Money Tips for New Olympic Stars

The Sochi Olympics haven't yet declared a breakout star, but contenders include U.S. figure skater Gracie Gold, impressive-even-in-defeat snowboarder Shaun White and Canadian skier Alex Bilodeau. Those who become household names are poised to cash in on their fame through corporate endorsements, speaking gigs and other new opportunities. Anyone who goes down that path could learn a few lessons from Michael Phelps, who became the first person to win eight gold medals at a single Olympics in 2008.

At the time, Phelps' agent told The Wall Street Journal that he expected Phelps' performance in Beijing to earn him $100 million over the rest of his life. He was already pulling in $3 million to $5 million a year through endorsements.

For Olympic stars, though, a life of luxury isn't a foregone conclusion. Plenty of celebrities, including MC Hammer and Kim Basinger, have raked in millions only to run into financial trouble later. Alby Salaman, chair of Holland & Knight's private wealth services group for the mid-Atlantic region and a lawyer for several NBA and NFL players, shared his tips for how standout Olympians can manage and protect their cash.

[Read: How Olympians Can Leverage Their Gold.]

Surround yourself with smart people who can help you.

Salaman says one of a newly minted celebrity's first steps should be to hire the right people, including financial advisors, lawyers, accountants and insurance agents. "One thing you want to do here is preserve this sum so that when the career is over, he has enough money to live on for the rest of his life. The financial advisors will help him invest the money in tax-exempt bonds and stocks to do that," Salaman says.

An athlete could become a spokesman for an athletic brand or major retailer, and skilled lawyers will negotiate those contracts on his or her behalf. An estate planning lawyer will also help the athlete write his will and take out appropriate life insurance, as well as provide for any dependents. In addition, a pension lawyer can help figure out how to defer income and save for retirement.

Get a prenuptial agreement.

This advice applies to any celebrity athlete with a significant other he plans to wed, Salaman says. It might sound unromantic, but it's the only way to protect yourself from a potentially public and ugly divorce, he adds. "Divorce law is murky. In all the states I know about, if you get divorced, then the property you bring into marriage is still your own separate property, but marital property, which is the earnings after the date of the marriage, can be split up to 50-50. He has to be protected -- clearly, he should have a prenup," Salaman says.

[See: Your 10-Step Financial Recovery Plan.]

Watch out for needy friends.

"I've been involved with athletes that have friends and hangers-on who say, 'Can you lend me $50,000 for a restaurant? It's going to be terrific, we'll make so much money. And remember in ninth grade, when the teacher asked where you were, I lied for you?' They call in their chips," Salaman says. That's dangerous for athletes who suddenly have a lot of cash and the means to share it with friends and relatives.

Salaman recommends using a financial advisor as the "bad guy," so celebrities can turn down requests for financial aid by blaming it on their advisor. "He can say, 'I'd like to give you the money,' or 'I'd like to get married without a prenup, but I've been with this advisor for a really long time, and he'd kill me if I did that,'" Salaman says.

Spend time on estate planning.

Few people relish the chance to plan for death, but it's especially important when other people are depending on your salary for their own well-being. Salaman points to the sad story of Len Bias, a star University of Maryland basketball player who was drafted by the Boston Celtics in 1986 and then died two days later from a drug overdose. He had no insurance, and his contract was voided, so his parents received no money. "So, after all these years of watching basketball games and sacrificing, they got nothing," Salaman says.

[See: 10 Ways to Upgrade Your Finances in 2014.]

Hire a public relations pro.

When celebrities get into trouble in the public eye, as they sometimes do, their reputation can be protected and controversy smoothed over by a trained marketing professional who can help redirect the media's attention. Media professionals can also make sure athletes select endorsement deals that only enhance their brand.

Think about your legacy.

Athletes often get involved with philanthropic organizations, from the Make-A-Wish Foundation to their own ventures, to give back to a world that has given them so much. Thinking strategically about what type of philanthropy might fit best with their own background and values can help solidify a meaningful legacy that lasts beyond their time in the spotlight.