Michael Phelps reveals the deal with his mom that let him spend $20,000: “It opened me up to thinking differently”

Michael Phelps was earning serious money before he was old enough to vote, but the most valuable financial lesson he says he learned didn’t come from a sponsor or a financial adviser. It came from his mother.

Speaking on Richer Lives with Vivian Tu, the 23-time Olympic gold medalist explained that when he turned professional at 15, his mom came up with an unusual agreement. Rather than letting him spend freely, she linked big purchases to one thing: breaking world records.

What was Michael Phelps’ $20,000 deal with his mother?

Phelps said his mother told him that every time he broke a world record, he could spend around $20,000 to $25,000 on whatever he wanted.

It sounds generous, but there was a catch. If he didn’t set a new world record, there was no shopping spree.

“It was fun,” Phelps recalled, laughing as he remembered the arrangement. Once he was old enough to drive, he used one of those rewards to buy himself a Cadillac Escalade.

But despite money “pouring into” his account through prize bonuses and sponsorships, he said the deal stopped him from treating his bank balance like an endless supply of cash.

How did Michael Phelps learn to manage his money?

Phelps says that incentive changed the way he viewed his career.

Instead of wondering what he could buy next, he began asking what else he could do with the money.

“I think through that process of my mom teaching me the incentive based with the world record, I was like, ‘OK, what else am I going to do with my money? Am I going to invest it? Equity deals?’”

Money not everything to Phelps

He added that it “really opened me up into thinking differently about my career, not only as a swimming career but a profession.”

That mindset carried through the rest of his career. Phelps revealed he’s worked with the same financial adviser since he was 15, gradually learning about budgeting, long-term investing and equity deals instead of simply collecting endorsement checks. He also said he deliberately chose sponsors he genuinely believed in rather than simply accepting the biggest payday.

For Phelps, success always came before money.

“I was never and never have been obsessed with money,” he said. “Naturally, money’s going to come with success... but I do not agree that money brings you happiness.”

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