Director's statement. According to a Sports Illustrated article, 60 percent of former NBA players are broke within five years of retirement. Sucked into bad investments, stalked by freeloaders, saddled with medical problems, and naturally prone to showing off, many pro athletes get shocked by harsh economic realities after years of living the high life.
Drawing surprisingly vulnerable confessions from retired stars like Keith McCants, Bernie Kosar and Andre Rison, as well as Marvin Miller, the former executive director of the MLB Players Association, this fascinating documentary digs into the psychology of men whose competitive nature can carry them to victory on the field and ruin off it.
Director Billy Corben The U, Cocaine Cowboys, Limelight paints a complex picture of the many forces that drain athletes' bank accounts, placing some of the blame on the culture at large while still holding these giants accountable for their own hubris. A story of the dark side of success, "Broke," is an allegory for the financial woes haunting economies and individuals all over the world. Anyone who knows Bernie will tell you, he's as kind and generous a guy you could ever meet.
In fact, he was extremely generous with his time that morning; he talked with us for several hours and, afterwards, took pictures and signed autographs for the crew. A few weeks later, Dan LeBatard broke the news: Following a series of bad investments and a costly divorce, Kosar had filed for bankruptcy.
We can begin by looking at the nature of how athletes earn their money. Athletes typically hit their earnings peak within a few years of finishing school. Most never earn at the same level again.
In contrast, the typical American reaches their earnings peak usually decades after finishing school and has accumulated a lifetime of knowledge about how to handle finances by that point. Some athletes may never think about an alternative career path for after retirement.
Many athletes trust the wrong financial advisor. When you earn as much as athletes, you become a natural target for smooth talking con-men in a nice suit. First, an athlete is conditioned to listen to people with superior knowledge, like coaches and professionals who seem like savvy investors. Therefore, they may trust the wrong people and invest in seemingly glamorous, but unsound investments which, in the end, result in financial ruin.
Because of this and poor spending habits, Young was forced to file bankruptcy. Many athletes are attracted to the flashy investments.
Look at local Pittsburgh kid, Dan Marino. However, he lost millions by investing in over 1. Remember Curt Schilling. They also need to promise to be a fiduciary , which means they put your interests ahead of their own, and they should pass a background check. Ask anyone who was unprepared for a big windfall — a lottery win, a lawsuit settlement, an inheritance — and they'll likely tell you the money disappeared faster than expected.
Or just ask a typical U. Athletes can be so dazzled by the money coming that they don't consider the day when it will stop, Dickerson says. Also consider that what an NFL player is promised in a contract is often far more than he actually earns, Dickerson says, as careers may be shortened by injuries or getting cut from a team. If you're a great player, you may have a or year career, but that's very rare," Dickerson says.
Living below our means during good times is the best way to survive when times are bad. Putting aside money for retirement and emergencies should be top priorities. Twitter: lizweston. For you. World globe An icon of the world globe, indicating different international options. Times have changed. As the No. At last look, an estimated 60 percent of former NBA players go broke within five years of departing the league.
And by no means are these financial problems confined to the NBA. A reported 78 percent of former NFL players have gone bankrupt or under financial stress just two years after retirement. As the salaries of professional athletes across all sports grow larger, so, too, does the number of individuals seeking to prey on their successes and wealth.
The reality is, athletes are targets the day they sign those contracts. During my year NBA career, I saw newly retired teammates lose everything to financial schemes and scams, dishonest or unqualified advisors, and reckless spending only a few years after leaving the league. Since starting a second career as a financial advisor more than a decade ago, I've seen this storyline repeat itself again and again — with high-net worth individual investors, as well.
Not a month goes by without seeing a headline describing the latest riches-to-rags story in professional sport. For most athletes, there is no easy fix for a significant financial setback. Unlike virtually every other profession out there, an athlete's career earnings are compressed into just a handful of years. Time is not on the side of those who are undisciplined, unrealistic or too trusting.
Careers are short, and savings must last for the rest of your life. Beating the odds requires a lot of work and discipline. More from Investor Toolkit: Too smart to get scammed?
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