Introduction

I still remember my time as a non-scholarship varsity wrestler at the University of Virginia — I never got anything beyond a modest per diem, and it was Army ROTC that really helped keep my finances afloat. The idea of earning real money through Name, Image, and Likeness (NIL) deals would have blown my mind. Heck, if NIL had been around back then, maybe I’d have switched my major from Mechanical Engineering to “Dollars!”

These days, college athletes have an unprecedented opportunity to monetize their personal brand, but with that opportunity comes a set of challenges. In this article, we’ll explore:

1. What NIL is and why it’s a game-changer for college athletes.
2. How not to exploit college athletes when offering financial guidance or services.
3. Ways to make NIL money last, with a look at whether annuities are a useful tool — or if other options might be better.
4. Why personal finance education should be mandatory for student-athletes to truly set them up for long-term success.

(For a deeper background on NIL, see Investopedia’s explanation of Name, Image, and Likeness.)

1. Understanding NIL: A Brief Overview

Name, Image, and Likeness refers to an individual’s legal right to control and be compensated for the commercial use of their personal brand — this includes a student-athlete’s name, photograph, signature, nickname, or any other forms of personal branding.

• Why It Matters
  In June 2021, the NCAA changed its long-standing rules, allowing student-athletes to earn money from external sponsorships and endorsement deals. This shift means an athlete can now profit from autograph signings, sponsored social media posts, local and national TV ads, and more.
• Challenges for Athletes
  Many college athletes are teenagers or young adults with little experience in financial management. They must understand contract law, marketing, and taxes — all while juggling academics, training, and everyday life.
• Mandatory Personal Finance Course
  If schools truly care about the long-term well-being of their student-athletes, they should require a personal finance course. This foundational education can be just as critical to an athlete’s future as physical training or academic study in their major.

2. The Risks of Exploitation

With new earning potential comes the risk of exploitation — unscrupulous agents, financial “advisors,” or opportunistic brands may try to take advantage of young athletes’ lack of financial literacy. Ensuring these athletes receive transparent, fiduciary-level advice is crucial.

• Red Flags
• Promises of “guaranteed returns” without disclosing risks.
• High-pressure tactics to invest in complex or expensive products.
• Limited or vague information about fees, commissions, or surrender charges.
• Best Practices

1. Fiduciary Advisors: Work only with professionals who are legally bound to act in the athlete’s best interest.
2. Clear Contracts: Every endorsement or financial product contract should be vetted by a qualified attorney.
3. Education First: Emphasize teaching the athlete financial basics — budgeting, saving, and tax obligations — before diving into more sophisticated tools.
4. University Involvement: Universities can provide workshops, resources, or require student-athletes to learn personal finance fundamentals.

3. Making NIL Money Last: The Basics

Before evaluating annuities or other advanced financial vehicles, it’s vital that college athletes establish sound financial fundamentals:

1. Create a Budget & Emergency Fund

• Why: Unexpected injuries, changes in playing time, or endorsement deals that dry up can quickly derail finances.
• How: Use a portion of NIL earnings to set aside 3–6 months’ worth of living expenses in a readily accessible savings account.

2. Understand Tax Responsibilities

• Why: Endorsement income is typically subject to federal and possibly state taxes.
• How: Work with a CPA to calculate estimated taxes, ensuring money is set aside or paid quarterly to avoid surprises come tax season.

3. Diversify Income Streams

• Why: Relying on a single sponsor or type of deal can be risky, especially if performance slumps or brand relationships change.
• How: Explore multiple NIL opportunities (e.g., local sponsorships, social media endorsements, appearances), but align them with the athlete’s personal brand to maintain authenticity.

4. Enroll in a Personal Finance Class

• Why: A structured course teaches budgeting, debt management, investing, and more — ensuring that athletes don’t accidentally squander their earnings.
• How: Advocate that your university make such a course mandatory for all athletes, covering NIL strategies and real-world financial planning.

4. Where Annuities Fit Into the Picture

Annuities are insurance products that can provide guaranteed income over a set period — or even for life. While often used for retirement planning, some advisors may suggest them for long-term income stability. But are annuities the best fit for a college athlete with newly acquired NIL money?

Pros of Annuities

1. Guaranteed Payments

• Certain annuities — like fixed annuities — promise a set payout, offering peace of mind that some portion of NIL earnings will continue to generate income over time.

