Why do so many NFL players go bankrupt?

[joethiesmanfan]

Originally Posted by GMScud

That's the thing though- a lot of them aren't even smart enough to care to divide X by Y, as you say. Not that they can't grasp the concept, they just don't give a shit. Zero foresight, and an inability to look even months into the future, let alone years. A lot of it is a lack of education and/or good parenting, and a lot of it is, as GusFrerotte mentioned, the Hip Hop Culture so to speak. Every single hip hop video/song you see/hear nowadays talks about nothing except jewelry, cars, money, drinking at the club, and other shortsighted possessions that do nothing to build wealth, rather just bleed it. But hey, if that's cool, trendy, and will get you laid and recognized, why not right?

Also, a lot of these guys who end up broke genuinely thought they were doing the right thing by investing and diversifying, only to be taken advantage of by attorneys, agents, representatives, etc who fed them BS promises of high returns only to milk them for every cent. Gotta surround yourself with the right people.

When I think about what I would do with wealth like this, it really, really annoys me to hear about these wasted fortunes.

Once again hip hop does not claim these clowns. If not for their benevolent benefactors they would be nothing. These fools are spoon fed what do you expect.

[Dirtbag59]

Originally Posted by GusFrerotte

No, but the stereotypical Hip Hop videos usually had in the past a bunch of guys clad in lots of gold, in the back of a huge mansion with a huge pool, with a ton of bikini clad babes around, with the rapper usually having a ton of cash around and tossing it in the air. Total materialism. Hair band music in the 80's was basically the same. Just party all the time, don't give a shit about the future.

That reminds me. From now on when white people go broke I'm going to blame on HBO's Entourage even though the main character has been broke on the show once or twice.

Ironically I do believe that there is some truth to the hip hop culture having a negative influence on athletes. Fortunately hip-hop is moving away from that these days, as I think people have gotten fed up hearing songs about how "I have dis, dat, and all of dis." Now it feels more of a fusion of techno, eurodance, and classic hip hop with more of an emphasis on having a good time. Of course theres still more then a few "look at what I got" rappers out there but the good news is they're starting to fade into oblivion.

Glam rock was actually kind of similar in the 80's.

[GMScud]

Originally Posted by joethiesmanfan

Once again hip hop does not claim these clowns. If not for their benevolent benefactors they would be nothing. These fools are spoon fed what do you expect.

I'm not saying hip hop itself is solely responsible. It's more of a way of thinking that's perpetuated by the "hip hop culture" so to speak. The whole "look at how much money/material goods/women I have" mindset. Anyone watch the Mayweather/Mosley 24-7? Mayweather is a prime example. Goes to the mall with $20k in cash in his pocket just for fun, and brags about it the whole time. He said it comes from watching his father always have "knots of dough" in his pocket. You think anyone could convince Floyd that that's a poor lifestyle choice?

A lot of these guys grew up with nothing, so as much as it may be about the hip hop influence, a lot of it could be about an over-compensation for past insecurities. They were raised with no material goods, so now they have to have every toy imaginable to prove to the world that they made it.

[saden1]

Originally Posted by Schneed10

Let's not sugarcoat it, you don't need an MBA, CFP, or read any financial self-help books to manage your money. You simply need basic arithmetic.

I have X amount of money. I spend Y per month. It will take me X divided by Y number of months before I run out of money. That simple.

The bottom line is these guys aren't thinking, at all. They simply WANT things. Want want want, with no regard to "should I".

We're talking about people who aren't even aware they need to manage thier money themselves...people who can't detect a poor investment from a good one. When it comes to finances these guys are truly handicapped. They don't have the basics down let alone the ability to manage millions of dollars.

[SmootSmack]

A lot of these athletes put their trust in people they shouldn't. Even if they should, you should never put 100% trust in anyone else when it comes to managing your money. I've also seen a lot of these people invest money in their friends' businesses or even just business ideas. And if/when they try to get out of it they're faced with the guilt trip of "Aw man, you've changed. Forgot about us"

[Giantone]

Originally Posted by SmootSmack

A lot of these athletes put their trust in people they shouldn't. Even if they should, you should never put 100% trust in anyone else when it comes to managing your money. I've also seen a lot of these people invest money in their friends' businesses or even just business ideas. And if/when they try to get out of it they're faced with the guilt trip of "Aw man, you've changed. Forgot about us"

Good Point,I've worked with a few former athletes and one even had a degree from Georgetown.Yet they all listen to their friends and put money into things they never checked out.
In the old days before sports became a fulltime job these guys had to get jobs after the season was over so most were prepared to go on after their careers were over.Now these guys think that when they are retired ....they can go another 50 years with out working ........and with some of the amounts they make the're right yet you still must be prudent with your money.If you make 10 mill your agent gets 10% off the top,IRS gets 4 or 5,then you take care of Mom or Mom and Dad ...another 1 or 2...leaves you 1 or 2 for yourself and if you have kids or a wife that will be gone quick.

