Athlete money management

[gunnarthor]

http://www.si.com/nfl/2016/08/26/womens-week-nfl-wives-rachel-terrill-finances

 

Interesting article on NFL players and how they and their wives deal with money.  She says that 78% of football players experience financial hardship just a few years out of the game.  Pretty depressing.  I know there are similar articles out there on guys like Schiling and other baseball players who lost their money through a variety of different ways.

[Hosken Bombo Disco]

Yah. They get that far without learning life skills, and they certainly don't learn any during their careers.

[ashbury]

Yah. They get that far without learning life skills, and they certainly don't learn any during their careers.

I have a feeling that they can't all be that dumb, and that there are forces in play that we aren't aware of.

 

I'd be curious to know a rule of thumb as to what fraction of salaries we see published actually wind up in the player's bank account. Taxes, agent fees, fees to set up trusts, a somewhat externally forced higher standard of living, etc etc, lead me to think that maybe they see 50% of the first million, and perhaps even a lower fraction of larger amounts.

 

That still seems like a lot of money - and for the truly elite player it is - but if you're an average player and you plan to live off the interest for the rest of your life after your playing career, you need to net out with more than just a couple million in this age of low interest rates. The $15M mentioned in the linked article is a little laughably high as a threshold, unless you expect to live as a jet-setter, but for a comfortable life it's somewhere in the middle.

 

Therefore players are sometimes magnets for every get-rich scheme out there that proposes to triple your money with zero risk. Even if you're careful, it can be easy to fall prey.

 

 

[Willihammer]

 

Some seasoned veterans, admittedly feeling sorry for him, even offered Craig their hand-me-down custom tailored suits.

This guy sounds like a great teammate.

 

At the end of the night, while Craig’s stomach rumbled with hunger, we heard one of the highest-paid players on the team suggest that each couple “just throw in $400” to cover the bill.

This guy's a douche.

 

You do wonder about when a guy all the sudden earns the label of clubhouse cancer, if this is the sort of thing he might be up to. The guy with the fat free agent contract putting min. salary players in a position to either be buddies, or financially reasonable, but not both at the same time.

[Hosken Bombo Disco]

I have a feeling that they can't all be that dumb, and that there are forces in play that we aren't aware of.

 

I'd be curious to know a rule of thumb as to what fraction of salaries we see published actually wind up in the player's bank account. Taxes, agent fees, fees to set up trusts, a somewhat externally forced higher standard of living, etc etc, lead me to think that maybe they see 50% of the first million, and perhaps even a lower fraction of larger amounts.

 

That still seems like a lot of money - and for the truly elite player it is - but if you're an average player and you plan to live off the interest for the rest of your life after your playing career, you need to net out with more than just a couple million in this age of low interest rates. The $15M mentioned in the linked article is a little laughably high as a threshold, unless you expect to live as a jet-setter, but for a comfortable life it's somewhere in the middle.

 

Therefore players are sometimes magnets for every get-rich scheme out there that proposes to triple your money with zero risk. Even if you're careful, it can be easy to fall prey.

Yes, I amend my original comment after reading and reflecting on the article (not that I'm anyone to speak about life skills in the first place). I was thinking of those ballplayers who really have no excuses, some who luck out, some who don't, not to mention the Schilling types who turn the tables and hurt the lives of other people. But particularly in the NFL and NBA there are some really sad stories of guys who come from terrible poverty and have almost no chance, for those reasons you mention and in the article.

[TheLeviathan]

I imagine the effect is a lot like the one when you win the lottery.

[gunnarthor]

I agree with everyones thoughts and just add that money management is pretty hard for everyone.  In school we didn't learn anything about credit card debt, interest, savings, etc which seem like some things schools should teach - as opposed to home ex and shop.

 

I'm pretty sure if I was given 5m when I was 22, I would've blown a big chunk, if not all, of it.

[Squirrel]

I agree with everyones thoughts and just add that money management is pretty hard for everyone. In school we didn't learn anything about credit card debt, interest, savings, etc which seem like some things schools should teach - as opposed to home ex and shop.

 

I'm pretty sure if I was given 5m when I was 22, I would've blown a big chunk, if not all, of it.

I agree learning about some of those management skills is a very good idea. I disagree with your assessments that home ec and shop aren't things needing to be taught (and actually are no longer required in many schools today.) Recently I read an article about the uptic in anxiety and depression among young persons off to college and/or on their own for the first time, and their inability to function well with the lack of some basic life management skills. The article correlated some of this to the lack of courses such as shop and home ec no longer being required curriculum. While some kids do learn through trial and error or are taught these things at home by being assigned some basic chores, and do just fine, a lot of kids who never learn any of these things and are now thrust into do or die (okay, exaggerated a bit) situations have difficulties coping, not only with these types of things but with life in general. Maybe some kind of life management skills course should be required, one that teaches some basic things from laundry/clothing maintenance, to cooking, cleaning, basic home maintenance along with basic finance management.

 

I was lucky in my upbringing. This kind of coursework was easily learned at home. My mom was a home ec teacher, my dad a contractor, and together ran a business.