2. Tax-Deferred Growth

• Funds placed into certain annuities can grow tax-deferred until withdrawals begin. This can be a benefit if the athlete expects to be in a lower tax bracket later.

3. Forced Discipline

• Annuities often come with surrender penalties, which can deter impulsive withdrawals — potentially a safeguard for athletes who might be tempted to overspend.

Cons of Annuities

1. Fees & Complexities

• Variable and indexed annuities can have high internal fees, rider costs, and confusing surrender charge schedules. Young athletes risk paying hefty penalties if they need the money sooner.

2. Illiquidity

• Tying up funds in an annuity at a young age can be limiting. College athletes may need flexibility to invest in themselves, start a business, or pivot careers.

3. Opportunity Cost

• Locking capital in a lower-growth product could mean missing out on higher potential returns from diversified portfolios, real estate, or personal brand reinvestment.

Bottom Line: Annuities can serve as A tool (not the only tool) for ensuring some portion of NIL earnings is protected and can generate stable income. However, they are not a catch-all solution and should be carefully evaluated alongside other investment and savings options — especially for athletes who need flexibility.

5. Alternative Strategies & Tools

If annuities aren’t the right fit — or if you want to pair them with something else — consider:

1. Low-Cost Investment Accounts (Brokerage, IRAs)

• For long-term growth, a diversified portfolio of index funds or ETFs can offer higher potential returns and better liquidity.
• Roth IRA contributions, if the athlete has earned income, can be a powerful move for tax-free growth later.

2. Trusts & Estate Planning

• For high-earning or high-profile athletes, setting up a trust might protect assets, preserve eligibility for certain benefits, and outline how funds can be used.
• Parents or Guardians can act as trustees to ensure the athlete’s best interests are maintained.

3. Insurance for Protection

• Disability insurance is crucial for safeguarding future earning potential against injury.
• Term life insurance can be cost-effective if the athlete supports family members or has significant financial obligations.

4. Business Formation & Licensing

• Some athletes create LLCs or corporations to manage branding and endorsements, providing legal protection and potential tax advantages.
• Licensing fees and royalties can be structured to continue paying out over time.

5. Professional Development & Education

• Investing in financial literacy courses, brand-building workshops, or mentorship programs can often yield greater returns than any single product.

6. Making Personal Finance Education Mandatory

No matter how well-intentioned NIL deals may be, a lack of financial education can leave college athletes vulnerable. Requiring a personal finance course is one of the most direct and impactful ways a university can ensure these student-athletes:

• Understand basic money management skills,
• Avoid falling prey to exploitative financial pitches,
• Gain confidence in making informed decisions about NIL income, and
• Build a lasting financial foundation that supports them — even if pro sports aren’t in their future.

When schools truly care about their athletes’ holistic development, mandatory personal finance education should be a priority right alongside academics and athletic training.

7. Balancing Opportunity and Prudence

College athletes in the NIL era face two key realities:

1. They can accelerate their income far earlier than athletes of past generations.
2. They must be strategic and cautious to ensure the sudden influx of cash doesn’t disappear before graduation.

Enrolling in a personal finance course — and leveraging professional, fiduciary advice — can bridge the gap between earning money and making it last.

8. Actionable Tips for College Athletes

1. Work with a Fiduciary Advisor

• Look for planners or advisors who must put your interests first. Verify credentials (CFP®, CPA, JD, etc.) and understand their fee structure.

2. Diversify Your Savings & Investments

• Don’t place all NIL earnings in one vehicle — spread it out to effectively manage risk.

3. Stay Educated & Informed

• Ask questions about fees, liquidity, and timelines. Understand each product before committing.

4. Plan for Taxes

• Set aside funds for estimated quarterly taxes or work with a CPA to avoid a hefty bill in April.

5. Enroll in a Personal Finance Course

• Push for your school to make financial literacy training a mandatory part of your academic program.

Conclusion

Name, Image, and Likeness rules have ushered in a transformative era for college athletes, offering unprecedented earning opportunities. But with great opportunity comes financial responsibility. While annuities can play a role in securing some portion of NIL earnings, they are not the only answer. A balanced strategy that includes:

• Budgeting and tax planning,
• Long-term investment approaches tailored to individual goals,
• Mandatory financial education,
• And ongoing guidance from fiduciary professionals

can ensure NIL earnings truly last and help set up college athletes for success — both on and off the field.