For nearly 10 years, Financial Literacy Counsel (FLC) has been working to help athletes formulate a ‘financial game plan’, so they can keep their focus on their sport while still reaching their long-term goals.
To help athletes reach financial success we interviewed five Canadian athletes to find out what we can learn from each of their unique financial journeys. Stay tuned for the next story!
Here is our interview with 2-time Olympian in Bobsleigh – Melissa Lotholz:
Growing up on a farm in rural Alberta, Melissa learned the joy of hard work and pushing her limits from an early age. Not only did this translate to her athletic success but it also imparted some important foundational financial concepts. When Melissa was in grade 6, her parents gifted her a cow and empowered her to decide whether to keep the calves to grow a herd or sell them right away.
At FLC, we teach people to buy more cash cows (assets that appreciate) than cash pigs (assets that depreciate). So, Melissa learned very early on—in a quite literal way—that having cash cows can help you grow your passive income.
What are your biggest financial challenges as a Canadian athlete?
Despite having competed in Bobsleigh for 8 years, Melissa admits there is still not a lot of financial security. Athletes receive a government stipend for competing in the sport at the highest level, but it’s not quite enough to cover all their sporting and living expenses. Melissa’s recent move from a brake woman to a pilot means she is now responsible for extra equipment costs. For example, she could pay over $8,000 to replace a set of sled runners.
By far the biggest stressor is trying to figure out where the rest of her funds will come from every single year, whether it be from sponsors, prize money, speaking at events, or getting a part-time job. Very few bobsled athletes have sponsors and are in a great position financially. For most, including up-and-coming athletes, it can be difficult to make ends meet and they can end up working full-time during their summer training.
“I start every single season like: I do not have enough money—How am I going to solve this problem? It’s hard to have a healthy relationship with money when you’re not sure what the next year’s income is going to look like and if your income and expenses are going to balance.
How have you tackled these financial challenges?
Financial Planning
Melissa tackles these challenges by viewing sport as a small business. Expecting ebbs and flows in her financial situation, she works with her financial advisor and accountant to meet her long-term goals.
Each tax season, she sits down to go over the previous year’s expenses and create a spending plan for the upcoming year factoring in equipment costs, training camps, and other seasonal expenses. She creates a high- and low-end budget to determine what she wants versus what she needs to get by.
When Melissa’s on the road, she doesn’t have much time for fundraising, therefore she partners with sponsors and runs events in the spring and summer months to front-load her income and then slowly spends it throughout the year.
“I have a very healthy rainy-day fund because you never know what’s going to come at you. This last summer I had some issues with having to [make a purchase] in cash versus a wire transfer so having extra accessible funds on hand is important!”
Knowing Your Worth
Melissa also spoke about the importance of knowing your self-worth and determining an appropriate salary. To find an answer to the question “What should one of the top bobsleigh athletes in the world get paid?”, Melissa spoke to other athletes, researched the salaries of analogous professionals, and sought advice from nonprofit organizations that fundraise for their own wages.
It’s especially important to know your worth when working with sponsors. Athletes can receive low ball requests on platforms like Instagram to be a brand ambassador in exchange for a 20% discount or a free product. Melissa recommends doing your research so you can pass on absurd offers and advocate for yourself when it counts!
Funding Your Athletic Career
Melissa learned about funding for her sport through trial and error and consulting friends in the non-profit fundraising space. She also bounces ideas off fellow athletes including Haley Daniels—Canoe Slalom Olympian. In Melissa’s experience, events are more fruitful than merch, although selling merchandise through an online store can be accomplished with less effort. Of everything she’s tried, she most enjoys putting on events.
This past year, she put over 100 hours into planning a come-and-go Canada Day event at a local restaurant complete with prizes and giveaways. She raised money by selling advertising to bronze, silver, and gold-level sponsors. The best part for Melissa was getting to connect to the community. During the event, she travelled to each and every table to personally thank them for their support.
“As athletes, we have a really unique role and our gift to people is getting to connect with them and share our stories. Sometimes, when we have our heads down and we’re grinding it out, I think we forget how much of an inspiration [we are] to others so [this event] was a really motivating experience for me—it’s cool that what I do gets to impact other people!”
What financial advice would you give to your younger self?
As a natural saver, Melissa’s advice to her younger self would be: “Choose your priorities and budget wisely, but don’t be afraid to spend a little money on yourself. That’s okay as well!”
Melissa also has 3 main pieces of advice for up-and-coming athletes:
“Ask questions! … whether that’s asking questions of other athletes, financial professionals or approaching sponsors.”
“Sometimes you need to spend money to make money.”
“Have an entrepreneurial spirit about funding your athletic career!”
Depending on your individual situation, assess what’s best for you right now. Some seasons, Melissa has opted for a part-time job as a safety net or focused on her education, while at other times she earns a living by running events and selling merch.
To use the infamous Wayne Gretzky quote, “You miss 100% of the shots you don’t take”. When soliciting partnerships and sponsorships, Melissa advocates for athletes to put themselves out there, although it’s not easy. If you’re choosing to market yourself and trying to make it a full-time venture, you need to practice selling yourself, and this only gets easier with time, experience, and by learning from your mistakes. Today, there are so many creative ways to earn money. Don’t be afraid to try different things and get out of your comfort zone!
