When you signed your first NIL deal, you probably didn’t expect to become a business overnight. But that’s exactly what’s happened. And just like any business, you need a strategy to manage your money, plan for taxes, and set yourself up for the future.
As a financial advisor for NIL athletes, we help people like you handle the unique challenges of NIL income. Whether you’re making $5,000 a year or $1M, here’s what every U of M athlete needs to know:
1. You’re a Business Now (Even If It Doesn’t Feel Like It)
The moment you earn NIL income, you’re considered self-employed. That means:
-
You don’t get taxes taken out of your checks
-
You may need to make quarterly estimated tax payments
-
You can deduct certain expenses related to your NIL work
This also means you’re responsible for tracking your income, keeping receipts, and filing taxes accurately. Mess this up and you could owe penalties to the IRS, even if you’re still in college.
2. Don’t Spend All Your NIL Money: Save for Taxes First
Here’s a simple rule of thumb: set aside 30–40% of your NIL income for taxes. That might feel like a lot, but it’s better than scrambling to come up with a big chunk of money next April.
If you’re getting multiple deals or bigger payments, consider opening a separate savings or money market account just for taxes so it’s out of sight and safe (and earning interest).
3. Use Your NIL Window to Build Long-Term Wealth
Most NIL income doesn’t last forever, but the money can. If you’re earning a strong income today, you have the chance to do something most college students can’t: invest early.
With the right structure, you can:
-
Open a Roth IRA, Solo 401k, or SEP IRA
- Create a short-term savings fund (vacation, shopping, etc.)
-
Build an emergency fund
-
Start building credit responsibly
Even saving $200–300 per month can put you years ahead financially once your athletic career ends.
4. Plan for the Transition (Professional or Not)
No matter what decision you make related to continuing your sport professionally, your NIL years are a launchpad. The athletes who come out ahead are the ones who treat their money with the same discipline they bring to their sport.
Working with a financial advisor now isn’t just about managing things today. It’s about making sure you have options after college, whether that means a pro contract, entrepreneurship, grad school, or coaching.
5. Get Advice From Someone Who Doesn’t Just Want a Cut of your NIL Money
There are a lot of voices in the NIL world. Agents. Brands. Even some financial “advisors” who only get paid if they sell you something. At Kraft Capital, we’re fee-only fiduciaries. That means:
-
We don’t earn commissions
-
We don’t sell products
- We have a legal obligation to act in your best interest 100% of the time
-
We only work for you
Our job is to help you make smart decisions, not to pitch you insurance, investments, or gimmicks.
Want Help?
If you’re a Michigan student-athlete earning NIL income and want to make sure you’re doing it right, we’d love to connect. Whether it’s one meeting or an ongoing relationship, we’ll help you get organized, reduce tax surprises, and use your NIL years to build something bigger.
– Clint Kraft
Founder and Financial Advisor, Kraft Capital