Another money mismanagement story by a professional athlete

[Corporateburnout]

Another story about professional athletes mismanaging their money and filing for bankruptcy.

Portis apparently made 43 millions in his career and now he's broke. He even stiffed his own mother for a half million bucks and owes four different women 412K in domestic support obligations.

Clinton Portis owes nearly $5 million, counts mother as creditor

 

[Senator]

I wonder how much was spent on drugs, alcohol and hookers... The article does show gambling was a major problem.

 

[Corporateburnout]

Lots of people on this board live on less than $7500/month but he needs $13000.

 

[mystang52]

These stories always astound me. No matter how stupid one is, I would think there is at least an iota of common sense to at least put some money aside (you know, like maybe a million bucks?) to avoid this very situation.

Hate to use an old cliche, but I guess this is just another dumb jock.

 

[marko]

I wonder how much was spent on drugs, alcohol and hookers...

...and the rest of it he squandered!

 

[Texas Proud]

Lots of people on this board live on less than $7500/month but he needs $13000.

Did not read the article, but if he owes 4 different women support payments then I would be surprised if that was enough.... then again, maybe that does not count these payments....

 

[RunningBum]

He tried to put away not $1M, but $2M, but was swindled. $8M on a failed casino venture, not gambling losses. $287K to a casino, probably gambling and lodging expenses, which is a lot to an average person but is not a major part of $43M. Bad judgement on who to trust with his money and what to invest in, but if he actually had $13M in assets including the $10M that is now worthless, less $5M in debts, $8M would be $240K at a 3% withdrawal rate. $12,800/month is very close to that. He'll probably come through bankruptcy in ok shape as long as he can cut his lifestyle back.

I don't think the pro sports leagues or their players unions do enough for these guys. I don't know what all they do, but a session or two as rookies and maybe a session a year, if they even do that, isn't really enough.

 

[6miths]

The article also highlights the failure of the NFLPA to look out for players. I remember seeing a report on the NFLPAs recommendation of 'approved' financial advisors for players. It all seemed quite shady. Portis lost a big chunk of change to one of these guys. How hard would it be to set up a legitimate counseling service and direct these suddenly rich teens and twenty-somethings to Vanguard with even 10% of their earnings. Wayne Gretzky tells the story of his father Walter 'advising' him to put his signing bonus into an annuity when he was 18. One can imagine what that kind of money put into an annuity in 1979 would be worth.

 

[6miths]

He tried to put away not $1M, but $2M, but was swindled. $8M on a failed casino venture, not gambling losses. $287K to a casino, probably gambling and lodging expenses, which is a lot to an average person but is not a major part of $43M. Bad judgement on who to trust with his money and what to invest in, but if he actually had $13M in assets including the $10M that is now worthless, less $5M in debts, $8M would be $240K at a 3% withdrawal rate. $12,800/month is very close to that. He'll probably come through bankruptcy in ok shape as long as he can cut his lifestyle back.

I don't think the pro sports leagues or their players unions do enough for these guys. I don't know what all they do, but a session or two as rookies and maybe a session a year, if they even do that, isn't really enough.

+1

Was typing my response at the same time. They say there is no such thing as a free lunch but clearly these young athletes are just that to many.

 

[Corporateburnout]

He tried to put away not $1M, but $2M, but was swindled. $8M on a failed casino venture, not gambling losses. $287K to a casino, probably gambling and lodging expenses, which is a lot to an average person but is not a major part of $43M. Bad judgement on who to trust with his money and what to invest in, but if he actually had $13M in assets including the $10M that is now worthless, less $5M in debts, $8M would be $240K at a 3% withdrawal rate. $12,800/month is very close to that. He'll probably come through bankruptcy in ok shape as long as he can cut his lifestyle back.

I don't think the pro sports leagues or their players unions do enough for these guys. I don't know what all they do, but a session or two as rookies and maybe a session a year, if they even do that, isn't really enough.

According to the article he is reporting an income of $7500/month and expenses of $12,800 so he has $5300 in negative cash flow.

 

[RunningBum]

According to the article he is reporting an income of $7500/month and expenses of $12,800 so he has $5300 in negative cash flow.

I'm also retired and have a negative cash flow.

 

[Senator]

I don't think the pro sports leagues or their players unions do enough for these guys.

