Why Athletes Go Broke

The “Real Deal” is broke.

Former Heavyweight champion Evander Holyfield is playing the real life game of Deal Or No Deal. It has been reported that his $10 million estate in suburban Atlanta is under foreclosure, the mother of one of his children is suing for unpaid child support, and a Utah consulting company has gone to court claiming the boxer failed to pay back more than a half million dollars for landscaping. Just one more high profile athlete having to scale back his lifestyle to the level to which you have I have been accustomed. Why is it that athletes who seem to have everything are often completely unable to control anything related to finances?

We all played our violins to death when we heard of Latrell Sprewell’s financial troubles. On Halloween 2004, Sprewell, who was in the final season of a $62-million five-year contract with the New York Knicks, said he was insulted by the Minnesota Timberwolve’s offer of a contract extension that was reportedly worth between $27 million and $30 million for three seasons. Sprewell stated, “I’ve got my family to feed.” That quote become a national moniker for the public perception of athletes as greedy, out of touch individuals. Apparently, Sprewell still can’t feed his family. His yacht was recently repossessed and his multi-million dollar mansion is about to be foreclosed on.

While there is certainly the stereotype of the financially irresponsible NBA athlete, no professional sport is immune.

Let’s take a look at some high profile athlete financial sob stories over the years:

1. No one my age can forget Jack”The Ripper” Clark , star player for the Boston Red Sox who filed for bankruptcy in 1992 in the middle of his second year of a three-year, $8.7 million contract with Boston; he listed $6.7 million in debts. Jack was a master of financial planning and prudent asset acquisition. His bankruptcy petition listed assets such as 18 automobiles, including a 1990 Ferrari that cost $717,000 and three 1992 Mercedes Benz cars costing between $103,000 and $143,000. He owed money on 17 of the automobiles and was liable for about $400,000 in Federal and state taxes. He had also lost about $1 million in a drag-racing venture. Sounds like Jack would have been more at home in the NBA. You can read about it hereMike Tyson\'s Bentley

2. Johnny Unitas, Hall of Fame quarterback for the Baltimore Colts, filed for bankruptcy in 1991 citing numerous failed business ventures in his petition These failed bits included bowling alleys, land deals and restaurants. He filed forChapter 11 bankruptcy in 1991.

3. Mike Tyson The name speaks for itself. Mike’s bankruptcy was highly publicized. Despite earning hundreds of millions during his boxing career, Mike kept it simple. His bankruptcy petition simply stated: ” I am unable to pay my bills”.According to federal court records, his liabilities totaled about $27 million. You can read that story here.

4. Dorothy Hamill, the women’s figure-skating gold medalist in the 1976 Winter Games, filed for bankruptcy after a series of financial setbacks. Hamill said she has experienced financial setbacks as a result of poor financial investment advice and management.

These are just a few of many athletes’ tales of woe. It is not a phenomenon limited to professional sports — just ask M.C Hammer. Prior to his declaring bankruptcy, it was made public that his day to day living expenses far exceeded his income of $33 million. If I am going to veer off to celebrities, I certainly have to mention Kim Basinger and Michael Jackson.

When the Toronto Star ran an article alleging that a shocking 60 percent of NBA athletes “go broke” five years after retiring, did we not all pull out that very tiny violin we have reserved for such occasions? The NBA players union and the NBA have both disputed that assertion. The article goes on to talk about all the people taking advantage of and “scamming” these athletes. While I have no doubt there is truth to this, I can also understand how such a generalization would make the NBA uncomfortable. It leaves you with the impression that 60 percent of NBA players are not only financially inept but also idiots in general. This is simply not true. While good business sense is often lacking, I view many of their mistakes as being more mistakes of trust, credibility and lack of life experience than anything else. Smart, busy people who can afford it, hire people with targeted expertise to help them. This allows them to focus on their expertise. Sometime mistakes are made and bad judgment is used in who we hire and hang out with. That is not unique to the NBA or professional sports. This happens to everyone. That is life. It happens all the time. It just does not make front page when we screw up. If there is any question at all as to how badly we as the general public screw up, just look at the personal bankruptcy filing statistics.

