Tennis legend Leander Paes advocates for money management education in schools

Tennis maestro Leander Paes on October 11 expressed his belief in the importance of financial literacy courses in school curriculums. He emphasized the essential role that money management plays in the life of an individual, regardless of their career choice. He noted that teaching children about managing finances from an early age would set the groundwork for a financially secure future.

While speaking at an event organised by Moneycontrol, Paes said, “Then, every child will learn that whether they make Rs 12,000, 25,000 or Rs 1 lakh a month, they must invest 50 percent in a nice portfolio managed by a professional. And invest the rest in themselves, their profession, their skills, which will allow them to have a better quality of life.”

Leander Paes also sheds light on the prominent yet overlooked aspect of finance - the crucial distinction between making money and managing it. By candidly sharing his personal narrative of adversities during the initial phase of his career, Paes underscored the importance of managing money prudently.

Reminiscing about times when he couldn't afford to pay his coaches and even had to sleep in locker rooms, his anecdotes provide a realistic portrayal of financial struggle. Paes drew attention to the potential pitfalls of failing to handle finances wisely, stating that he would have been engulfed in debt if his career had not propelled forward.

“I remember when I was 19, I was in a place called Wolfsburg in Germany. I was $1,50,000 in debt. My coach at the time believed in me and said that I can pay him back when win, but that meter was ticking all the time. So I invested in my fitness, I invested in my skills. I was not born into money. My father worked really hard as a doctor, and as an athlete, my mother worked really hard,” the tennis champ said.

Drawing from his experiences and learnings as an athlete, Paes shared insights about the conscious risk management decisions in his life. Rather than engaging with the uncertainties of equity market fluctuations, Paes chose to invest half of his earnings from his athletic successes in real estate. He made this strategic choice during the peak of his career, between ages 23 and 43. He emphasized the need for stable, minimal-risk investments as a means to maintain focus on his health and fitness - a crucial aspect for a competitive athlete.

“I did not want to wake up one morning and realise a stock had gone down 1-2 percent, and suddenly see my backhand becoming shaky. Or, the next day, a stock rises 3 percent, and suddenly I get so excited that I serve a double fault at the Wimbledon finals. I did not want that,” explained Paes.

However, in reference to the current tumultuous geopolitical situation, he stressed the need to have liquid cash.  “Over the years, I have invested smartly in real estate. But then came Covid. I finished a 31-year career and suddenly I sat back and said, oops, I need liquid cash. I think Covid taught a lot of us great lessons about having liquidity. If you look at what's going on in the world today, I think it is in a very vulnerable position,” he added.

The tennis legend underlined the importance of having smart people do smart things, as well as having a decent fund manager to handle one's money.

“If you want to learn how to play tennis, guys, come to me, I'll teach you a trick or two. But if I want to learn how to manage my money, they (the MF pros) are all in this room right here,” said Paes.

When asked if he considered the prize money when planning his itinerary, Paes said, “One hundred percent. You have to be tremendously calculating. We're always calculating, whether it's our groceries, rent, or our financial investments, we're always looking for that extra 1 percent. For me, the extra 1 percent on a tennis court allows me to win.”

He gave specific examples of how, while planning his itinerary, he preferred to stay on one continent for eight weeks rather than go around the world to save money on airfare. He also claimed that in his long career, he only played in Scandinavia about 5 per cent of the time since after accounting for their high taxes and his expenditures, he would be left with just around 15 per cent of his winning money.

Paes said, “At the end of the day, to manage money as an individual athlete who does not have an association to pay for him or any sort of financial backing, you have to be very calculating.”

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