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pro athletes that go broke

CyinCo

CyinCo

Well-Known Member
Mar 24, 2006
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Clive, IA
This blows my mind as a financially responsible person. I suppose it shouldn't...but I'm still amazed how little some of these guys save and how much debt they carry despite making 100s of millions of dollars.

Bankrupt stars: Athletes who lost it all - Yahoo! Sports

Mike Tyson is a financial idiot. How could a person spend nearly half a billion so poorly?

Also, read Latrell Sprewell's quote about how $30 million of 3 years wasn't enough and he is "worried about how to feed his kids". Ha! What a warped sense of reality that is.
 
Let me count the ways. First of all taxes, probably at least 30%, fancy house, fancy cars, fancy house for Mom, fancy car for Mom, decking out fancy houses, partying and food money for a whole lot of people, and then again continued taxes on property. All this and having no concept of saving.
 
What a bunch of morons. The story about Sprewell, wow. That guy is intelligent. Good move by the T-Wolves not "itching" to pay more after what that jerk said.
 
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Cyclonepride said:
Probably the most important step is finding a financial manager who is actually looking out for your best interests, knows what they're doing, and also has the ability to tell them no.
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This is 100 percent correct. Instead most of them listen to whatever cling on buddy, lackie, groupie, whatever you want to call them says. Of course some idiot who is getting a free ride off these guys is going to agree with everything they say.

Many of these guys can't understand that even though they are making millions if they would just live like they are making 250-500K a year while playing and save and invest properly that they would be set for life. Instead they want to buy mansions, ridiculous cars, start up a record/rap label, start some string of restaurants, etc., which opens them up to even more cling ons to start getting the free ride.
 
I would say most pro athletes that squander fortunes do so on 3 fronts:

1) Ridiculously extravagant things like shark tanks, gold plated bathtubs, pet tigers (Tyson), etc. These things cost lots of $$$ and have zero value in the real world

2) Bad investments - usually with family, freinds, fellow players. Shady real estate deals, bad restaurants, etc.

3) "taking care of" family/entourages. I think it was Antoine Walker who bought a 5 BR, 6 BA (2 kitchens) mansion for his mom in Beverly Hills or something like that. Sure, you can buy your mom a house, she's probably earned that, but it's doubtful she needs a $10 million crib all to herself.
 
CarolinaCy said:
I would say most pro athletes that squander fortunes do so on 3 fronts:

1) Ridiculously extravagant things like shark tanks, gold plated bathtubs, pet tigers (Tyson), etc. These things cost lots of $$$ and have zero value in the real world

2) Bad investments - usually with family, freinds, fellow players. Shady real estate deals, bad restaurants, etc.

3) "taking care of" family/entourages. I think it was Antoine Walker who bought a 5 BR, 6 BA (2 kitchens) mansion for his mom in Beverly Hills or something like that. Sure, you can buy your mom a house, she's probably earned that, but it's doubtful she needs a $10 million crib all to herself.
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I think that about covers it, but I'd probably add...

4) Forgetting about Uncle Sam's piece of the pie.

5) Not factoring in insurance premiums on their mansions, boats, cars, jewelry, health, etc.
 
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CarolinaCy said:
I would say most pro athletes that squander fortunes do so on 3 fronts:

1) Ridiculously extravagant things like shark tanks, gold plated bathtubs, pet tigers (Tyson), etc. These things cost lots of $$$ and have zero value in the real world

2) Bad investments - usually with family, freinds, fellow players. Shady real estate deals, bad restaurants, etc.

3) "taking care of" family/entourages. I think it was Antoine Walker who bought a 5 BR, 6 BA (2 kitchens) mansion for his mom in Beverly Hills or something like that. Sure, you can buy your mom a house, she's probably earned that, but it's doubtful she needs a $10 million crib all to herself.
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I think you hit the nail on the head there. I'm actually kind of surprised the leagues don't do a better job of helping athletes with financial planning.
 
CyinCo said:
This blows my mind as a financially responsible person. I suppose it shouldn't...but I'm still amazed how little some of these guys save and how much debt they carry despite making 100s of millions of dollars.

Bankrupt stars: Athletes who lost it all - Yahoo! Sports

Mike Tyson is a financial idiot. How could a person spend nearly half a billion so poorly?

Also, read Latrell Sprewell's quote about how $30 million of 3 years wasn't enough and he is "worried about how to feed his kids". Ha! What a warped sense of reality that is.
Click to expand...



What do tigers dream of, when they take a little tiger snooze?
 
CarolinaCy said:
I would say most pro athletes that squander fortunes do so on 3 fronts:

1) Ridiculously extravagant things like shark tanks, gold plated bathtubs, pet tigers (Tyson), etc. These things cost lots of $$$ and have zero value in the real world

2) Bad investments - usually with family, freinds, fellow players. Shady real estate deals, bad restaurants, etc.