In order to get a perspective from the inside, I contacted Jordan Woy, a highly respected sports agent and a principal in the sports marketing/management firm of Schlegel Sports. Jordan has represented numerous high profile athletes

Here is what Jordon had to say:

I think there are several reasons why so many athletes “go broke”. First, whether it is a lottery winner, an athlete or a star entertainer, if they are not equipped with the knowledge on how to make and save money they are in trouble. When they didn’t earn it through disciplined business practices and they don’t have those skills they usually go through it quickly. Most lottery winners or athletes make a great deal of money in a short period of time. They start spending it on things that only go down in value (cars, jewelry, partying, entourage, etc) and start to evaporate the money they do have. They can carry this off until they stop earning big money. This is when the trouble starts. It is hard to believe that MC Hammer, Mike Tyson, Evander Holyfield and now Ed McMahon are broke. These are people who earned hundreds of millions over time and it disappeared. Lavish spending and entourages were probably the downfall for the first three for sure.

Most athletes play for four to ten years if they are lucky. After they pay taxes (can be 40 to 50%) and agent fees and buy their first homes, cars, outfits, jewelry (plus, cars, clothes and jewelry for friends and family), they are left with very little. When they first “strike it rich” all of their longtime friends and family expect help. Most athletes feel obligated to help everyone out at first then they wise up. They also want to keep up with their teammates. If someone buys a Bentley, they have to buy one; if someone buys a $75,000 watch, they have to buy one to keep up the appearance. Then, of course, when the career ends and they are still living in a multi million dollar house, driving 3 expensive cars (and insurance), traveling in private planes and taking Limo’s when they go out on the town, reality sets in. The money dries up very quickly.

However, if athletes educate themselves, learn money management skills and make smart, safe investments along the way, they are usually in very good shape. After representing athletes for over 20 years, we call this our “life plan”. We take out clients on working vacations in the off season to places like Las Vegas, Cancun and on a cruise to the Bahamas to learn business networking. We have people from industries such as real estate, oil and gas, financial planning, credit repair, asset protection/estate planning, etc come to educate the players and their wives so they can learn about these business and also determine if they are interested in any of these industries for life after sports. One of the financial planners who comes always says most people die coming down from Mt. Everest not going up. The goal is for these athletes to get to their Mt. Everest AND to get down safely.

So, what do you think? Are the financial mistakes that athletes make any different than your mistakes or mine? They are certainly mistakes made with a higher downside. When we hear these stories are we just unable to comprehend that someone could have that much money and spend it all? Can we learn lessons on how to live our lives from their highly publicized financial gaffes? Do we even care at all?

With all due respect to Latrell Sprewell, we have our own families to feed….

©2008 Brian Cuban

About Brian Cuban

 

91 Comments For This Post

  1. LewP (30 comments.) Says:

    Great story Brian.
    I, like everyone else I imagine, often wonder how I would handle winning the lottery. I swear my life wouldn’t change that much. Maybe a new truck, just a few things of necessity. That’s why I think most “common” people have a hard time understanding the person that comes into wealth and loses it. How can Ed McMahon be in financial trouble? He’s made tons of money and didn’t he see he was going to be 85 some day? It just looks stupid. Did he by a 10 million dollar house at 83? What is it about people that can’t see potential horrors before they happen?

    I for one firmly believe if I won the lottery, I would still go to work and let my money work for me by having it draw interest or something like that. I say that now, but I wonder really and truly if I would really do that? I feel like I would. But then again, if it was powerball lottery with a 100 million dollar prize, I might be tempted to just retire.

    Maybe having wealth is all relative. And maybe the pain of losing it is relative as well.

  2. Adam S Says:

    This article raises a few very good points. The most important is the use of the word “scale”. Having had my share of financial mistakes (and how many people haven’t EVER lived paycheck to paycheck?) I can understand how having more money does not mean having more money forever.

