When you start earning money from Name, Image, and Likeness (NIL) deals, it’s tempting to put your earnings into whatever sounds exciting—maybe a single stock, a friend’s business idea, or even crypto. But smart investing isn’t about betting everything on one option. It’s about spreading risk. That’s where diversification comes in.

Just like in sports, where you rely on a whole team instead of one player, your money needs the same strategy.

What Is Diversification?

Diversification means spreading your investments across different assets—like stocks, bonds, index funds, and ETFs—so you’re not relying on one single investment to perform.

Think of it as building a balanced lineup. If one player has a bad game, the team can still win. If one investment struggles, others can help balance things out.

Why It Matters for NIL Athletes

NIL income can be unpredictable. Some months you may earn a lot, other months less. Investing all your NIL money in one place adds even more risk. Diversification protects you by:

• Reducing risk: If one investment drops, you don’t lose everything.

• Smoothing returns: A mix of investments can create more stable growth over time.

• Providing flexibility: Different investments serve different goals (short-term savings vs. long-term wealth).

Examples of Diversification

Here’s how a diversified approach might look:

• Stocks: Ownership in companies with potential for high growth.

• Bonds: Lower-risk investments that provide stability and income.

• Index funds or ETFs: Instant diversification across hundreds of companies.

• Cash or savings: Accessible money for emergencies or short-term needs.

By combining these, you build a portfolio that can handle ups and downs.

The Danger of “All-In” Investing

Putting all your NIL money into one investment—whether it’s a hot stock, a friend’s startup, or crypto—can be like relying on one star player to win the game alone. If that investment fails, you could lose your entire earnings.

Diversification isn’t about avoiding risk completely. It’s about managing risk wisely so you can stay in the financial game long term.

A Sports Analogy: Your Financial Team

Think of your money like a basketball team:

• Stocks are your star scorers—big upside, but sometimes they miss.

• Bonds are your steady defenders—less flashy, but reliable.

• Index funds/ETFs are your role players—consistent and balanced.

• Cash is your bench—ready when you need quick substitutions.

The best teams win because they’re well-rounded. Your portfolio should be the same.

Final Takeaway

Diversification is one of the most important principles of investing. For student-athletes managing NIL income, it’s the difference between financial stability and financial stress. By spreading your money across different types of investments, you protect yourself from risk and set yourself up for consistent, long-term growth.

Remember: your NIL earnings can give you a head start, but how you invest them determines whether you keep that advantage long after your athletic career is over.