In the recent past I've read an article titled, "Worst Athletes from Whom to Ask Financial Advice" (YahooSports - April 2009). While sharing financial advice is something I avoid like the plague when speaking with former Professional & Olympic Athletes, I am very comfortable helping people learn from others' mistakes. The finite list in this article of whom not to take advice was limited, but unfortunately elaborate in the real world of former athletes who've found the negative balance of a bank account much sooner than planned.
Some of the circumstances revolving around these athletes' financial difficulties include everything from their own poor lack of judgment to being outright robbed by those closest to them.
Number 3 on this "Worst Athletes" list, Michael Vick, actually may fall into the full spectrum of reasons from his own poor judgment (and involvement with dog-fighting), to a major loss of income (estimated to be $25.4 million per year), to debtors being owed (estimated at $10 million), to the people he entrusted his financial kingdom (namely someone who was banned from working the NYSE because of alleged fraud). It's also reported Vick was spending approximately $300,000 per month on supporting his so-called entourage. I wonder what they're doing now? Since Michael Vick's release from prison he's reportedly doing construction work at $10 per hour. Going to take about 500 years to pay back his debt at this pace...
Amongst the loss of income and savings is the elimination of possessions, as indicated by Number 2 on the list, Latrell Sprewell. In the past two years, both his $1.5 million yacht and Wisconsin home have been reportedly taken back by the creditor. Just when you think things got bad for Sprewell, they actually got worse when the state of Wisconsin indicated they would take legal action against him for back taxes.
With an income estimated to be over $300 million during his professional career, the Number 1 spot on this list was given to someone who has personally experienced prison, divorce(twice), bankruptcy, and the death of his toddler child. Mike Tyson had the professional boxing world by the tail. He became an icon for his "pit-bull" style fighting and lavishness, but also felt the dismal cold of fame when his kingdom began to crumble.
We could all easily point the finger at Tyson and the laundry-list of other former athletes whose financial worlds have self-destructed. We could easily blame the athlete or the people surrounding the athlete for their ultimate financial demise. Bottomline is....ALL PROFESSIONAL ATHLETES EXPERIENCE A FINANCIAL READJUSTMENT UPON EXITING THEIR CRAFT! If I were to tell you, you're going to receive a 90-95% pay-cut, I don't care how much money you make....you're going to feel it!
So what can we learn from the fall of others?
When it comes to financial advice, my best (and only) advice to athletes is to plan ahead. Make sure you have a grip and understand your finances. You only possess a very limited number of peak earning years, and that's why its imperative to find a good financial planner who you can trust. I've found some (not all) former athletes, now financial planners, have the intuitive background to understand and hopefully help you plan for your transition. Find one! Twenty-five percent of professional athletes experience bankruptcy within the first year out.
Don't become one of these statistics or perhaps a member of the "Worst Athlete" list. Find a Financial Planner now!
You can find out more about me, my book, my TV Show, and my services at: www.fromglorydays.com