    It is a rare thing to find someone who doesn’t spend the money they have. And especially now it is rarer to find someone who saves as much as possible. “Scale” comes into effect here. Lets say your paycheck is 1000 dollars per week. That’s a decent income. Lets also assume you have a budget and that after weekly bills are paid you have about 500 dollars left. You sock some away. Maybe buy some extra-special food or wine. Now you are down to 300 and you want a new Ipod. Sure, plunk it down, you are getting paid next week.

    What if you were making 10,000 per week? After all your weekly bills are paid you have 5,000 left. What would you spend THAT kind of cash on? An Ipod? Or something more spectacular? What if you had 50,000 left? You would spend it. Most of it, at least. Almost everyone would. And when you start hemorraging 50,000 a week its easy to see why you get into trouble when your income drops to nil.

    The habits scale up, the costs scale up, the trouble stays the same.

    Really I think the basis of the problem is poor financial skills as an epidemic of the country. How much money do YOU have saved?

  3. Todd Fjellman Says:

    I know that the professional leagues talk to the athletes about who they hang out with. Why don't they have them ALL talk to financial planners?

    I also believe that personal finances is more important to be taught in school than other things. Why do I need to take calculus (NEVER USED SINCE, AND I AM IN I.T.), but never taught about how I manage my money right after school may affect my purchasing a house?

  4. Paul Kindzia (1 comments.) Says:

    This was an excellent article and perfect timing. I was doing some research to find examples of former “high earners” who subsequently ended up with nothing. It’s not what you make, it’s what you save and invest wisely. As a finance guy by trade who works with individuals, there’s a lot to learn from the mistakes of others. Thanks for sharing.

    Paul Kindzias last blog post..A Train Wreck, Yet I Can’t Look Away – June 4, 2008

  5. Work Post (1 comments.) Says:

    Truly frightening. Easy come, easy go.

  6. Rene Says:

    Speaking as someone that blew his first windfall, I can vouch for the ‘lack of skills with money’ theory. However, I was blessed with making some decent coin a second time and there is no way in heaven or hell that I would make the same foolish mistakes as I did the first time around. I believe that just about everyone blows their first windfall.

    The secret to not blowing your fortune: never touch your principle! Live on dividends, interest and stock gains and budget accordingly. If your spouse, family or friends cannot abide by this rule then lay down the law and force them to. They’ll thank you for it later.

  7. Bob Says:

    Just one question, What is “do do?”

  8. Brian Cuban (138 comments.) Says:

    @Bob: shit

  9. John Smith Says:

    I know multi-millionaires who drive simple cars, don’t wear expensive jewelry and live in nice average homes. They don’t appear to be rich, but then again they get to live worry free and can enjoy their freedom. Sometimes the material things you own end up owning you. Live simple and be happy. Stop trying to impress materialistic women and find a beautiful yet humble and down-to-earth woman who is more impressed by you than by your wallet. We live in an age of consumerism where most people work to buy useless crap instead of travelling, spending time with family and enjoying the simple things in life. That’s what these athletes need to learn. They need to choose their friends wisely and learn to stop wasting their earnings on frivolous things.

  10. Coming Back Says:

    As a partner/executive at a rapidly growing, and very profitable small company, I quickly went out and made an utter mess of my finances. Everything from flying private planes to doubling the size of my home.

    Last summer, I found myself in debt up to my eyeballs, with loan and interest payments sucking basically ALL of my spare income. Despite making serious bucketloads of money, I couldn’t even afford to go out to dinner, and I was driving an old car with no hope of getting another one!

    I freaked. My wife and I argued a LOT for about 6 months while we got a plan put together that would both work today and give us a stable future.

    The compromise that we worked out is to establish a baseline household “salary” that just barely covers our day-to-day expenses now, along with the interest payments and bills. Then, as the company continues to grow, the additional profits beyond the baseline are used to pay off the debt. As the debt gets paid off, the household “salary” effectively increases with the reduced payments.

    That way, we’ve contained our spending while also providing personal incentive to pay bills and save rather than spend. It’s my goal to be completely debt free in 3 more years, which is a stiff target but is probably doable. Once I’m debt free, I want to save half of everything I make beyond the household salary. (which, by then, will probably exceed my household salary)

    Being broke is not about what you make, it’s about what you spend vs what you save of what you make!

