Arik Armstead: "Insuring" His NFL Career
Q: How has being on a strict allowance helped you stay smart with your money?
A: Being on a strict allowance has helped me a lot early in my career. I think that establishing a budget and training yourself to stick to it is the most important thing a young athlete can do financially. Creating good spending habits is key for young athletes because it is hard to break bad spending habits once you have been living that lifestyle. Once you have been living a certain way, you get comfortable and also people around you expect you to live a certain way. When you have to change that it can become a pride thing.
Q: How are you on an allowance in the first place? You’re a grown man living on your own who was recently taken in the first round of the NFL… was it something your people structured to make you focused on football or something you personally sought out?
A: My financial advisor and I came up with my monthly budget. We took a look at my contract and what I was going to be making over the next couple years, then we looked at my expenses and came up with a comfortable amount for me to live off of monthly. This monthly amount is sent to an account that I use for day-to-day transactions, which is beneficial so I don't have access to unlimited funds.
Q: Growing up, what are some things your parents instilled in you in terms of being financially smart?
A: Looking back at my youth and how I learned about finances, it's easy to see how uneducated people are about finances nowadays. I was raised by educated parents but there were things they didn't know about finances and couldn't teach me. I think this is a position many athletes find themselves in, trying to navigate a financial world while not having the knowledge to maneuver through it. It's on us to understand the importance and educate ourselves.
Q: Did having a father and older sibling who were involved in sports help prepare you for what you may face from the money side in sports? What are some lessons you learned from being in that environment from a young age?
A: I have been blessed because I'm in a unique situation. I have been around professional athletes my whole life. My dad trains professional basketball players, and I have seen and heard the good and bad of athletes and their finances. It's one thing to hear and see stories about people you don't know, but seeing them happen to people you know has another impact. It has taught me that anyone can go broke and the only way to stop this phenomenon is to educate myself and learn from others' previous mistakes. Anything I learn, I am quick to share with friends and teammates because I know we all need this education.
Q: Your junior year at Oregon, it was reported you took out an insurance policy, in essence to protect yourself in the upcoming NFL draft. Can you explain for an athlete why it’s important to know the ins and outs of not only an insurance policy, but what can happen if you’re not financially literate early in your NFL career?
A: My junior year, I was projected to be a high draft pick in the NFL draft which allowed me the opportunity to qualify for insurance to cover me that year. The insurance covered me if I got hurt and fell lower in the draft, and it also I protected me if I got hurt and never could play football again. I felt it was important for me to take advantage of this opportunity and protect myself especially with the dangerous sport I play. I had no idea this was even opportunity. This is the often the case that people don't know what opportunities or devices are even out there. The knowledge is out, we just have to want to find it.
Arik Armstead is a star defensive lineman on the San Francisco 49ers. Entering his third year, he is projected to have a breakout season as he takes on a more leadership role with the new look team. Armstead has been around sports all his life coming from a sports family. In fact, it wasn't until his last year at Oregon where he decided to stop playing two sports (football and basketball) and focus solely on football. Armstead is a pillar in his community and frequently gives back. He host an free annual football camp for underprivileged youth in Sacramento, California.