Broke or Wealthy? | Austin Ekeler First $1 Million GQ Sports

Austin was an undrafted free agent out of a division two school. His chances of making a roster were slim to none, but he beat the odds and impressed the coaches enough to put him on the 53 man roster for the San Diego Chargers.

He signed a 3 year deal worth $1.66 million with only a $5,000 signing bonus. He plays running back which is a position most prone to career ending injuries. Even the $1.66 million was not guaranteed. This is a big reason why athletes go broke. Austin signed for $1.66 million, but if he got hurt in his first season and got cut in his second or third season which happens all the time, then he would only make a portion of the contract in his entire playing career.

This is the key to understand if you are an aspiring athlete: you only need to get rich once. Austin just got paid which means he’s already rich. After taxes and agent fees, he’ll have somewhere around $15 million in net income in 4 years. $15 million. He doesn’t need to get anymore rich in order to live an amazing life. As long as he invests his money well throughout the next four seasons, he’ll never have to worry about money again.

I’m so happy with Austin. He gets it better than any other athlete GQ has interviewed. He already has 17 units which he attained with only $800,000. I’m so glad they interviewed Austin for this series because a majority of their interviews are popular first round picks or guys who were going to make a lot of money. But Austin wasn’t guaranteed anything and he’s providing the road map for a lot of guys like him: undrafted and probably going to have a career less than 5 years.

With a $800,000 down payment, my guess is he is operating a portfolio of around $3.2 million. With 17 units, that would put the average unit at around $188,000. Given he and his mom lived in rural Colorado, my guess is the units and buildings are really nice with that price point. Over the next four years, if he invests his money in real estate, my guess is he could have a portfolio with 250 units valued at nearly $60 million by December 2024.

Let’s assume his career ends in December 2024 after his contract is over. He will have around $15 million invested in a cash flowing asset. Let’s assume a safe return of only 5% cash on cash return. He will be making $750,000 per year in cash flow. Three quarters of a million dollars every single year for the rest of his life. And that’s not even touching the principal.

He mentioned his mom is an agent and they’re buying off-market deals so my guess is his cash flow is actually closer to 8% per year from buying better than average deals. Which would be $1.2 million per year in cash flow for the rest of his life. $100 grand per month for life. That’s the value of investing.

If his $60 million portfolio appreciates at 2% per year for the next 60 years, basically by the time his days may be over, his $60 million portfolio in 2024 will be worth $197 million in 2084.

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Topics:
Austin Ekeler
GQ Sports: my first million
personal finance
how do athletes go broke
my first million reaction
my first million gq sports
how to invest money in real estate