  11. Thomas Says:

    Sounds like Mr. Woy does his best to set the players up for many of the investment schemes that bedevil his players.
    “We take out clients on working vacations in the off season to places like Las Vegas, Cancun and on a cruise to the Bahamas to learn business networking. We have people from industries such as real estate, oil and gas, financial planning, credit repair, asset protection/estate planning, etc come to educate the players and their wives so they can learn about these business and also determine if they are interested in any of these industries for life after sports.”
    Representatives of the industry educating the players!?! That’s a sure recipe for disaster and explains a lot. Real estate, oil & gas?! These investment industries are notoriously “difficult” even for experienced investors.
    If Mr. Woy truly cared about his players he would take them to Omaha and have them listen to Warren Buffett who would likely counsel them on the merits of government bonds.

  12. Skip Johnson Says:

    I think the bigger question is who really cares what happens to these people. It’s laughable and entertainment for us once they stop being entertainment on the field. Don’t these people realize they are modern day jesters and clowns with no tangible value to society. These people can bounce a rubber ball well yet for some reason alot of people (kids and immature adults) worship these guys. It is to be expected that they end up in a bad situation if they don’t learn. Hell, they can barely speak legible english let alone fill out a tax form (or read for that matter). I would suggest these guys send me $100k and I will handle all of the money management for them. I also have some good deals on real estate I will let them in on but only if you hurry.

  13. Brian Taylor Says:

    I like how I post a semi-critical comment and it gets deleted…

  14. JD Says:

    It is clearly an education thing. I think the point about requiring player education from the league level is right on. They require drug tests to maintain the marketing value of these massive enterprises, why wouldn’t they spend a few $ to educate and better their assets?

    And a quick note to Todd Fjellman: Not to be offensive, but I think Calculus is taught so that you can use it in life, not for equations, but so that you learn how to solve the same problem from multiple angles. While you are young this helps form the patterns and logic you will use to solve problems your whole life. I would imagine that it has helped you more than you consciously think of in your IT career.

    I do agree that finance classes would be helpful in addition to the Calc, but not necessarily instead of.

  15. Brian Cuban (138 comments.) Says:

    @Brian Taylor: Please read the comment guidelines. Comments must be on topic. If I decide to write a blog about my shitty grammar, criticize away. Even better, write your own blog about it.

  16. Ben Says:

    Hay guys, I'll teach you how to make friends at a resort in Hawaii, and give you a list of my friends, all for the low, but extravagant and sophisticated, price of $100k. I'll teach you how to lose your money to me and my friends with grace. I'll get you down off that Mt. Everest.

  17. Edwin Says:

    I think the best way to deal with the windfall you are going to get is to stay put, and remember the shit and crap you have to put up before you got it. If I strike it rich, Im gonna start diversifying to avoid any pitfalls that may lead me back to where I was before I was rich.

  18. gus Says:

    God, Please smite me with this problem.

  19. robis Says:

    they should’ve listened to Notorious B.I.G., i.e., biggie smalls and Puff Daddy – Mo’ Money, Mo’ Problems!

  20. GoldMember Says:

    @LewP:
    There’s a difference between “wealth” and being “rich”. These guys get rich, not wealthy.

    @John Smith
    Usually these guys you see driving nice and simple cars, or luxury but not “flashy” cars earned their monies ;) They worked hard, and must still be working hard I’d imagine. These athletes cited here have no idea how to manage they money, it falls on their laps, even if they sweat-ed their way up.

  21. Linc Says:

    At least the boxers can put on a comeback fight… Sure they may get pummeled, but they can pay some bills at least!

