NFL players can't handle money

[vikingfan]

http://www.kansascity.com/2012/04/28...ing-risks.html

It cites mostly KC-area examples but the numbers are staggering.


According to a piece published in Sports Illustrated in 2009, 78 percent of NFL players go bankrupt or suffer financial distress two years after retirement. That number was up from ’97, when Kennison’s card read that 75 percent of retired players were bankrupt, divorced and unemployed after two years.


Brings home that it doesn't matter how much money you make, it's how much you spend. Thoughts?

[BHF]

I work in consumer banking, and I'm constantly stunned by the number of otherwise intelligent people who haven't the first idea of how to budget and manage their money. Many people just aren't taught basic financial skills. So when you take a lot of these pro athletes, a large number coming from low and lower middle income families, and hand them a kings ransom, I can't say that I'm terribly surprised by these numbers.

[Hatethis]

It would be interesting to compare it with other proffessional athletes or even entertainer.

[Niner Empire]

the problem with nfl players is that they think there going to play for a long time, that just isnt the case for a majority

[Chavezz]

I just wish they were smart enough to hire a legit financial planner. Not cousin Ray Ray. If I suddenly won the lottery I'd realize that i'd need some help managing that amount of money.

[WIZ]

The problem is you're taught to not talk about money from early on. You're then offered a credit card when you get to college. There's little to no education on money. Most learn on the fly. I went to college for accounting and that was the first I learned of money. If someone offered everyone a couple hundred thousand at high school graduation most would be broke in 2 years. It's no surprise.

Look at the number of credit card companies and their profits. Why would anyone carry a balance? Most do.

[Chavezz]

Good point. I don't want to get into the educational system here but basic personal finance should be taught at the high school level. I'm not talking about accounting, I'm talking about BASIC personal finance. Here's how you write a check, this is a credit card and the reasons for using/not using them. How to set a personal budget etc. Let's face it, not everyone is meant for college and high school doesn't do a lot to prepare them for "real life".

[Anointed One]

The problem is you're taught to not talk about money from early on. You're then offered a credit card when you get to college. There's little to no education on money. Most learn on the fly. I went to college for accounting and that was the first I learned of money. If someone offered everyone a couple hundred thousand at high school graduation most would be broke in 2 years. It's no surprise.

Look at the number of credit card companies and their profits. Why would anyone carry a balance? Most do.

Good point... My girls are now 9, 11, 13... I taught them at a very young age to use their check ledgers to keep track of their spending... For 5 years now, they all still use this and rarely are off on what they have in their wallets... When I hand out their allowance on Sunday nights, they must have their ledgers balanced w/ the exact cash in their wallets or they oh my $0.50... It's cute watching my 9 year old post something in her ledger at the cashier's counter when she buys a piece of candy for $0.75 or something...

Anyways, i'm a firm believer in teaching my kids at a young age how to handle, save and spend their money wisely... If the school's aren't teaching it to our kids, who's going to?

[The Q]

There are companies out there, but people are ignorant enough to believe the institutions who call them "scams."

[Yellowknifer]

I just wish they were smart enough to hire a legit financial planner. Not cousin Ray Ray. If I suddenly won the lottery I'd realize that i'd need some help managing that amount of money.

Many people who hired legit financial planners lost near everything during the initial collapse of the housing market.

[Yellowknifer]

I work in consumer banking, and I'm constantly stunned by the number of otherwise intelligent people who haven't the first idea of how to budget and manage their money. Many people just aren't taught basic financial skills. So when you take a lot of these pro athletes, a large number coming from low and lower middle income families, and hand them a kings ransom, I can't say that I'm terribly surprised by these numbers.

I think the divorce issue is pretty big. My educated guess is, like any celebrity, NFL players inevitably suffer through these more than other folks and the support payments are often staggering.

Combine this with many of them attempting to get into businesses that are really tough and/or simply spending more than they should and it's not a huge surprise. But there's also been the collapse of the housing bubble to add to this, and I have little doubt it has contributed (ie: player spreads himself thin in real estate when it's booming, or gets involved in the restaurant business when the economy was hot or car business).

[Edonidd]

When they do things like this, a lot of people fail to realize that the average length of an NFL career is 3.2 years. And the average length of a career for a player who makes the opening day roster of his rookie season is 6 years. For the average to almost double just by making the active roster during their rookie season, it must mean that almost half of all NFL players don't do that.

