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Old 09-19-2009   #1
Wolf
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Default Why do so many NFL players go bankrupt?

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Within two years of retirement, 78 percent of NFL players are bankrupt or in severe financial distress. Unlike Rocket Ismail, most of those players can't blame it on the negative karma associated with getting a bear hug from Michael Irvin.

How is this possible? The minimum salary for rookies in 2009 is $310,000. That jumps to $460,000 for two year veterans. How can men who earn so much have so little after retirement?

The Business Insider looked at that question today and listed 10 ways that sports stars destroy their finances.

Most of the reasons fall under the umbrella of one of the ways, "Act Dumb". (These include "Do Drugs", "Fight Dogs" and "Have Too Many Children". Two outta three ain't bad, Michael Vick(notes).)

Other paths to financial ruin like "Put Money in a Ponzi Scheme" or "Invest Too Much In Real Estate" can be more about bad luck than anything, but never underestimate the power of habitually poor judgment. (Or stupidity. Tomato/Tomahto.) Case in point, here's a blurb from the "Making Bad Investments" entry:

Rocket Ismail also squandered a fortune funding an inspirational movie; the music label COZ Records; a cosmetics procedure whereby oxygen was absorbed into the skin; a plan to create nationwide phone-card dispensers; a Rock N' Roll Café, a theme restaurant in New England; and recently, three shops dubbed It's in the Name, where tourists could buy framed calligraphy of names or proverbs of their choice.

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Ismail's case is more the exception than the rule though. The 78 percent number is buoyed by the fact that the average NFL career lasts just three years. So, figure a player gets drafted in 2009, signs for the minimum and lasts three years in the league: He will have earned about $1.2 million in salary. Factor in taxes, cost of living and the misguided belief that there will be more years and bigger paydays down the road, and it becomes a lot easier to see how so many players struggle with money after their careers end. Nobody plans on playing just three years in the NFL, you know?

http://sports.yahoo.com/nfl/blog/shu...urn=nfl,190555
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Old 09-19-2009   #2
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Default Re: Why do so many NFL players go bankrupt?

Because they spend more than they make? Just because they make a lot of money doesn't mean they ever learned financial discipline.
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Old 09-19-2009   #3
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Default Re: Why do so many NFL players go bankrupt?

Because they have been made to think thy're special all of they're lives.

They're dumba**es who failed to take advantage of their free education. Economics 101

A fool and his money will soon part.
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Old 09-19-2009   #4
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Default Re: Why do so many NFL players go bankrupt?

Do they go bankrupt more often than someone who won the lottery at 19 years old?

With the fact that they are making usually around half of what their winnings were after taxes, not to mention a prorate for taking a lump sum rather than yearly payments, it isn't unusual for lotto winners to go bankrupt. Similarly, athletes usually don't make anywhere near what they think they make after taxes, and fail to prepare for the 40 years of their life when they won't have an income unless they can be a TV head.

I think there are also thousands of players who don't get the opportunities of a top pick. Making 300k a year until you suffer a life altering injury is quite often not enough to prepare for a lifetime after football.
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Old 09-19-2009   #5
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Default Re: Why do so many NFL players go bankrupt?

they come from nothing their whole lives then get a ton of money and don't know what to do with it. they're not rich white WASPs who've been around money their whole lives and smart people who know how to handle money
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Old 09-19-2009   #6
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Default Re: Why do so many NFL players go bankrupt?

The first thing I'm getting is a financial advisor. I wouldn't know how to spend that much money either. I have a tough enough of time managing our finances as is.
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Old 09-20-2009   #7
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Default Re: Why do so many NFL players go bankrupt?

Most football players are spoiled, pampered, prima donnas who've never been told "no" in their entire life and have had everything given to them including grades all through school. I'll guess that half of them can't spell the word football. Also like SteelbTexan said most never took advantage of that free college eduction by actually attending class or paying attention or doing any of the work themselves.

Nitro, the key to that much money is not spending it, save it or make wise conservative investments.
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Old 09-20-2009   #8
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Default Re: Why do so many NFL players go bankrupt?

It depends on the circumstances. If a player makes 30 or so million during his career, poor judgment, unethical financial advisors, or spending too much on things that don't give a positive return.

