NIL Income Is an Opportunity. Don’t Miss It.

“Name, image, and likeness” (NIL) income has changed the game for college athletes. For the first time, you can get paid while you play, and that’s a real opportunity to build something that lasts well beyond your playing career. But fast, big money requires deliberate thinking, and many athletes are never taught how to think about it.

This guide is meant to give you a game plan for protecting your future self and giving you real financial freedom long after the game is over.

Ask yourself:

•  If NIL stopped tomorrow, what income survives?

• Are you spending money or spending future options?

• Will today’s spending keep you from financial freedom in the future?

The Money Isn’t What It Looks Like

Here’s the first thing many athletes don’t realize: That $2,000,000 deal isn’t really $2,000,000. After taxes and expenses, you’ll probably keep about half. That’s not meant to be discouraging. It’s just the starting point for making smart decisions, and athletes who skip that reality check can end up scrambling to pay their bills five years later.

The second thing to understand is what that after-tax money is for. You can see it as something to spend now. Or you can see it as a seed. Every dollar you invest and leave alone has the potential to grow into something that works for you decades into the future. But you’ll need to protect it and give it time to grow.

Think of it like a fruit tree: You can harvest fruit for decades, but if you cut it down the moment it’s planted, it never gets the chance to produce.

Why Your Bank Balance Shouldn’t Be Your Budget

So if the goal is to invest and protect your money, how do you know what you can spend? That’s where it can help to think in terms of annual income rather than the lump sum that just hit your account. Pulling out too much money too early will likely mean that “future you” doesn’t have enough. But investing that money for the long term can increase your chances of success.

A widely used planning guideline suggests you can safely draw about 4% of your invested money per year, meaning your real spending power isn’t the number in your account. It’s what that number can generate each year. So, in that example above, where you got a $2,000,000 deal that ended up being $1,000,000 after taxes, try not to see it as a million dollars to spend today. Instead, it’s $40,000 per year for life under the 4% framework.

Your Spending Power Is the Income That’s Created Under the 4% Rule

After-Tax NIL Income	Annual Lifetime Spending Power
$250,000	≈ $10,000/year
$500,000	≈ $20,000
$1,000,000	≈ $40,000

So when a new sponsorship deal comes in, it’s not really a call to level up your lifestyle by spending it all. Instead, you can set yourself up for life. The goal is to let the original amount you invest grow, because that’s what keeps the income flowing.

How This Mindset Can Protect You

NIL money isn’t a salary that regularly lands in your bank account. In fact, it may never come around again. Treating every payment as a windfall that might not repeat, rather than income you can count on, isn’t being pessimistic. It’s being honest about the reality of an athlete’s career. It’s often what separates athletes who build lasting wealth from those who don’t.

Here’s what’s at stake:

• An injury can end your career without warning

• Playing time is never guaranteed

• Your marketability can shift faster than you expect

• Rule changes can reshape the entire NIL landscape

And here’s what you can gain:

• Less pressure to take bad deals just because you need the money

• More leverage in every negotiation

• Real control over your life and choices after sports

• A financial foundation that most people spend decades trying to build

Setting Up Your NIL Business: Sole Proprietorship vs. LLC

One of the most common questions athletes ask is whether they should set up an LLC. The straightforward answer is that structure matters a lot less than habits, but the right structure still depends on where you are right now. Here’s a comparison to help you figure that out.

	Sole Proprietorship (Default)	LLC (Single-Member)
What it is	You doing business in your own name	You doing business through an entity
IRS treatment	Schedule C on personal return	Schedule C on personal return
Income tax	Same	Same
Self-employment tax	Same	Same
Tax savings by default	None	None
Setup cost	$0	State filing fees + annual costs
Ongoing complexity	Low	Moderate
Separate bank account	Recommended	Required
Liability protection	None	Limited (not absolute)
Insurance still needed?	Yes	Yes
Contract protection	Comes from contract terms	Comes from contract terms
Works with NIL payments	Yes	Yes
Professional appearance	Neutral	Sometimes preferred by brands
May be best for	Early NIL income, simple deals	Higher income, more activity

Sole Proprietorship can make sense when:	LLC can make sense when:
NIL income is modest or inconsistent Deals are simple No camps, events, or employees You want speed and clarity You're focused on discipline first	NIL income becomes meaningful and recurring You run camps or clinics You hire contractors You sell merch or tickets Contracts increase in size and frequency Liability risk becomes real

The mistake to avoid:

• Setting up an LLC but NOT saving for taxes, tracking expenses, or separating accounts.

• Structure without habits fails.

The Bottom Line

Your NIL income has the potential to be genuinely life-changing, not just a nice check during your college years, but a foundation that works for you for decades. The athletes who create financial freedom aren’t necessarily the ones who earned the most. They’re the ones who treated every dollar as the beginning of something bigger rather than something to spend away today.

You don’t need to have it all figured out right now, but the earlier you build a financial plan, the more options your future self will have. A good financial advisor can help you understand what your money can do, build a framework that works for your life today, and make sure you’re set up for whatever comes next. We recommend a fiduciary advisor because they are obligated to put your interests first, even ahead of their own.

The game is short. Make the money last.

Ready to Build a Plan for Your Future?

Parkshore Wealth Management works with individuals who are ready to use their money intentionally. If you’re earning NIL income and want to make the most of it, we’d love to talk. We are fee-only and fiduciary, which means that we don’t earn commissions for the advice we give you and that your interests come first.

Schedule a complimentary, 15-minute chat with a fee-only, fiduciary financial advisor to discuss your personal situation.

This material was written in collaboration with artificial intelligence (Claude) derived from sources believed to be accurate. This information should not be construed as investment, tax, or legal advice.

Parkshore Wealth Management is an independent, fee-only Registered Investment Advisor with offices in Granite Bay and Folsom, CA, and Lehi and Logan, UT. We partner with financially responsible individuals and families who are eager to take positive steps that will allow them to use their money to build the life they desire. The firm is led by Daniel Andersen, CFP®, a member of NAPFA, the country’s leading professional association of fee-only financial advisors.