining home base in the US provides an easier shift from the accumulation to spending phase in an athlete’s career.

Currency Mishaps

Maintaining investments in local currency adds to an athlete’s currency exposure, if their long-term plan is to return to the US. Let’s think about a hypothetical scenario where an athlete playing in the UK keeps 100% of their wages paid in GB Pounds in a UK bank account over their career. Let’s assume the player retires in 10 years and decides they want to move back to the US. There is no guarantee what the value of the US dollar versus GB Pound will be at that time. If the timing of that happened to lineup with a scenario we faced the last few years with the dollar appreciating heavily versus the pound, the athlete could be left with a substantial loss in spending power when attempting to return home and convert their GBP to US dollars. If an athlete is paid in local currency and they should consider converting a portion of their wages back to US dollars at regular intervals to systematically reduce their foreign currency exposure over time. This would be similar to a dollar cost averaging investment program.


In general US financial institutions and markets are more heavily regulated and have more layers of investor protection such as FDIC and SIPC insurance. I lived for 18 months in Madrid, which by most measures is a pretty safe and secure city. I woke up one morning and found a negative $700 balance in my US checking account after I had swiped my debit card at an ATM machine around the corner from my apartment a few days before. I immediately reported to my US banking institution and they refunded all the fraudulent charges after verifying my account information.. There are also several large US banks and credit card issuers that have zero transaction fee credit cards and relationships with foreign subsidiaries.


Most athletes will have certain insurances provided by their employer (team). For high profile athletes, it is also common that the team will carry a life insurance policy on the player for the length of their contract to protect the team. However, this does not protect the athlete or their family. Most athletes moving abroad will maintain strong family and financial ties to the US. Certain US insurance carriers will still underwrite policies on US athletes living abroad depending on country of residence and the athletes travel schedule. This can be beneficial not only in terms of protecting the athletes family, but also for providing a long-term investment-planning tool. For a young athlete with high earning potential, permanent insurance if utilized properly can be a great tool for investment diversification and tax deferral.

The Importance of a Team

The athletic component itself of being a professional athlete is extremely demanding. When an athlete makes it to the next level this becomes even more challenging when combining the athletic component with all the off the field responsibilities. This is especially true in today’s 24/7 news world where every move and comment is under a constant spotlight. Whether fair or unfair, it seems the media is just waiting to capitalize on any slip up. Having a trusted team is vital to remove this pressure from the athlete and allow them to focus on their on the field performance. For those athletes playing team sports, this will feel like a natural fit as those athletes usually understand that being surrounded by a great team will elevate their own performance. The athlete’s family will usually be a key filter as they naturally have the closest relationship to the athlete. However, the family is rarely experts in financial matters and there have been several high profile instances where athlete’s family members made costly tax or investment errors that ran afoul of the law. It is important with the complexity of the financial matters that overseas athletes face that they build a trusted team of experts to help them navigate these demands.