Bankrupt Professional Athletes

[travelover]

Interesting insight into the rich and famous...........


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Seventy-eight percent of former NFL players are bankrupt or under financial stress within two years of retirement, and 60 percent of former NBA players are broke within five years of retirement, according to a Sports Illustrated story detailing the extravagant spending habits of professional athletes.

[Notmuchlonger]

Most of these guys were young dumb kids. Doesn't surprise me. Hell give me that money at 19 to 20. lol. I still cringe and wince at the stuff I did.

Damn I still cringe and wince at the stuff I do now

[ziggy29]

I'm not surprised. Many of them went from rags to riches virtually overnight with one signature, so money management was not on their agenda growing up -- and the ones in that boat probably didn't have parents who could have helped them learn...

[FinallyRetired]

Example of a not-SWR:

"Documents cited in the story show that Shaquille O'Neal spends $875,015 per month, while former NBA guard Kenny Anderson burned through the $60 million he made as a player, partly by spending $41,000 per month, which included $10,000 worth of "hanging-out money." "

[ziggy29]

Quote:

Originally Posted by FinallyRetired "Documents cited in the story show that Shaquille O'Neal spends $875,015 per month, while former NBA guard Kenny Anderson burned through the $60 million he made as a player, partly by spending $41,000 per month, which included $10,000 worth of "hanging-out money." "

A lot of them have toxic parasite "friends" who leech off of them and make them burn all that money that much sooner.

[Notmuchlonger]

I could relate just not the money wise. Didn't have a good relationship with my folks. If someone threw a big lump of dough in my pocket. I would have made similar mistakes. Unfortunately for me. I only had enough to get by everyday

Damn wish I was good at sports.

[CybrMike]

Quote:

Originally Posted by FinallyRetired Example of a not-SWR: "Documents cited in the story show that Shaquille O'Neal spends $875,015 per month, while former NBA guard Kenny Anderson burned through the $60 million he made as a player, partly by spending $41,000 per month, which included $10,000 worth of "hanging-out money." "

Man, I don't get it, $60 million...$41K per month is only $480K per year. Sounds like a less than 1% SWR to me.

[Payin-the-Toll]

I also say shame on the NFL, NBA, agents, and the teams themselves. With all the mandatory meetings they must attend about winning the next game, you'd think they'd have a couple of mandatory meetings that discuss this stuff. Pretty sad.

[FinallyRetired]

Quote:

Originally Posted by CybrMike Man, I don't get it, $60 million...$41K per month is only $480K per year. Sounds like a less than 1% SWR to me.

You know, you're right. When I saw that monthly expenditure my immediate reaction was that this couldn't be a SWR. But when you look at a worth of $60M, it's peanuts. I can't comprehend that kind of money.

The story does say that the monthly expenditure is only part of the problem. The real problem is their bad investments, divorces, etc. So I guess this guy gets used to spending $41k a month, his $60M goes south but he never adjusts his expenses to cover his shrinking fortune.

I can imagine the number of great money managers with fantastic investment schemes that come out of the woodwork when they find out how large of a contract they signed.

[frayne]

I have a hard time feeling sorry for these individuals.

[ziggy29]

Quote:

Originally Posted by Payin-the-Toll I also say shame on the NFL, NBA, agents, and the teams themselves. With all the mandatory meetings they must attend about winning the next game, you'd think they'd have a couple of mandatory meetings that discuss this stuff. Pretty sad.

I think the NFL does have something like this for all incoming rookies where this is discussed along with things like drugs and gambling. But there's really no way to keep it from going one ear and out the other.

In reality, a lot of these guys would be much better off if their contracts were annuitized.

[Dawg52]

Quote:

Originally Posted by frayne I have a hard time feeling sorry for these individuals.

I do too. And I have a hard time watching professional sports anymore. Knowing what these guys are making, makes it less enjoyable for me.

[W2R]

I suspect that at least some of these guys are not intellectual giants, and are brought up to think that pro sports is a road to unfathomable and inexhaustable wealth.

They are young, and don't yet really know how to handle even an average income, much less a huge income.

Then their so-called "friends", golddigger girlfriends, agents, and/or staff end up getting a lot of their money, and taxes probably take care of a lot as well.

I agree with Dawg54 - - I'd rather watch a high school or college game than pro sports, any day. Somehow the youthful exuberance and enthusiasm for the game seems to be lacking in pro sports.

[jazz4cash]

Some may have missed this..........

"But the biggest drain on athletes' money is poor investments, says Ed Butowsky, a wealth manager who advises athletes. "Chronic overallocation into real estate and bad private equity is the Number 1 problem [for athletes] in terms of a financial meltdown," Butowsky told Sports Illustrated.

[Notmuchlonger]

Quote:

Originally Posted by frayne I have a hard time feeling sorry for these individuals.

Me too. But remember these were all dumb kids. 18 to 20.

[laurence]

All of this is completely true in my experience. DW's aunt was married to an NBA player. Big money in and just as fast out. Huge mansion on the SoCal coast, lots of leech friends, he "employed" cousins etc. Totally greasy guys hanging around with job titles like "Day Trader" etc. His back yard was fun, though. Huge, with a sunken full basketball court with his jersey number emblazoned on it. The culture and the life was so entrapping. There was a ton of pressure to live a certain way even when your contract was for seven figures a year and those you were trying to keep up with made eight. For example, he had a Ferrari in team colors, and whenever he was traded he traded in for a new one in the new team colors. What broke up their marriage was infidelity. He was a jerk and every road trip was groupie night. He was a spoiled kid that nobody said "no" to and still is one today. Right now I'm watching my 6' 6", 13 year old nephew (his son) heading down that path. His basketball league championship game was a blowout, with him scoring more than half the points for his team. I don't know if to wish for him to make it all the way or flame out early enough to avoid that life altogether.

Oh yeah, and they did stupid things with their money like buy submarina franchises and other money losers.

[harley]

Quote:

Originally Posted by Notmuchlonger Me too. But remember these were all dumb kids. 18 to 20.

I don't think so. Most get into pro sports out of college (21-22). Then they have their career, which needs to last long enough to get used to the huge bucks. So maybe mid to late 20s through their 30s.

Of course, this doesn't make that much difference. Especially with spoiled pros. There would have been a big difference between giving me multi-millions at age 22 (death) vs. at 30 (FIRE). But never having been in that situation I can't say how I would have reacted. But even when I was planning to be a huge rock star I was much more interested in the sex than the money. Oh yeah, and the music.

[clifp]

Quote:

Originally Posted by ziggy29 I think the NFL does have something like this for all incoming rookies where this is discussed along with things like drugs and gambling. But there's really no way to keep it from going one ear and out the other. In reality, a lot of these guys would be much better off if their contracts were annuitized.

I really hold the players union, and the agents responsible. I think these stories would be far less prevalent if the league rules required that 1/2 of professional first contract needed to be annuitized over a twenty year span.Even a modest (by Pro standards] 3 year million contract would provide 20 years of reasonable income plus would help with taxes.

Annuity get a bad rap on the forum (generally with good reason) but if there is one group that needs them it is 22 year professional athletes.