Is the Patriots’ Rob Gronkowski More Frugal Than You?


Super Bowl winning NFL Tight End Rob Gronkowski might love himself some partying and late nights in the offseason, but according to his new autobiography coming out soon he might be a poster child for financial independence. Supposedly he has not spent a dime of his NFL earnings and lives off the endorsement money he makes. He also still wears his favorite pair of jeans high school. Is Gronkowski more frugal than other wealthy celebrities or is he just playing us?

ESPN’s Darren Rovell estimates Gronk’s earnings from marketing and endorsements to date coming in at around $3.5 million. His total earnings with the Patriots have amounted to about $16.3 million over his first several seasons.  A guy like Gronk is certainly in the top marginal income tax bracket meaning his tax bill is going to be way higher than you or me as a percent of his income so his savings percentage is going to be limited. So Massachusetts has about a 5% tax and the top federal rate is about 40% so he’s probably losing around 45% total to the government (marginal rates being close to his effective tax rate at this level of income since he’s making so much).

So of the total 3.5 + 16.3 = 19.8 million he’s earned, he has gotten to keep about 0.55 * 19.8 million = $10.89 million.  If the biography is to be believed, he has only spent that endorsement money or about 0.55 * 3.5 million = $1.925 million. That means he’s socked away about 0.55 * 16.3 million = $8.965 million, excluding any investment gains that he’s had on his portfolio which if he’s invested in anything besides cash the past five years he definitely would have more than that.  So his total saving rate ignoring that he loses almost half to taxes is about 44% and he’s spending around 10% of what he makes pre-tax. These numbers are extraordinary no matter who you are.

Clearly, we can all learn something from The Gronk and so could the majority of professional athletes. Takeaways for the average post college high income young professional is that it’s very possible to live a great life at a certain absolute level of spending versus a relative % of income level of spending. The guys who get themselves in big trouble are the ones who let their lifestyles rise to the level of their incomes when those incomes are very temporary. When the pro athlete earnings are gone so is their money as it gets portioned off to various creditors.

If you are making $100,000 a year as an engineer or software developer, you can be a slightly more nerdy and less chiseled version of Gronk (assuming you’re not as ripped as Gronk, I’m certainly not) and live on $20,000 a year. Your savings rate accounting for employer retirement savings and 401k contributions should be able to approach 50% and your journey to being able to do whatever you want with financial freedom will be that much closer.

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