I do not think high school does enough for these guys, and I know college is a lot different for a non-athlete...

 

[6miths]

Agree. I don't think high school does enough for anyone in terms of financial literacy. So few excellent high school athletes make it to the big pay day but it can't be said that the NFLPA doesn't have the resources to provide services for which there is clearly a need in terms of income, literacy and predators.

 

[Corporateburnout]

I'm also retired and have a negative cash flow.

I assume your portfolio withdrawals will make up for that. His assets will all be liquidated in bankruptcy so he can't retire any time soon and will need to get a real job if ha can't reduce his expenses.

 

[Sunset]

I'm also retired and have a negative cash flow.

I love that concept !!

I'm depleting my savings (all gone in about 60 yrs)

 

[RunningBum]

I assume your portfolio withdrawals will make up for that. His assets will all be liquidated in bankruptcy so he can't retire any time soon and will need to get a real job if ha can't reduce his expenses.

I don't think you read what I wrote very closely.

 

[Corporateburnout]

I don't think you read what I wrote very closely.

Got it. I'm a little slow this morning

 

[Chuckanut]

I do not think high school does enough for these guys, and I know college is a lot different for a non-athlete...

Why in the world blame the high school?

My guess is that he had every opportunity to learn, was encouraged and probably pushed to learn, but sometimes youngsters choose to blow it off.

 

[Corporateburnout]

Agree. I don't think high school does enough for anyone in terms of financial literacy. So few excellent high school athletes make it to the big pay day but it can't be said that the NFLPA doesn't have the resources to provide services for which there is clearly a need in terms of income, literacy and predators.

I also think that most of these athletes come from poverty and don't have the family structure to advise them on money management.

The last year Wes Welker played for the Pats he lived in my neighborhood and I ran into his dad who was visiting him and he told me that he made sure Wes put aside a substantial amount from his first contract and invested it for the long haul.

 

[2017ish]

I also think that most of these athletes come from poverty and don't have the family structure to advise them on money management.

The last year Wes Welker played for the Pats he lived in my neighborhood and I ran into his dad who was visiting him and he told me that he made sure Wes put aside a substantial amount from his first contract and invested it for the long haul.

Yeah, family matters a ton. Both of the NFL guys that I know have benefited from that (although both are still active--one as coach, one as player). Hard to learn prudence as you are being handed a seven figure contract and all your family members and friends have their hands out. (Remember the prior thread about the baseball player Ryan Howard having to sue his mom and brother!?.)

An advisor who I know was counseling a young man as to how to put $$ away. The athlete nodded appropriately at all times and, at the end, asked: "when do I get my Bentley?"

 

[Bigdawg]

this article could just as easily be about a megacorp exec who blew it all. I have a guy (just turned 65) working for me who has a military (E-8) pension, makes about 90K, has a wife that has always worked making about 30K and they live pay check to pay check. In every group there are people on both ends of the financial spectrum.

 

[Corporateburnout]

this article could just as easily be about a megacorp exec who blew it all. I have a guy (just turned 65) working for me who has a military (E-8) pension, makes about 90K, has a wife that has always worked making about 30K and they live pay check to pay check. In every group there are people on both ends of the financial spectrum.

Or about all the mega millions lottery winners who went bankrupt a few years after they won the big prize. Poor money management is not just for young athletes but it's a society wide issue.

 

[Car-Guy]

Amazing to me that anyone can lose that much money in such a short time but you read about it all the time and it's not just in sports, as has been pointed out already.

Everytime I read about one of these I think about John McAfee (McAfee Virus Software) and read up on his current activities. Here is an "educated" guy that was worth about 100 million before the 2007 market crisis. Lost all but 2 to 4 million (maybe less) depending on what source you read. At some point, he moved to Central America and got into all sorts of trouble. He finally came back to the US and is now running for president under the newly formed Cyber Party.

 

[zinger1457]

The NFLPA did try to help players but it hasn't turned out well. The financial advisers they recommended to players have swindled over $100M from NFL players.

NFLPA financial advisor program fatally flawed | National Football Post

 

[marko]

Then you see a guy like Rob Gronkowski who's socking away all his pay and living off his endorsements. Family keeps him on a tight financial leash. He'll be set for life.

I think the basic problem is so few in this country are taught any financial literacy...it's almost deliberately avoided in the school system.