[Daseal]

If I were an agent, I'd make it mandatory for my clients to have a financial adviser before the draft. I'm not great with finances, luckily my bank is always very good at helping me out.

If you're eligible for USAA -- there's not a single thing I haven't loved about the company.

I still think the most amazing thing, is the pure number of lottery winners who blow the money in no time.

[djnemo65]

I think Daseal's cogent observation that lottery winners succumb to the same insolvency suggests that we can't blame this all on hip-hop. Here's a really good article on some celebrities of yore who also went bust: Tales of the Broke and Famous by Stephen Schochet as submitted to things-and-other-stuff

[Longtimefan]

Originally Posted by GusFrerotte

If a guy gets all that dough for playing a game, he is going to be tempted to blow it by living the fantasy/illusion that has been "programmed" into him.

"Easy come, easy go" is a saying that grips so many young athletes. It's prevalent in all sports and mainly because of reasons others have already expressed.

When it comes to squandering wealth, I always felt there was no greater example than Roberto Duran. Guy made enough from three fights with Sugar Ray to last the average person several lifetimes. However, spending eight thousand dollars a night in bars is a typical example of not knowing what to do with it.

[freddyg12]

Daseal's point about lottery winners pretty much points out the obvious in this to me; it is an extreme culture shock of sorts to go from low to mod. means to being wealthy. To some degree it doesn't matter what your socioeconomic background is, there are people from all walks of life who've become rich only to go broke. Even smart people who happen to make bad decisions.

Have you ever discounted somebody's success because they inherited the family biz or family money? Well compare that person's financial mgmt. to some of these guys. We tend to disregard "old money" people as being privildged, and maybe they are to a degree, but there's more to managing a lot of money than most low to middle class people understand.

Maintaining wealth is just as hard as achieving wealth. In football terms, it's harder to repeat as super bowl champions than it is to win that first one. Most nfl players, and I believe most of the general public, don't have a concept of what it takes to maintain wealth.

[Schneed10]

Originally Posted by SmootSmack

A lot of these athletes put their trust in people they shouldn't. Even if they should, you should never put 100% trust in anyone else when it comes to managing your money. I've also seen a lot of these people invest money in their friends' businesses or even just business ideas. And if/when they try to get out of it they're faced with the guilt trip of "Aw man, you've changed. Forgot about us"

When it comes to trusting the wrong people, I agree, that's just as retarded. I mean how hard is it to simply leave all your money in a savings account until you've gotten yourself a little more educated on how to handle money?

If you piss it away you have only yourself to blame. Lack of foresight, lack of understanding, lack of thought put into it, lack of judgment when selecting money managers, it all comes back to the athlete.

[Schneed10]

Originally Posted by freddyg12

Daseal's point about lottery winners pretty much points out the obvious in this to me; it is an extreme culture shock of sorts to go from low to mod. means to being wealthy. To some degree it doesn't matter what your socioeconomic background is, there are people from all walks of life who've become rich only to go broke. Even smart people who happen to make bad decisions.

Have you ever discounted somebody's success because they inherited the family biz or family money? Well compare that person's financial mgmt. to some of these guys. We tend to disregard "old money" people as being privildged, and maybe they are to a degree, but there's more to managing a lot of money than most low to middle class people understand.

Maintaining wealth is just as hard as achieving wealth. In football terms, it's harder to repeat as super bowl champions than it is to win that first one. Most nfl players, and I believe most of the general public, don't have a concept of what it takes to maintain wealth.

No, no. It's not at all. I have $100 million in the bank, I'll put it in safe investments. It earns 3%, so I make $3 million a year. I can spend $3 million a year and not lose any of my $100 million.

$3 million annually amounts to $250,000 monthly. I can have three big mortgage payments on three big homes throughout the country. I can buy a car each month. I can eat out whenever I want to. It's not hard to budget for that at all.

What's not easy is coming into $100 million. Every single intelligent person on this message board would handle $100 million A LOT better than these moron athletes.

[Schneed10]

When it comes down to it, this epitomizes the dumb meathead jock. It's a disgrace.

[MTK]

If you tossed a few mill at a bunch of us here, I'm sure more than a few would end up in the same boat as these athletes. People in every walk of life have money management issues no matter how much you make.

[irish]

I think any 20 yr old that becomes an overnight millionaire would have trouble controlling their spending habits especially when it seems like the gravy train will roll on forever (even though it wont).

I dont think hip hop has anything to do with it but I do think that when someone comes from a poor background and they suddenly have a lot of $ it seems like they could be more prone to start over-enjoying a lifestyle they never dreamed they'd have.