As a student-athlete earning NIL income, it can be tempting to think only about the present—new gear, travel, or everyday expenses. But one of the smartest moves you can make with your money is to put some of it to work for your future. The key? Compound interest.

Compound interest is like the ultimate teammate for your finances—quiet, consistent, and powerful over time. Let’s break down how it works and why starting early matters.

What Is Compound Interest?

Compound interest is the process of earning interest not only on the money you put in but also on the interest that money has already earned. In other words, your money starts making money—and then that money makes more money.

It’s different from simple interest, which only pays on your original amount. Compound interest snowballs, growing faster the longer you leave your money invested.

A Quick Example

Imagine you invest $100 a month starting at age 18, earning an average of 7% per year:

• After 10 years: About $17,000

• After 20 years: About $52,000

• After 40 years: Over $240,000

That’s the power of compounding—small, consistent contributions add up to big wins over time.

Why Starting Early Is a Game-Changer

Athletes understand that training every day compounds into performance on game day. Money works the same way—the earlier you start, the more time your investments have to grow.

Even if you can only invest a small portion of your NIL income now, the years ahead give you an incredible advantage over someone who waits until their 30s or 40s to begin.

Where NIL Athletes Can Harness Compounding

• High-yield savings accounts (HYSA): Safe place for emergency funds—earns some interest while staying accessible.

• Roth IRA: NIL income counts as earned income, so you may be eligible. Contributions grow tax-free, and withdrawals in retirement are tax-free.

• Index funds & ETFs: Affordable, diversified investments that allow your money to compound over decades.

The Discipline Factor

Compound interest works best with consistency. That means:

• Investing regularly, even if it’s a small amount.

• Reinvesting earnings instead of cashing them out.

• Avoiding the urge to spend everything today.

Think of it as putting in reps—you don’t see the results overnight, but the steady effort compounds into major results down the line.

Final Takeaway

Your NIL opportunities give you an incredible head start that most people don’t get at your age. By setting aside even small amounts and letting compound interest work its magic, you can turn today’s NIL dollars into tomorrow’s financial freedom.

Remember: you don’t have to start big—you just have to start.