Ian answers: It may seem odd but Gareth Bale now faces a set of financial problems that I do not envy.
Bale is certainly paid a great deal of money. Real Madrid reportedly paid about EUR100 million for the player to move in early September 2013 from Tottenham Hotspur to its star-studded football team. Calculations suggest Bale will be paid around £300,000 (EUR360,000) a week.
Before Bale can reasonably think about how to invest a week of his salary, he would be wise to do a lot of homework. And in this way, Bale is the same as the rest of us – although the sheer size of his pay packet means his financial planning is probably a bit more complex than the average.
Income, expenses, fees and penalties
Along with a high income comes the expectation of a lavish lifestyle.
Bale could choose a modest apartment in an affordable area of Madrid, driving a SEAT to and from practice. Somehow, I don’t think that will happen. For one, peer pressure is a force no doubt encouraging Bale towards grand housing and cars of sufficient quality to make a Top Gear fan drool. But that is not the half of it.
There is likely an agent and other supporters to pay. Friends, family and charities may request financial help and, of course, a certainty in life are tax obligations. I suspect there is a team of advisers looking after Bale’s affairs. He needs to make sure that one of the things these advisers do for him is what you and I need to do for ourselves – make a budget.
Even then, Bale is not in the open (to use a footballing term with which he’s very familiar) – he needs long-term goals.
Like the rest of us, he needs to plan for retirement. Unlike the rest of us, retirement is probably closer for Bale. After all, when he reaches the state retirement age, Bale won’t be playing football professionally. (The oldest player in the 2012 UEFA World Cup was the 38-year-old Greek goalkeeper.) The number of years he earns a wage will probably be shorter than for most of us – and the number of years in retirement probably significantly longer.
There are some well-known examples of the “rich and famous” running into financial trouble later in life, notably footballers Paul Gascoigne and George Best. An often cited-figure from a 2009 Sports Illustrated article is that "by the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce".
Then there is four time FIFA World Player of the Year Lionel Messi who, the BBC reported, appeared in a Spanish court last month over allegations of tax fraud (which he denies).
I presume Bale’s financial team have his affairs well in hand but these examples go to show it’s not always plain sailing, even for the mega rich.
After all this, I haven’t answered your question about how a person would sensibly invest a week of Bale’s wages.
The first sensible thing to do is to clear any debts and put a substantial amount aside for retirement, just as I suspect Bale’s doing. The message here is that even for very highly paid people, there is a need to have good financial habits and plan for the future.
After that, assess how much is left to invest in other ways. It’s probably appropriate to up the financial risk when investing this sum and have a bit of fun on the financial “field”.
While I don’t envy Bale’s financial planning headaches, I wouldn’t mind having them if it meant I could play football for a living.