Whenever we hear about token pro-athlete (who made more money than god) lamenting about how (insert outside person or thing) screwed him out of his money and now he’s broke, a huge discussion always seem to follow about financial education. In the mind of many people, the reason why the athlete has burnt millions is always due to ignorance. We think that if the guy had a Dave Ramsey type as his teacher in college he would have gone the way of the “smart pro-athlete” and invested his money well.
People envision the athlete as a young, impressionable college student being thrown into a fast life of partying, gold-diggers and shark accountants, then because he is ill-equipped to handle 7-figures, he ends up broke by the time the checks stop coming in. Are all pros this naïve, or is it an individual thing where most people are willingly ignorant whereas others take the time to do the smart thing? I am of the latter opinion versus the former – since people in general are not careful.
Here’s why the blanket assertion that Pros would do better if they took a financial education class is an oversimplified falsity:
I point to the legendary Kobe Bryant and Tiger Woods as examples – which saves me 200 words of explaining why. I don’t care to go into infidelity and how “these women deserve their money” as the Facebook soapbox heroes would proclaim but the fact of the matter is that divorce can cut an athlete’s legs off almost literally.
B. Trusting Loved Ones
Oh this right here folks, this right here is the cause for so much doom and gloom to new millionaires that you would not even believe it. Get millions and all of a sudden your Uncle Jaime (who your mom has always lauded as a “financial genius”) is pimping in your ear about how you should buy real estate in some area. You’re thinking about Basketball and being the next Jordan so you listen to Jaime and before long he has burnt $200k of your money into bad property and you don’t understand how and why.
I’ll be damned if most athletes don’t have an Uncle Jaime story and while it doesn’t warrant much sympathy; it is a reality that continues to plague athletes.
C. They Invest Their Millions With Sharks & Alligators
You think athletes don’t invest? They invest the hell out of their millions, trust me… but they do so blindly. A busy kid whose mind is on bettering his sport in order to make the million dollar checks will normally rely on a weasel to invest his money. Said weasel can go overly-aggressive on whatever he sees fit and the athlete, being ignorant to it all will believe anything that is told to him. It is almost criminal how often this happens, hell it even happens to movie stars and other “lucky” millionaires that didn’t grind the money trenches to get it.
Investors sniff these guys out like blood in a pool of sharks and they use fast-talking, “certified locks” and “fail-proof” promises in order to get the big men to invest hundreds of thousands of dollars into their coffers. Multiply these sharks by 10-20 and you have tired athletes (who heard from everyone else that investing is what smart millionaires do) jumping unto every “New Improved Facebook” and other promises just because it sounds good.
And here, you thought it was all partying and divorce lawyers that eat up their money.
Reserve Your Judgment
So while having a financial education will at least give an athlete a better grip on watching and maintaining an eye on the direction his money flows, chances are with all the sharks, users and abusers who are attracted to fast money – he can just as easily be broken at a moment’s glance.
Think of how many lottery winners actually do well to avoid “the curse” and compare them to a college kid who has been taken care of by a scholarship and doting coaches and professors all the way through school. Some of the most affluent athletes that are retired have their smart mom, dad or uncle to thank for investing their money for them. The sad fact is that outside forces and sadly inside (broke mom who sees her son’s NFL career as unlimited money) is what breaks our athletes. So think about this the next time you hear a Terrell Owens cry broke, I am not saying that you have to cry for them but you have to respect the fact that it is a very, very dirty game.See some words or phrases that you don't understand? Check out The Dragon's Lexicon.