It might come as no surprise that the highest-earning athlete of the past year plays the world's favorite sport: soccer (er, football). But Forbes' 2017 list of the world's highest-paid athletes reveals a few surprises about the people who make all of that money, the sports they play and the sources of those massive paychecks.
Cristiano Ronaldo: international superstar soccer player and, even his opponents will admit, one of the best to ever play. Ronaldo plays internationally for Portugal and at the club level for the frequent champions, Real Madrid. Championships and spectacular skills brought Ronaldo a giant $93 million this year.
You'd be forgiven for guessing that his rival, Lionel Messi, is #2 on the list. But second place goes to an athlete who's certainly tired of being in second place. Lebron James, star basketball player for the Cleveland Cavaliers and, many will say, also one of the best to every play. Even after losing in a thrilling five-game NBA Finals to Stephen Curry's Warriors, Lebron is going home with $86.2 million on the year. Not bad for second place.
Messi, Argentina forward and Barcelona phenom, comes in just behind James at $80 million. It's no wonder that these three top the list, but their money comes from surprisingly different places.
Ronaldo picks up $58 million from his salary and winnings and Messi earns $53 million from the same source. Lebron James only makes $31.2 million from the Cavaliers, while the other huge stack of money comes from… you guessed it: endorsements. Remember that Sprite commercial? Messi, who made only $6 million less than James overall, had half the endorsement payout.
While Ronaldo, James and Messi are pulling between $27 and $55 million from endorsements, the surprise #4 beats them all. Roger Federer, the tennis champion, who only earned $6 million from his sport in the last year, made #4 on the list with $58 million in endorsements. That makes him the champion of endorsements on the Forbes list. Steph Curry, #8, makes almost three times as much from endorsements as from his Warriors salary. Phil Mickelson, despite making only $3.5 million from golf, finds himself at #12 with $40 million in endorsements. Tiger Woods reveals the widest discrepancy: he made only $107,000 from golf but complemented that with $37 million in endorsements to jump to #17.
#5 goes to Kevin Durant, a worthy position after his nba finals performance. Who is #6, you ask? It's a tie between two athletes you probably wouldn't guess: Andrew Luck, quarterback of the Colts, and Rory McIlroy, golfer. Conclusions: the Colts made a bad deal giving Luck a $47 million salary; and wearing all of that orange Puma gear propelled McIlroy rapidly into the endorsements game.
Another unfortunate shock: the only woman (yes, that means there is one woman) on the list is the champion of tennis champions, Serena Williams, at #51. Even after 39 Grand Slam titles, her $27 million comes mostly from endorsements.
Three sports only have one athlete on the lists: track, mixed martial arts and cricket. Can you guess who? Usain Bolt represents the running world at #23, Conor McGregor brings UFC to #25 and Virat Kohli holds the cricket bat at #89. No hockey player made the list.
The world of athletics seems dominated by a few headlining sports depending on the year, the country and the season. But Forbes' list shows that there are more filthy rich sports than you might expect.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.