If the player makes 1 million over a two or three year career in the NFL, then the player will need to invest (conservative) most of his earnings. Chances are in this situation, once he leaves the league, his income could drop to $50K a year and unless the three years of salary worked in the positive, then reality sets in quickly. If he has purchased the big house and the fancy car, and the latest in fashion, that million is gone.
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Old 09-20-2009   #9
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Default Re: Why do so many NFL players go bankrupt?

I went to the Dave Ramsey Show in Atlanta yesterday. He said that there is a certain Sports Agent that buys his finanical management program for each of his clients.

Now if the players actually read it, he didn't say.
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Old 09-20-2009   #10
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Default Re: Why do so many NFL players go bankrupt?

Too many people on this board are going overestimate their ability to handle going from average college student to making $250,000 successfully. No matter how much your parents made, the average 22-25 year old is not financially savvy. I have not seen them recently, but the numbers for rock stars and child actors is also pretty high for pretty much the same reasons the NFLers is too much money too fast, a fast lifestyle, and thinking that more money will be on the way.
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Old 09-20-2009   #11
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Default Re: Why do so many NFL players go bankrupt?

the thing is, no matter how rich i get, totinos pizzas are still only going to be 99 cents, and I can still only eat 2 of them per meal.
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Old 09-20-2009   #12
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Default Re: Why do so many NFL players go bankrupt?

I think also that it is easy to get caught up in the hype of an extrodinary lifestyle, and given that some don't act in the best interest of their future. I watched the video The Crooked E, and thought about this topic, on a former employee's account of his experience at Enron. It was amazing how within six months the employee began to embark on a lifestyle based on how he saw his future earning as an executive of one of the most recognized corporations in the country.

Taking that into account, if an individual with an advanced degree from a highly recognized business school can get caught up in the glamour of a lifestyle of prestige, then one with less business knowledge would probably be more vulnerable.


It would be interesting to see stats on people in other professions faced with some of the same financial woes as professional athletes.
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Old 09-20-2009   #13
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Default Re: Why do so many NFL players go bankrupt?

I think I'd be one of the few millionaires to live off the clearance rack.
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Old 09-20-2009   #14
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Default Re: Why do so many NFL players go bankrupt?

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Originally Posted by swtbound07 View Post
the thing is, no matter how rich i get, totinos pizzas are still only going to be 99 cents, and I can still only eat 2 of them per meal.
Yeah man, but not all of us have the metabolism of a great white. If You eat that junk you'd look like Randy Moss. I my a$$ eats that I'll look like Algea Crumpler.
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Old 09-20-2009   #15
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Default Re: Why do so many NFL players go bankrupt?

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Originally Posted by NitroHonda View Post
The first thing I'm getting is a financial advisor. I wouldn't know how to spend that much money either. I have a tough enough of time managing our finances as is.
An advisor that is not a friend or a relative. Someone who has a legit track record.
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Old 09-20-2009   #16
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Default Re: Why do so many NFL players go bankrupt?

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Originally Posted by steelbtexan View Post
Because they have been made to think thy're special all of they're lives.

They're dumba**es who failed to take advantage of their free education. Economics 101

A fool and his money will soon part.
I don't disagree on any point you've made but the other side of this coin is that these players have been taken advantage of all thier life as well.

High school teacher that let players skip class and skate on homework aren't doing these kids any favors. Not to mention how one sided the NCAA is towards its athlete students. Yes, these kids are athletes first, fund raiser's second and students third.

My cousin is the starting left guard for a major college in the SEC. His day is planned out for him; even in the summer time.

While my cousin is a smart kind and taking a full load of solid courses, the majority of the players are taking Basket Weaving 101 instead Economics 101.

I don't want to make excuses for these guys but when they retire, when thier career's are ended by injury or they are cut for the final time, they are not prepared for a world that isn't set up for them.
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Old 09-20-2009   #17
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Default Re: Why do so many NFL players go bankrupt?

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Originally Posted by swtbound07 View Post
the thing is, no matter how rich i get, totinos pizzas are still only going to be 99 cents, and I can still only eat 2 of them per meal.
Pizzas or pizza rolls? If you can only handle 2 pizza rolls at a time we need to get you help.

I actually had no idea they made whole pizzas, and at 99 cents we may need to get you help anyway.

Anyway... as for the bankrupt NFL players, excuse my while I play the tiniest violin while I nail myself to the tree of whoa-is-me. You just made 10 mil a year over 5-10 years and now you're broke?

Suck it.
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