3) "taking care of" family/entourages. I think it was Antoine Walker who bought a 5 BR, 6 BA (2 kitchens) mansion for his mom in Beverly Hills or something like that. Sure, you can buy your mom a house, she's probably earned that, but it's doubtful she needs a $10 million crib all to herself.
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No. 3 - IIRC, Tyson's entourage each spent $5,000 per month on a cellphone bill. Can you imagine how much they talked to spend $5,000 and this is before the era of "data" plan.
 
cytheguy said:
I think that about covers it, but I'd probably add...

4) Forgetting about Uncle Sam's piece of the pie.

5) Not factoring in insurance premiums on their mansions, boats, cars, jewelry, health, etc.
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Yup, those are great points as well. Not only does it cost a lot to buy expensive stuff, it also costs a lot to own expensive stuff.

Most of these guys grew up with nothing, went through college with nothing, then signed mulit-million dollar deals right out of college. They just assume that the money will never run out and don't have any idea about real-world expenses like taxes and insurance.

We all ridicule them because we've actually lived in the real world, with real world expenses for a number of years. But I imagine that a vast majority of people would probably be in similar situations if the roles were reversed. The fact that most lottery winners end up with nothing after a few years supports that theory.
 
jsmith86 said:
I think you hit the nail on the head there. I'm actually kind of surprised the leagues don't do a better job of helping athletes with financial planning.
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The NBA has something, I think it's called Rookie camp, where they spend like 2 weeks in a classroom learning about how to manage their money. Every draftee has to do it. They just don't listen.
 
FarminCy said:
Many of these guys can't understand that even though they are making millions if they would just live like they are making 250-500K a year while playing and save and invest properly that they would be set for life. Instead they want to buy mansions, ridiculous cars, start up a record/rap label, start some string of restaurants, etc., which opens them up to even more cling ons to start getting the free ride.
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When you think about this, though, it's not really much different from many of us when we got our first jobs out of college. How many 20-somethings do you know that got a $40k/year job and went out and bought a new car, rented a really nice apartment, bought lots of new clothes/electronics/toys, and blew tons of $$ going out to eat/to the bars every weekend? Saving and investing are pretty far down the list of priorities for most people right out of college, regardless of income.
 
I'd say you were all right on the millionaires that are struggling right now, but there are plenty of guys that are just a year or 2 into the league that are struggling for real reasons. They only made about $200K after taxes last year and probably spent about $150K buying a house and maybe a car (not the smartest thing, but they probably didn't think this lockout would actually happen). I would probably have done the same thing. Now they are going to have trouble getting a job that wouldn't mind having them leave in a month if the NFL came calling. Probably not the easiest thing in the world.

I am not really giving them a break, because it is sort of asinine to not have saved some of ANY amount of money you make. But those guys are nothing like the guys with multi-million dollar contracts.
 
A co-worker has numerous accounts with professional athletes. The stories I could tell.

For example: A certain hoopster had his Escalade repo-ed twice before he was removed as a client.
 
Why do some athletes go broke? Because they are idiots. From an article on Albert Haynesworth I saw today.

"Haynesworth also faces charges in Virginia for allegedly punching a man during a road-rage assault. His trial is scheduled for May.

At one point last summer, he was also involved in lawsuits from a bank, an exotic dancer, a man injured in an automobile accident and complaints from his ex-wife that he wasn't paying for her health insurance or their children's bills."

Albert Haynesworth indicted on fondling accusations - NFL - SI.com
 
I don't know if there are college courses to financially educate athletes that have never had any money before, but there should be. It might prevent a lot of financial trouble for some of the athletes that blow it. But on the other hand there are plenty of us that go deeply into debt to get thru college and after we get our first jobs. Buying things on credit is encouraged thru advertising and even politicians on both sides encourage us to spend, spend, spend and worry about paying for it later. The days of bringing it in before you spend it went away about 30 years ago.
 
CYKOFAN said:
I don't know if there are college courses to financially educate athletes that have never had any money before, but there should be. It might prevent a lot of financial trouble for some of the athletes that blow it. But on the other hand there are plenty of us that go deeply into debt to get thru college and after we get our first jobs. Buying things on credit is encouraged thru advertising and even politicians on both sides encourage us to spend, spend, spend and worry about paying for it later. The days of bringing it in before you spend it went away about 30 years ago.
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You could make such a course mandatory, but most of these pro athletes "to be" have problems passing their underwater basketweaving classes, a lot of the time because they only care enough about class to remain eligible to play ball. It may help some, but do you really think such a class is really going to help the majority of the cases we're discussing right now? I doubt it...
 
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