But also, take time to learn from those who came before you.
“[We all feel like] we’re trying to reinvent the wheel and figuring it out on our own, but there are so many people that have done it [before us]. Your biggest resource is other athletes!”
In Melissa’s experience, other athletes have been more than willing to share their advice and act as a sounding board for her ideas. Even just following others on social media can help you find new tips and tricks. The Canadian Sport Institute has also been a great resource—they are a non-profit organization dedicated to building, creating, and educating athletes and their Game Plan program offers many opportunities for skill development including financial management.
Melissa invoked a common expression recited during training: Missing a day is not going to MAKE you, but it could BREAK you.
“It takes many days of training in a row and a consistent effort in the same direction to achieve your goals. Pushing your training when you’re hurt can definitely break you, so I would say the same thing with finances—whether that’s keeping your spending in check and not splurging on a whim or slowly and steadily investing [each week].”
How has working with Financial Literacy Counsel impacted you?
Melissa was connected to FLC through her Game Plan Advisor at the Canadian Sport Institute in Calgary, Alberta when she was looking for different saving plan options for athletes. Melissa has a good understanding of basic finances due to her upbringing around her parents’ small business and she ate up macro and microeconomics in school but, at this point, she was looking for someone to offer a bit more guidance when choosing the best option for her—and provide some accountability.
Trying to navigate the world of finance can be challenging for most people. Melissa admits she was overwhelmed with too many options and compared it to reading a menu without pictures for reference.
Melissa was introduced to Patrick Chee, Certified Financial Planner at FLC, due to his familiarity with the fluctuations in athletes’ finances. She explained that Patrick got to know her as a person and as an athlete and made recommendations based on her individual financial situation and comfort level. He offered information about asset protection and suggested questions to take to her accountant, such as “Which business expenses can be deducted from my taxes (i.e., equipment, coaching, physical therapy, sensory deprivation floats, or membership fees)?”.
Patrick enjoys working with athletes and says, “If you know the solutions to their needs, this helps alleviate one facet of their lives so they focus on performing at their peak.”. He emphasizes that in order to keep more of what they work so hard to earn, it’s important for athletes to be on top of their taxes and eligible write-offs.
Melissa expressed that it has been very valuable to look at her long-term financial goals and she is confident that she is now investing her money the best way she can!
“I have a lot more peace of mind and a little bit more security with where my finances are at and where [they] are going. It’s very nice to know that I have people that have my back and are willing to offer advice. As athletes, we’re always using different experts whether that’s coaches or physiotherapists, and we have a full-time mechanic on tour so why wouldn’t I use a financial advisor—somebody that’s an expert in that field?”
Patrick recommended using an app to track her spending, which gave Melissa insight into where her money was going. She noticed a pattern: If she was hungry on the way home from training, she would stop at the grocery store and get a grab-and-go meal, which was way more expensive than making it at home. So, she started packing snacks for training. This simple change ended up making a huge difference! Melissa still dines out when enjoying meals with friends but places this in a very different category than dining out in a rush.
Patrick adds that knowing athletes’ income can be erratic and some expenses (which can be costly) are often unknown; it’s in their best interest to be on top of their income and spending. For foreseeable expenses, it takes planning to ensure they have the funds on hand.
When it comes to budgeting, one of the best pieces of advice Melissa received was to recognize that every yes has a no. If you’re saying yes to coffee every day, then maybe you’re saying no to an extra training session. It’s not about cutting back on all spending but prioritizing where you’re spending your money and understanding how that’s working towards your goals and overall wellbeing.
What do financial advisors need to know about working with athletes?
Melissa believes it would benefit financial advisors to develop an understanding of the ebbs and flows of athletes’ financial year or financial quad. Most amateur athletes are working on a four-year cycle and the amount they can make each is drastically different. As well, it would help to recognize the unique situation athletes are in—the unpredictable nature of their income and expenses can provoke a great deal of stress and anxiety.
If you’re a Canadian athlete looking for financial advice, contact us to book a consultation, or reach out to your local Canadian Sport Institute Game Plan Advisor to learn about services available to you.
Melissa Lotholz found quick success in the sport of bobsleigh. Competing since 2014, Melissa has earned 2 Overall World Cup titles and 2 runner-up titles, 2 World Championship medals and 18 World Cup medals. In 2016, Melissa made history as part of the first all-women’s team to compete in the 4-man World Cup competition. In 2018 Melissa competed at the 2018 Winter Olympic Games, where she finished 7th alongside teammate Christine DeBruin.
Following her Olympic debut, Melissa chose to challenge herself by learning how to pilot a sled with the goal of representing Canada at the next Olympics in a new role. In 2020 Melissa returned to the World Cup as a pilot. And, in 2021 Melissa won the first-ever Canadian World Cup medal in the new Olympic discipline of women’s monobob. At the 2022 Olympics Melissa competed in the women’s 2man event. She realized her goal of being the first Canadian female bobsled athlete to compete at the Olympic Games as both a brakewoman and a pilot.