Have you ever wondered what it’s like to be a high-profile superstar athlete and have all the fame and glory that goes with it? Think of all the things you could buy with that kind of money! For most people, it would be a dream come true to be earning millions of dollars! What could possibly go wrong? How should a financial advisor handle these clients with such astronomically high net-worth?
Unfortunately, a lot can – and often does – go wrong. We’re going to cover just a few of the sad stories that some big-name players have gone through, and that’s just scratching the surface! Sports Illustrated estimates that 78% of retired NFL players and 60% of retired NBA players are broke relatively soon after their playing career comes to an end.
When so much money is involved, players have a hard time finding someone they can trust.
Donnie Nickey is a former NFL player who now works as a financial advisor to help educate players who have no idea just how ruthless sports agents, accountants, and even family members can be.
A significant part of the problem today is that pro athletes just have no idea what to do when they go from nothing to superstardom with a seemingly unlimited bank account. A financial advisor will need to educate them on what high-quality opportunities look like, and also work to build trust right away, since there are so many horror stories out there. Players are extremely hesitant to turn their finances over to someone they don’t know well – as they should be.
Another key point to remember is the kind of pressure that a young athlete from a humble background can feel from his friends and family.
Here are 5 pro athletes who have hit tough times financially:
Michael Vick once was earning a cool $11.4 million. After being sent to prison for his involvement in the dogfighting operation (and earning just 12 cents per hour working there), it seemed as though all would be in the clear when he signed with the Eagles for $100 million.
Unfortunately, his mistakes of the past (giving out too many hand-outs, failed business ventures, and child support dues to name a few) came back to haunt him, and approximately 2/3 of every dollar that he earns is going towards his debt.
After a lengthy career in Major League Baseball, Dykstra’s net worth was around $58 million. Most people would be Ok with that! Unfortunately he was caught up in a steroid scandal years later, and his family abandoned him completely. He had to file for bankruptcy.
This past March, he was sentenced to a prison term involving car theft and submitting false financial statements.
Andre Rison was once a big-time receiver who played for a number of NFL teams. He had a hard time dealing with the pressures of high-profile living, and felt the need to buy things bigger and better than those around him.
Rison also noted his confusion about the amount of tax money he owed on his massive paychecks. His financial life also ended in bankruptcy, and he’s now coaching at Michigan State.
Kosar was known for his intelligent decision making on the field, and her earned around $19 million in total from his time in the NFL. His is a case in which the family took advantage of his wealth, and his fortune collapsed beneath him after a divorce and some unfortunate real estate investing.
Kosar’s father used Bernie’s money to pay off his own debts, and eventually Kosar was forced to file for bankruptcy.
Antoine is a well-known NBA All-Star, but hasn’t fared so well financially over time. He earned an estimated $110 million playing in the NBA, and was “living large” with his close friends included on the fun.
Unfortunately, problems with the housing market meant bad news for his investments, and one of his financial advisors had been dishonest with his dealings as well. After filing for bankruptcy, he recommends that players wait until retirement to start investing heavily with their money.
As you can see, it isn’t all fun and games among professional athletes, and making it big doesn’t mean you don’t have to worry about money problems any more. Finding a trustworthy financial advisor is important for anyone, regardless of the level of income, and can mean the difference between a secure retirement and winding up in bankruptcy.
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