Risks of following the dream

When we learnt about risk in class I started to think about the whole income risk aspects many of us face in choosing an education and life path to be even more philosophic. I read on one of the other blogs about athletes making a ton of money, and realized that many athletes face a big risk when they chose to pursue their dream of becoming a professional athlete. It is true that not everyone have the possibility to become a professional athlete, but I think that more people have it in them, it’s just that putting your life on hold to pursue this dream with, let’s face it the changes of succeeding is quite small, is pretty risky.

In the US we are lucky; there is a good system for pursuing the dream of becoming that successful well paid athlete and at the same time getting a college degree, so that in case the well paid sport career doesn’t turn out that well you have an education to fall back on.

In many European countries this is not the case, often there is not getting an education and pursuing your dream, there is either or. This is where the whole risk factor come sin. Are you willing to risk getting an education and start a normal life in order to pursue your dream? So let’s say that if you succeed you can make ex $ 300 000 a year (at lot of sports doesn’t pay that well either maybe unless you’re gorgeous looking or a celebrity for some other sketchy reason). But if you don’t succeed, then you have worked extremely hard day in and day out for who knows have long and income wise made next to nothing and you don’t even have an education to fall back on. Many times athletes even have to take up loans to get to this point. If you succeed as a professional athlete all this doesn’t matter much, you now have both money and a name and will most likely be able to make a good living when you retire from sports. The risk you took was worth it. But what if you risked it all and lost? That is something that is pretty hard to insure yourself from, and if you were able too, I’m pretty sure that with such small chances of succeeding the insurance premium would be sky high.

Let’s look at an example:
Let’s say that if you follow your dream after high school your chances of income are the following at the age of 25. (The wages are average rates for the education in the US today, pro athlete wage and probabilities are just a guess). This is simply an example and variables such as being both a student and an athlete, the fact that you have to pay for college to get a degree or pay to live as a training athlete and the money you can make living a normal life is not taken into account to keep it all simple.

This leaves estimate values of $32 700 for the dreamer and $37 600 for the “normal” life, even with probabilities that should favor the dreamer. This means that it is normally not beneficial to risk your education and try to become a pro athlete. Had we been able to get perfect information on these things everything would be easier, but with so many variables playing a part, this impossible. The value of this perfect information could have been amazing. In the old soviet they tried something like this, they took muscle samples from young people to see if they thought they could succeed in a certain sport, if the result didn’t please them you weren’t even given a chance. Harsh, but if the measure had been right at least you didn’t waste your time. And time is money.

So what makes athletes take this risk of following their dream and at the same time almost putting their life on hold? I would say it has to do with utility levels. Succeeding in sports, even if I made less money than I would do behind a desk would raise my utility levels way higher. So who chooses this risk of following their dream must mirror personality traits such as risk loving, risk neutral and risk loving. As great as it would feel to say that I’m a risk loving person trying to become an athlete, I guess that me coming to America to try do it both at once shows that that is exactly what I’m not. While some of my friends are at home risking it all on one card, being risk loving, I went down the safer path and got an education. In some years we’ll see what gave the best payoff.