Why should the money a player makes last him his entire life? Is there something wrong with them going out and getting jobs after they're done playing?
the article mentions ron artest, i remember seeing something on television (don't remember the program), how he was broke after his rookie year. he hired all these guys out of his neighborhood, remember this is post 99 CBA so he was on a rookie salary.
This article makes me want to go take advantage of some pro athletes. It also makes me think about other rich people. I know a guy who came from a middle class family (army brat) and became a teacher, but married into wealth. So, to maintain the lifestyle expected for the daughter and grandchildren of his wealthy father-in-law, he has to live in the rich neighborhood, send the kids to the rich private school, and otherwise be a rather conspicuous consumer. But, he was doing that with a teacher's salary, spending many times over what he earned. There was a lot of pressure on him to show he was worth the wealth. So, he'd take money and invest in different things, especially real estate (which must be taking a bath now), trying to leverage his family's capital to create his own success just to justify himself. I wonder if athletes feel that same pressure -- to not just spend that money on houses and cars but to invest it in some business they can understand and grow it into a stable revenue stream.
Nothing at all wrong with that, though I think the point would be to maintain a more modest lifestyle during the big earning years that can be maintained once the playing career is over regardless of what the post-sports career looks like. Obviously not all of them do. We've got several pro athletes or former pro athletes living in non-gated neighborhoods here in Plano.
Unfortunately that is the common mentality. None of these players made anywhere near that growing up either so they think it's a whole lot. And it is a whole lot if you can guarantee you would be making that salary for 40 years. But you're making it for a few prime years and then you got 30-50 years of living after.
Because only a small fraction actually got a real education. Most athletes bomb badly in the real world because they have zero business sense, just capital.
Because only a small fraction actually got a real education. Most athletes bomb badly in the real world because they have zero business sense, just capital. They aren't like us, growing up with the understanding that we need an education or job skills to make it through life.
If you really believe that, I don't think you'd be smart enough to stretch that money out for the rest of your life. Post taxes and agent fees, you're seeing maybe $150k for lets say 5 years, that's $750,000 for the REST OF YOUR LIFE. The original poster stated "just a few years" so it could be even less than that. You think you can live on $750k for the rest of your life? Lets say you make it for 10 years in the league, $1.5 million. You can make it on that type of money, but I'd say the only way to do it comfortably would be to live in a cheap one bedroom apartment, buy used cars, and never have children for the rest of your life. Now, since you wouldn't be working, what are you going to do with all of your free time the rest of your life? It's going to be boring and you're also going to need to be very frugal with your money since 750k-1.5 million is all you're going to have to live on for the rest of your life. Lets say you're thirty years old by the time you're done in the league, having pocketed about 1.5 million. The life expectancy in the U.S. is 75 years old for the average male. 1.5 million dollars divided by 45 is thirty-three thousand dollars per year. If you saved $750k during that time, you'd have about 16 thousand dollars per year to live on. Then you need to tack on inflation, which means your money will become significantly less valuable over the next 45 years. I suppose you could make it on that type of money for the rest of your life, assuming no major health problems...but it would be a life near poverty if you had any children. Certainly not "rich beyond your wildest dreams."
It really depends on how much you make. For example, if I banked a few million in a few years then yes, I could live off of that for the rest of my life. Give me $3.5M (after tax) and I would be fine. I could buy a modest home and pay it off immediately (not all athletes are in gated communities), a Honda and make it off 50K a year for the next 60 years (that’s $3M right there). Again, my home is paid for and it's not like I have debt since I didn't have to pay for school or anything. That might be tough to do for the average football player, since their shelf life is so short. But I don't see why an average basketball or baseball player couldn't do the same thing.
Agreed. While there are a bunch of crooks out there, I'd like to think there is at least one voice of reason in each athlete's life to try and steer them in the right direction.
One thing to remember - if you're retired then you're either at home bored out of your mind... or out doing something, which means you're spending more money than you normally would if you're working. Working has a few benefits - you're actually making money... and you're not spending money. Being retired you'll be spending a good amount just trying to not be bored.
I think one thing you didn't take into account is interest. If a player can build ANY kind of nest egg of 10-20 million, the interest alone is enough to live very comfortable for the rest of their lives without ever having to touch the money itself.
I wonder if there is a reason more athletes don't use trusts as a vehicle for retirement planning. They could fund the trust yearly, then upon their retirement have the trustee distribute the interest on the corpus on a yearly basis. With a high enough initial investment, they could just live off the interest for the rest of the year without having to touch the corpus.
I think the problem with most players is that in the end, they don't realize how short their careers are. Most normal people have skills that can easily take them into their 50s, and usually earns more and more as they get older. Athletes are just the opposite. They start off with a huge amount of money, and it vanishes into the thin air after just a few years. And they're left with no job skills for anything else. So it's actually quite easy for such a person to go broke. You just have to spend your money normally, and eventually you'll see that you have 40+ years left in your life and no more income.
Great to see someone started this thread. I actually represent Ed Butowsky. He's a great man who doing a great service. You can listen to him live if you live in Dallas every weekday from 4:00 - 5:00 on CNN 1190's "The Wall Street Shuffle". You can check out our website here: www.thewallstreetshuffle.com ~ OR
I feel that athletes are overwhelmed by the amount of money they have in their hands. Many want to fulfill their childhood dreams of buying the fanciest car, having a badass house, etc etc. I think another problem is those that feel the need to help their whole family and friends. Athletes need to realize that there is nothing wrong with denying those you grew up with. In most cases friends were just there for you but in now way do you now go out and buy them a brand new car or do them favors by given them money periodically. Family can be a very pressured situation but at the end just think about your immediate family. Help a family member when possible but don't just go out and help everyone for the sake of helping. Hell, don't even worry about family being angry at you for not giving them money. I think it is stupid that as soon as you get rich you have to help everyone. That just isn't logical. One must learn how to manage their money and look out for himself (and wife and children first). After that learn to set a cap at how much you will help your immediate family (mom, dad, sisters and brothers), if any. Parents are okay to help but to think sisters and brothers also need to be dependent of you is ridiculous. I don't see anything wrong with helping siblings but they can't become dependent of your salary either. Athletes need to learn the meaning of the word no. Basically they need to get educated how to handle such a large sum of money. It's sad to see all these cases but unfortunately one can quickly see that many of these athletes are those that go from poor to rich in an instant.
I bet that's what they thought too. Thing about money is, if you cant keep yourself afloat with 40K a year, 300K wont do it either.
If any of you are implying that Dikembe's wife-to-be was a gold digger, there are two sides to the story, especially when you read what the pre-nup supposedly entailed. She was a Stanford med school student, so it wasn't like she wasn't going to do well.