  22. Brian Cuban (138 comments.) Says:

    @Brian Taylor: I actually am crying uncle to my shortcomings and hiring a proofer

  23. Sweetz Bitz (3 comments.) Says:

    Clearly these people didn’t come into the millionaire club with financial knowledge of nothing more than house rent and basic utility bills before they hit it big.For low income bracket, you don’t have to go through the complicated and tedious process of filing taxes. These people came in with an army of people around them doing their account and getting a piece of that fortune too in the process.
    Interesting how the article mentioned the pressure of keeping up with their teammates and just about every other celebrity. Just watch shows like MTV Cribs. As nice as their abodes are, it must have cost them fortune just to keep the place as it is. Sadly, just like the rest of us mere mortals, a lot of people are incompetent or misinformed about good financial planning.
    There is a big difference between those who build their fortune from the bottom little by little to the top and those who suddenly being thrown into it. It’s just like someone who has credit card for the first time and not realizing that you shall need to pay it off later.

    Sweetz Bitzs last blog post..Petrol and Diesel Price Hike Frenzy in Malaysia again!

  24. John Thomas Says:

    Because they piss it all away thinking it will last forever.

    JT
    http://www.Ultimate-Anonymity.com

  25. SK Says:

    Great article Brian, I see how this can happen but I still have ZERO sympathy for athletes, movie stars, or who ever that publicly complains about needing more money after they blew millions away on cars or whatever.

  26. Brian Norton Says:

    Perhaps “Zero sympathy” is a touch harsh. When you’re a person of high profile, you have considerable UNAVOIDABLE expenses. Does Shaq need a 90,000 square foot mansion? Probably not, but he really can’t just move into a nice suburban rambler either. There are significant security concerns when you’re in the public eye, land to be able to properly secure, a security company that can keep you and your family safe, cameras, special presents for law-enforcement, etc. Just Look at Sean Taylor.

    Then you’ve got transportation. When you’re worth $100 million, do you entrust your kids’ safety to a 1983 honda Civic or a 2008 Maybach 62? Then you need a driver/bodyguard.

    Then there’s endorsements. If you want people to give you money to endorse their products/services, you have to have a personality that they want to associate with their brand. That often means luxury, class, and wealth. You don’t HAVE to have a $90k watch, but it builds your image as a playboy, and thus your market value.

    Then there’s the entourage. Bloodthirsty vampires no doubt, but when you’re super-rich, EVERYBODY you meet is a bloodsucker. At least with your old friends/family you know what to expect, and you can trust them. THen there’s the guilt that you get when you’re rolling fat and they look like a slob. We all want to hang out with people like us, and you feel bad for your pals.

    I’m not advocating living beyond your means, but let’s not crucify these guys either.

  27. Brian Norton Says:

    And I forgot staff. You’re a pro athlete, and as such are contractually restricted from certain risky behaviors, possibly including yard work, car maintainance, etc. THen you need special nutrition so you hire a chef, bodyguards, a secretary to manage travel, etc.

    only SOME of these expenses go away in retirement.

  28. Sebastian Flyte (2 comments.) Says:

    It’s a simple matter of IQ and its role in wealth creation. The Bell Curve proved that socioeconomic status is almost perfectly correlated with general intelligence (the g-factor, based on the g loaded raven’s matrices IQ test). Therefore the elite in meritocratic America are more intelligent than the rest, because they are better able to negotiate the myriad tax laws, business laws, investment laws etc, added to the fact that their high IQ’s have set them on a good career path. What college you get into largely determines your career path. You get into college by passing the SAT, which studies have shown is 85% correlated to IQ. Ergo, your career path and future wealth is determined, on average, by your IQ.

    Professional athletes circumvent the Bell Curve laws by earning vast amounts of money with usually average or below average IQ. They are outliers on the bell curve. What you are witnessing with professional athletes blowing it all is simply the statistical phenomenon of REGRESSION TO THE MEAN. Outliers in IQ-wealth invariably regress to the wealth level determined by their IQ when the unique exogenous source of income disappears. As another proof of this – look at the career trajectories of the offspring of professional sportspeople. If your path in life was determined by your family wealth then they should have super-careers, but they rarely do. This is because they have inherited wealth from their parents, yes, but they haven’t inherited the thing that MOST guarantees success in modern America – a high IQ, and so they stumble and fall.