I have seen a lot of stories about these guys who don't make an active roster their rookie season. Almost always from the angle of guys who eventually make good. So a bit of confirmation bias here. But it seems like many of these guys don't give up just two years out. In fact many of them will take whatever pay they can get wherever they can get it, as long as it doesn't interfere with them working out and trying to make the team next year.

It includes guys who sign contracts with $50 million signing bonuses. But it also includes guys who go undrafted and sign as udfa's with teams for $5000 a week. Which sounds like a lot, but if you get cut before the season starts, you only made that $5000 for what, like 6 weeks of TC? And for many of these guys (who count in stuff like this which is just about overall numbers) that is the absolute extent of their NFL career. Plus they probably owe a chunk of that $30,000 which is all they'll ever see, to their agent. Maybe a chunk to a Chris Weinke or whoever too, for helping you train and try and make the roster. Plus most likely you graduated from college (or not) with a degree in football. Now you're on your own with nobody telling you what to do everyday for the first time, many times you still think you're good enough, so can only take a job that won't interfere with training for next year.

I would almost expect 95%+ of these guys to be bankrupt in 2 years. Which means that for all of the rest of the players in the league, that figure is closer to 55-60% ish. Still seems pretty rough, but more understandable IMO.

[MPilaf]

Since I love little quips: "A fool and his money are soon parted."

Basic fiscal and economic knowledge in this country are woefully lacking. It just becomes more high profile when it happens to football players. People see the money they make in a year and think "I can live on that amount for the rest of my life."

This is why I like things like the rookie symposium they used to do and may still do. There are basics that every new NFL player should know that most don't and this is a great avenue to do it. That being said, the onus is not on NFL teams. If anything, it is on the NFL union. If they are really interested in their constituency, they should protect every player, and learning how to manage money is day one stuff. That and teaching how not to be a complete f up in their personal lives. I like when NFL players start charities and stuff, but these guys need to make themselves their number one priority financially.

I could see a NFL team hiring a financial planner as a no frills invest in safe stuff guy who is available to the whole team. Seriously, having someone say put away half your pay check into a CoD is probably better financial advise than most players get.

I took classes in boot camp about financial management and the military offered a no frills investment option in TSP. If the Marines can do it, shouldn't the NFL be able too? I mean really.

[Red Chief]

http://www.kansascity.com/2012/04/28...ing-risks.html

It cites mostly KC-area examples but the numbers are staggering.


According to a piece published in Sports Illustrated in 2009, 78 percent of NFL players go bankrupt or suffer financial distress two years after retirement. That number was up from ’97, when Kennison’s card read that 75 percent of retired players were bankrupt, divorced and unemployed after two years.


Brings home that it doesn't matter how much money you make, it's how much you spend. Thoughts?

Well my first thought was how the Chiefs beat the Vikings in the superbowl.

My second thought was that the worst financial decision most players make is getting married!

[The Q]

Since I love little quips: "A fool and his money are soon parted."

Basic fiscal and economic knowledge in this country are woefully lacking. It just becomes more high profile when it happens to football players. People see the money they make in a year and think "I can live on that amount for the rest of my life."

This is why I like things like the rookie symposium they used to do and may still do. There are basics that every new NFL player should know that most don't and this is a great avenue to do it. That being said, the onus is not on NFL teams. If anything, it is on the NFL union. If they are really interested in their constituency, they should protect every player, and learning how to manage money is day one stuff. That and teaching how not to be a complete f up in their personal lives. I like when NFL players start charities and stuff, but these guys need to make themselves their number one priority financially.

I could see a NFL team hiring a financial planner as a no frills invest in safe stuff guy who is available to the whole team. Seriously, having someone say put away half your pay check into a CoD is probably better financial advise than most players get.

I took classes in boot camp about financial management and the military offered a no frills investment option in TSP. If the Marines can do it, shouldn't the NFL be able too? I mean really.

This is the problem with the middle class american family as well though. And one of the major reasons they can't retire. They know nothing about their 401Ks and I'd venture at least 50% (and that's being super conservative) are in completely the wrong fund for their 401k and honestly even 1 fund is completely incorrectly funded.

My sister was placed in a growth and income fund when she's 23 and that kind of mutual fund is designed for people in their 40s and 50s. You think she'd ever save enough to retire with that kind of portfolio? She's lucky I had the tools to optimize it based on American funds recommendations for a person in her current investing situation.