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An interesting new study has come out regarding NFL players (covered in various news outlets). The current NFL minimum salary is $435,000 a year for a rookie and $970,000 for a player with nine or more years in the league. But again we find that all that money doesn’t last long after their career ends.
A new study found that nearly 16 percent of former players end up filing for bankruptcy within a dozen years of retiring.
This isn’t surprising after watching the 30 for 30: Broke – on athlete bankruptcy.
It just proves yet again, that you can go broke at any income level. What you make matters, but it’s even more important how much of that money you manage to keep.
I genuinely feel bad for these guys. They are coming in this at an extreme disadvantage. Why?
They are young
You people are stupid. I say this only recently exiting what I would consider that phase. 18-25 is not a time to suddenly be handed millions of dollars. Your hormones and decision making aren’t at their best. Are this exceptions to this? Of course, but God knows what the percentage of kids of any background wouldn’t blow those levels of cash given the chance.
They are not prepared
The average college athlete does not have the family background training them to deal with wealth from a young age, the way someone who inherits a business, trust, or other asset might be. There is no structure in place to help guide them. It’s quite possible the people around them (friend and family) will bring them down.
They have the longest retirement of any career
No 22 year old athlete full of testosterone and at their physical peak can picture their career ending and no 22 year old can easily picture what 60 years looks like. It’s very hard for someone to suddenly be handed huge amounts of cash and rather than spend it, be told they need to save enough of it to last them for the rest of their lives.
Professional sports is a culture of spending
It’s hard not to want to be a baller when everybody around you is flashing cash. Expensive cars, homes, vacations, jewelry, etc… is a tough lifestyle to maintain.
What can we learn?
I. Surround yourself with supportive people.
Don’t let the wrong friends and family bring you down.
II. Ask for help ( a pro if you need it)
These guys would be so much better with a financial advisor. If there’s no one in your life to give you a hand, go hire somebody.
III. Remember the long game.
We all need to keep in mind that we’re running a marathon, not a race. We have to save and prepare for the next 50 years.
IV. Don’t keep up with the Jones’
On some level, whether NFL star or accountant, we all have a peer group we compare ourselves to. On all levels somebody is making more than us and spenidng more than us. Somebody has a nicer car, bigger house, or fancier vacations. Don’t compare yourself to them. Run your own race.
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