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Quick Summary

  • Alex Michelsen's rise in tennis is a good reminder that behind every sudden success story is a financial grind that most people never see, and the lessons from that grind apply to pretty much everyone.
  • Whether your income is irregular like an athlete's or you just got your first real job, the basics matter more than you think: low fixed costs, a bigger emergency fund than you think you need, and starting to invest earlier than feels necessary.
  • I learned most of this by doing the opposite first and paying for it, so take the boring advice seriously before you have to learn it the hard way like I did.

So Alex Michelsen is all over my feed today. If you haven't been following tennis, he's this 20-year-old American who basically came out of nowhere and started beating guys who've been on tour for a decade. People are losing their minds over him. And honestly, watching his trajectory made me think about something I wish someone had told me at 20 about money and building something from the ground up.

Here's the thing about watching a young athlete blow up like this. Everyone focuses on the prize money and the Nike deals and the glamour. Nobody talks about the years before that. The travel costs, the coaching fees, the tournament entry costs, the hotel rooms that probably smelled like mildew. My cousin played college tennis and even at that level the financial grind was real. So when I see a kid like Michelsen making it look effortless on the court, I know there's a whole financial story happening behind the scenes that most people never think about.

And that's exactly what I want to dig into today. Because whether you're trying to build wealth as a regular person with a 9-to-5 or you're some kind of athlete grinding through the early stages, the money principles are basically the same. I learned most of this the hard way. Three credit cards maxed out by age 24 hard. So let's get into it.

The Financial Reality of the Early Grind

Let me paint a picture for you. A junior tennis player climbing the ATP ranks might be spending anywhere from $50,000 to $150,000 a year before they're making consistent prize money. Coaching, travel, equipment, physical therapy. It adds up fast. Most of these kids come from money or have sponsor support early. Some don't and they're operating on borrowed time financially.

Sound familiar? Because this is basically what starting a business feels like. Or going back to school. Or taking a lower-paying job to build skills in a new field. You're spending down your resources or your family's resources betting on a future payoff that isn't guaranteed.

What I found was that the people who make it through these phases usually have one thing in common. They treat every dollar like it matters even when it feels like the amounts are too small to worry about. I did the opposite when I was younger. I told myself I'd get serious about money when I was making more. That's probably the most expensive mindset you can have.

The principle here is simple even if it's hard to live. Keep your fixed costs as low as you possibly can during high-uncertainty periods. Don't buy the car. Don't upgrade the apartment. Stack whatever you can. Because when the income does come, you want options, not obligations.

How Prize Money and Income Actually Works

Okay so Michelsen won a match at the US Open last year and people were talking about the prize money like he was suddenly rich. Let's be real about how this works because I think it applies to a lot of irregular income situations.

ATP prize money sounds huge until you factor in the coach taking 10-15%, travel and accommodation costs for the week, agent fees if you have one, taxes in the country where you earned it, and then taxes again at home. A $100,000 prize check can realistically net you $40,000 to $50,000 after everything. Still good. But not what most people picture.

This is exactly how bonuses, commissions, and freelance payments work for regular people. You get a $10,000 bonus and think you're set. Then the government takes a third, you spent some in anticipation of it, and suddenly you have $4,000 left. The tax surprise on irregular income is something I genuinely did not understand until it bit me hard in 2019 when I did some freelance work and got a tax bill I was completely unprepared for.

The move here is to automatically set aside 25-30% of any irregular income payment the moment it lands. Before you do anything with it. Automate it into a separate account if you can. Treat it like it was never there. I started doing this and it completely changed how I handled project income.

Building a Financial Base When Income is Unpredictable

This is the part nobody glamorizes. Michelsen and players like him have months where they earn a lot and months where they earn almost nothing. Injuries happen. Bad draws happen. A first-round exit at a smaller tournament might cover travel costs and not much else.

The answer to unpredictable income is a bigger emergency fund than the standard advice gives you. You've probably heard three to six months of expenses. Honestly, for anyone with variable income I'd push that to nine to twelve months. I know that sounds extreme. But the psychological difference between having six months of runway and twelve months is enormous. You make better decisions when you're not desperate.

The other thing that matters here is keeping lifestyle inflation in check during the good months. This is so hard. When the money comes in, you want to feel it. Buy something. Eat somewhere nicer. Upgrade something. A little of that is fine. But the people I've watched build real stability are the ones who barely change their lifestyle during flush periods. They just quietly stack more cushion.

Why Starting at 20 Changes Everything

Michelsen is 20 years old. If he's starting to make real ATP money now and he gets even basic financial advice, he has something most people would kill for. Time.

I'm going to throw some numbers at you because they still get me every time I look at them. If you invest $500 a month starting at age 20 and average a 7% annual return, you'll have roughly $2.6 million by age 65. Start at 30 instead and you end up with about $1.2 million. Same monthly investment. Same return. Ten years of difference costs you $1.4 million.

That is not a typo. And that's why I genuinely think the biggest financial mistake most people make in their 20s isn't buying too many lattes or whatever. It's not investing at all. I didn't start until I was 28. I think about those six years a lot.

For someone with athlete income, the options get more interesting too. Maxing a Roth IRA every year during those peak earning years is one of the best moves available. Tax-free growth on money earned during high-income years. It's the kind of thing that sounds boring and complicated until you watch that account grow for a decade.

Mistakes People Make When Money Starts Coming In

This is where I want to be honest because I've seen this happen a lot and I've lived some version of it myself.

The first mistake is lifestyle creep that outpaces income growth. You start making more so you spend more and your savings rate stays exactly the same. Nothing actually improves. You just have nicer stuff and the same amount of stress.

Second mistake, and this one is brutal, is trusting the wrong people with your money early on. Sudden money attracts bad advice. Agents, friends with investment ideas, family members who need help. There's nothing wrong with being generous but you need a financial structure before you start being generous or the money just disappears and you can't even explain where it went.

Third mistake is not understanding taxes until it's too late. I've talked to people who owed the IRS money they genuinely didn't have because nobody ever explained estimated quarterly taxes to them. This is fixable. But it requires getting ahead of it not scrambling after the fact.

Fourth, and this one is underrated as a mistake, is not having income protection. For an athlete this means disability insurance. For a freelancer or self-employed person this means the same thing plus maybe income replacement coverage. What happens to your whole plan if you can't work for six months? Most people have no answer for that.

What I'd Actually Do

If I were in Michelsen's situation or just starting to make real money at a young age, here's what I'd actually do, not what sounds good in theory.

I'd hire a fee-only financial advisor. Not someone who earns commissions on products they sell me. Fee-only means they charge a flat rate or hourly rate and their job is actually to advise me, not sell me something. This is the one thing I wish I'd done earlier.

I'd max the Roth IRA first. Every year. Non-negotiable. Then figure out a taxable brokerage account after that.

I'd keep my monthly fixed expenses embarrassingly low relative to my income. I'd probably look cheap to people around me. That's fine.

And I'd build a cash reserve that felt almost uncomfortable. The kind where you think you might be holding too much cash. Because the seasons when income dries up are coming whether you expect them or not.

The boring stuff works. I've seen enough people ignore the boring stuff and end up back at zero to believe that pretty deeply now.

Anyway. Good luck to Michelsen on whatever tournament he's playing. But more importantly, good luck to you in figuring out your own version of this. The principles don't really change based on whether you're serving aces or sitting in a cubicle. Build the base. Don't waste the early years. And for the love of everything, set aside your taxes before you spend the rest.