Financial planning for Olympic medalists: How to manage reward money

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It is raining rewards for the medalists at Tokyo Olympics from all over the country. Haryana government awarded Rs 6 crore to Neeraj Chopra, who brought a gold medal in Javelin, Punjab government is rewarding him with Rs 2 crore, BYJU’S will give Rs 2 crore and the list goes on.

Similarly, Mahindra and Mahindra Group Chairman, Anand Mahindra has promised to gift the gold medallist the upcoming SUV XUV700.

The weightlifter Mirabai Chanu, who brought a silver medal, got 1 crore from the Manipur government, Rs 50 lakh from BCCI, and 2 crores from North East Frontier Railway as a reward. Whether it is Ravi Kumar or Bajrang Punia of wrestling or badminton star PV Sindhu, all of them are getting a huge amount as a reward.

The money received as a reward from the government remains tax-free. But money received from private companies or gifts like cars will have to be taxed at the rate of 30%. The players should focus now on their investment.

There is an influx of rewards, but financial advisors and planners believe that if this money is properly parked, then they will be able to create a comfortable future for themselves.

According to Vivek Masrani, founder, TechnoFunda Investing, said that athletes and players should divide their money into three parts – invest one part in fixed income for the future where fixed interest is available, the other part can be invested in an income-generating tool such as equities. Or you they invest in a start-up and keep the third part to fulfill their hobbies.

Players retire early, so long-term planning becomes very important for them.

Watch the full conversation with Vivek Masrani, Founder, TechnoFunda Investing.