According to Bleacher Report, [February 29, 2012], 60% of NBA players file for bankruptcy within five years after retirement! Don’t be next!
In our opinion, NBA Players go broke for four main reasons.
First, their egos! Don’t forget, these are young men in their late teens to early thirties. Do you remember how you behaved before life beat the crap out of you? The personality trait that helps them achieve success on the court, often time dooms them off. With an abundance of money, power and celebrity no wonder so many wind up broke!
Second, many players are taken to the cleaners by the very people they trust most – agents, advisors, families, friends, and associates.
Third, many are influenced by pop culture to live reckless lifestyles.
Fourth, it’s not unusual for players to have little-to-no financial education. They trained all their lives to be professional athletes, not financial managers.
Causes for NBA players going broke:
- Career Duration – on average, careers typically last 4 to 5 years
- Ego – Players enter the game young and immature and general may not listen to sound advice
- Lifestyle of over Indulgence and Spending – parting, girls, clubs, shopping (cars, jewelry, boats, homes, gambling, etc.)
- Fallout from choosing wrong women – divorce, baby mammas, child support, lawsuits and bad publicity
- Influencers encouraging bad decisions – family & friends, entourage (associates, managers, handlers) and hangers-on
- Too much Agent control of personal, financial and career decisions
- Bad advisors – financial advisors, investment managers, insurance brokers, CPAs, attorneys and other power brokers
- Bad investments – music, tech, restaurants, clubs, bars, gyms, auto dealers, and many others
- Lack of adequate planning for the future
- Little to no financial education
According to Sportster [June 25, 2017] and the Bleacher Report article referenced earlier, below are 10 NBA Players who went broke after retiring:
- Allen Iverson
- Charles Barkley
- Scottie Pippen
- Dennis Rodman
- Antoine Walker
- Derrick Coleman
- Vin Baker
- Latrell Sprewell
- Eddy Curry
- Kenny Anderson
Recommendations and suggestions to prevent the same thing from happening to you:
- Stay out of trouble!
- Live well, but be frugal – Spend way less than you earn
- Keep your agent focused on his job and out of your private life
- Hire a Dream Team of Advisors you trust, then listen to them
- Make sure your Financial Team [Financial Advisor, Tax, Insurance, Money Manager/s, Estate & Trusts attorney] do not work for the same company – Check out credentials, expertise, etc.
- Use debt in a smart manner, e.g. to build personal and business credit
- Make sure everyone around you adds value to your life and career
- To help those who have helped you, provide job training & job opportunities via your network instead of giving away cash and/or creating no-show jobs
- Take responsibility for your own affairs – Get educated!!
IMPORTANT NOTE: DON’T GIVE ANYONE POWER OF ATTORNEY OVER YOUR FINANCES and/or ACCESS TO YOUR CREDIT CARDS OR BANK ACCOUNTS. DO SO, AND THERE IS A HIGH PROBABILITY YOU WILL GO BROKE!!
CINDY A. FIELDS, Certified Wealth Preservation Planner, Certified Financial Planner™, Trusts & Estates Practitioner, Chartered Financial Consultant, Registered Employee Benefits Consultant, Chartered Life Underwriter, Certified in Long-Term Care, Registered Health Underwriter, MBA-Finance NYU Leonard N. Stern School of Business
President, Loyalty Alliance, Inc. — REDEFINING WEALTH SERVICES™
150 East 58th Street, 38th Fl., New York, NY 10155
Phone 212.570.1212; Email firstname.lastname@example.org Web: www.LoyaltyAlliance.com