You gotta dream. After all, who says your son isn’t the next Michael Phelps or your daughter Simone Biles?
Parents of child athletes are willing to bet big on their kids. In fact, a new survey from TD Ameritrade found that 20 percent of parents of elite athletes spend more than $1,000 a month on their sports activities. While many cut back on vacations, they confessed to taking on debt and putting off saving, banking on the hopes that sports will lead to a scholarship, Olympic Gold or the major leagues.
Reality is, there’s quite a bit that can be done with that kind of money.
Invest in yourself
Much as you love your children, remember your agenda. “Build your emergency fund, pay off debt,” says Mark Carruthers, a certified financial planner in Congers, a hamlet in Rockland County.
- Invest elsewhere
Put that money in a 529 plan for college. “Invest in their brain instead of just their body. A second language is worth the investment, as is learning to code,” says Joseph Templin, CEO of Lamp of Castle Holdings, a financial services firm in upstate Clifton Park. “Balance hope with reality.”
Roll the dice
If you feel like dreaming big, and you have a sound investment base — savings for emergencies, college and retirement — you can always use some money to bet on the investment version of Olympic gold.
AngelList allows you to invest in startups and what are called syndicates, which are groups of startups, kind of like a mutual fund for small tech companies, says Bryan Clayton, CEO of GreenPal, an Uber-like service for lawn care based in Nashville, Tennessee.
“Companies like Uber and Airbnb started on AngelList. While every company won’t be a hit, if you had invested $1,000 per month back in 2010, you could have invested in Uber at a $5 million valuation, which is now worth over $60 billion,” Clayton says.
Just remember, the majority of those promising-sounding companies, like so many talented child athletes, won’t ever get to stand on the winners’ podium.