See your kid as a Neeraj Chopra or PV Sindhu in the making? Prepare financially for the child's sports career

#financial planning, #Sports, cricket, Tokyo Olympics, PV Sindhu, Mirabai Chanu

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When eight-year-old Arwin Ambati picked up a bat for the first time four years ago, his father was ecstatic. As someone who had to give up his love for the game and choose a conventional career in information technology instead, he was determined to ensure that Arwin’s pursuit of his passion is obstacle-free. “He showed a lot of interest in watching games from the age of four. We even discussed technical aspects,” says.

So, Sukumar Ambati, Arwin’s father, enrolled him in a cricket academy in Mumbai three years ago and, more importantly, has planned for future expenses as well.

Over the years, Indian children are branching beyond cricket, spurred by growing exposure to international sporting events. The recent medal haul at the Tokyo Olympics is bound to fuel the enthusiasm further.

Aarna Sah, nine, a budding Mumbai-based badminton player, is back on her turf, after COVID-19 lockdowns. “I have decided that if her inclination is towards sports, more than academics, I will support her in every way possible,” says her father Lokesh Sah.

Football, athletics, boxing, rifle-shooting, chess; kids are trying their hand at a variety of sports. Fortunately, many parents are keen to nurture the next PV Sindhu, Mirabai Chanu or Neeraj Chopra. “Today, at least in the urban set-up, parents are supportive and want their kids to pursue their passion. They are open to their kids aiming for a career in different sports,” says banker-turned-sports administrator Deepthi Bopaiah, Executive Director, GoSports Foundation.

Encouragement is just one part.

Until your child starts playing at the national level, you will also have to manage a major part of the expenses. You need to take into account not only coaching fees, but also the sporting gear, tournament participation fees, travelling expenses and cost of regular nutritional supplements, if required.

Factor sports-related expenses into your financial plan

The most difficult part is estimating the expenses you would need a few years down the line. Now, in the case of higher education, you can factor in the current fee structure in universities of your choice while estimating future expenses and make a financial plan accordingly.

#financial planning, #Sports, cricket, Tokyo Olympics, PV Sindhu, Mirabai Chanu
Arwin Ambati: At the age of eight, he is training hard to be a professional cricketer. An ex-cricketer himself, his father not only has a financial plan to fund his sports expenses, but also a back-up plan in place

However, calculating the future cost of sports-related expenses is quite complicated. “It is crucial to have a realistic estimate of the costs involved during the years of training. This is especially critical since parents have to budget for coaching, travel expenses for competitions, equipment, and other sport-related expenses, in addition to school fee. The expenses may vary depending on the kind of sport activity chosen,” says Prableen Bajpai, Founder, FinFix Research and Analytics.

#financial planning, #Sports, cricket, Tokyo Olympics, PV Sindhu, Mirabai Chanu
Aarna Sah: Endowed with talent in multiple sports, Aarna, nine, switched to badminton recently. Her father is determined to support her passion should she decide to pursue a career in sports.

You have to factor in fixed expenses such as cost of equipment (Javelin, badminton racquet, rifle and so on) and recurring expenses. “If you are enrolled with an academy or club, you would have access to the equipment or you can obtain them on a rental basis as well. At the junior level, for any sport, the recurring expenses could work out to Rs 15,000 a month, including the trainer’s fee, nutrition costs and so on,” says Bopaiah.

#financial planning, #Sports, cricket, Tokyo Olympics, PV Sindhu, Mirabai Chanu
Avadhut Kolte: Fourteen-year-old Avadhut is a budding boxer. His father plans to monitor his interest and progress closely this year before devising a financial plan for his career in the boxing ring.

For instance, athletics training calls for investment in protein supplements and expensive sports shoes, amongst other things. “In the age-group of 6-12 years, the total annual expenses could work out to over Rs 1 lakh. Coaching fee could range from Rs 1,500-5,000 a month. In addition, they will need at least three to four pairs of sports shoes that come at a cost of around Rs 3,000-4,000 per pair. Protein supplements entail spends of up to Rs 5,000 a month,” says athletics coach Ajit Kulkarni, Founder, Aim Sports Foundation. Later, you can aim for scholarships and sponsorships, too.

Most parents prefer to dip into their regular savings to fund their children’s coaching fee and gear costs. Take the case of 14-year-old Avdhut Kolte, a budding boxer. “At present, monthly fee at his private training centre is Rs 1,000. I plan to monitor his progress closely in the next one year, see if the spark sustains and then make a structured plan to invest for future expenses,” says his father Sameer Kolte, an IT professional based in Mumbai.

Rejig your financial plan to accommodate short-term expenses

Since the expenses are relatively lower at the entry level, the challenge begins only after the child is closer to taking up the sport professionally. “Parents should get an estimate of the future expenses from the coaching centre once their child shows promise. If the child is extremely talented, they should think of hiring a personal coach, too, and plan for the related expenses,” advises Pankaj Mathpal, Founder, Optima Money Managers.

For example, Ambati says he has a financial roadmap in mind for Arwin’s cricketing career. At present, his monthly training expenses are close to Rs 7,000, with other sundry equipment – pad, gloves etc. – expenses amounting to another Rs 7,000. “In addition, we spend around Rs 8,000 per quarter on balls, though we have not had to purchase his bats so far – they’ve come in the form of gifts from our friends,” he says. These expenses are met through regular monthly surplus and savings, but he and his wife Deepthi have started investing for the long-term, too. “We are investing around Rs 2 lakh every year through SIPs in two-three mutual funds. We also invest our annual bonuses in blue-chip stocks,” says Ambati.

Sukumar, Arwin’s father, says that he has invested in properties in Mumbai. “Even if Arwin’s cricket career does not go as planned, we still earn a rental income,” says. However, not all parents support. “Many middle-class families support their kids’ sports aspirations until they reach class 8 or 9. After that, the pressure of the crucial board exams kick in; sports takes a backseat. This is when most budding sportspersons drop out,” he says, explaining the rationale behind his long-term planning.

Sports training expenses apart, you will also have to create a contingency fund to deal with medical treatment of injuries. Bajpai recommends buying a health insurance policy that covers sports injuries. “Parents have to plan for recurring a well as bigger expenses at intervals. It is thus important to set aside a monthly sum for near-term expenses, and continue investing for medium- and long-term expenses for the child alongside. The choice of products should be based on the time horizon,” adds Bajpai.

The planning can start as soon as you or your child’s school coaches spot the talent. “If your kid is, say, six years old and you have just discovered her passion and talent, you still have 5-6 years to go before she reaches the crucial juncture in the sport of her choice. In such cases, you can invest in large-cap mutual funds or blue-chip stocks. Long-term goal-oriented planning will help at the under-14 and under-19 stages when your child is likely to undertake frequent journeys across the country. The quality of sports gear needed then will mean higher expenses,” explains Mathpal. Sports administrator Bopaiah, too, recommends SIPs in mutual funds to build an adequate corpus.

 Reduce household expenses, invest in fixed income for the short-term

For the short-term period of two to three years, you can look at fixed income mutual funds. “Some restructuring of financial plan would be in order too. Budgets will have to be reworked,” suggests Mathpal. This could mean negotiating a difficult pitch as budget is bound to be squeezed. “It could mean cutting back on spending on entertainment or vacations, and in certain cases even delaying retirement,” says Bajpai. Some families will also have to target supplementary sources of income, as they have to manage both regular studies and sports expenses.

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