    Sebastian Flytes last blog post..Call Strangers On The Phone (Day 3)

  29. Brian Cuban (138 comments.) Says:

    I have read a few comments critical of Jordon Woy. I will preface this by stating that I have no business relationship with him. We know each other through some mutual friends and thats all. I wanted a fresh opinion and he was nice enough to oblige for this post.

    To all those who are critical, what is your credibility to make such statements? I look at Jordon’s resume and I see years in service as an agent and financial planner. I see numerous high profile athletes in his corner. That is credibility in my book.

    What is your credibility? Tell me how long you have been a sports agent or even a financial planner. Tell me who some of your high level clients are so I can verify your credibility. If you do that I am all ears to what you have to say as to Jordon’s qualifications. Otherwise it rings shallow….

  30. TOOL GUY (1 comments.) Says:

    To:
    Sebastian Flyte,
    Your comments are the most deatiled and intelligently composed of all here.
    I will investigate the Bell Curve, et al.

    While there are those who will undoubtedly claim your comments as racist, it is those same people who will either not be able to or choose to see them in that light.
    This is a directly negative way in which the misnamed political correctness has impacted societal conversation.
    To evade the truth is to fail reality.

  31. Rick Cain Says:

    Cry me a river. Perhaps we should create a “stupid athletes” welfare fund so they can continue their life of crack cocaine, whores, and european sportscars after they go bankrupt.

    There’s always sports in North Korea if their finances get real bad.

  32. Tom Says:

    Tool Guy,

    Apposite name. Sebastian dredges up one of the most ill conceived books in social research, adds a dash of pop-statistics and hey-presto we’ve got an explanation. You swallow it hook line and sinker, adding the “it’s not racism” tag for good measure. The Bell Curve is deterministic BS that any sane and intelligent person would disregard in a trice. But I guess it tells you what you want to believe i.e. stupid black sportsmen, so it must be true. Never mind evading the truth blah, blah, in your case reading a book before commenting would be a major start.

    I won’t even start on Sebastian, except to note he’s still in thrawl to a book that has been comprehensively debunked by Nobel prize winners, among others. A sad man.

    Tom

  33. westernworld Says:

    it is pretty simple actually, consider the interest your income. as soon as you cut into your principle that better be large enough to sustain your burn-rate for your foreseeable lifetime.

  34. westernworld Says:

    i foresee great poverty in your life mr.flyte.

  35. Ace Says:

    re: The NBA statistic
    I wonder if it correlates with education level.

  36. Matt Says:

    To Tom:

    Sebastien didn’t say anything about stupid black sportsmen, or even black sportsmen. He said sportsmen, to which you assumed he meant of men of African origin. I would suggest that assumption doesn’t position you in the best of places from which to call someone else racist.

    With regards the bell curve, it is a rather harsh way of saying exactly what has gone before in this post. Remove the term IQ and replace it with the word knowledge, and you have the perfect explanation. These sportsmen don’t have sufficient knowledge with regards managing money, and so they are soon parted from it. Equally, they have no knowledge of the what value money has. The dollars have arrived in such bountiful amounts with such comparative ease that they don’t realise how easily spent it is and with what difficulty it is earned.

  37. James Says:

    Being rich is expensive. You have lawyers, accountants, agents, assistants, publicists, stylists, gardeners, drivers, cooks, trainers, nutritionists, etc. that all need to get paid (and many of them have their own assistants and subordinates to pay). Giant mansions don’t clean themselves and groom their own lawns. Now all these people might seem extravagant, but you can’t expect a pro athlete to manage his mansion, contracts, endorsements, publicity appearances, and day to day things like laundry and grocery shopping AND travel the country playing sports. They’ve got games to play, talk shows, interviews, commercials to shoot, etc. etc. They become a brand and a brand needs a company to run it and those people need to get paid.

    Plenty of corporations with revenues in the millions, if not billions, go bankrupt all the time, and the many that don’t have access to cash like stocks, bonds, etc. that, for the most part, aren’t available to the celebrity-as-a-company.

    This is not an excuse. Wasteful and unprofitable spending will bankrupt any company, but people forget that a player making 10 million a year pays half that in taxes and then has a list of about 30 people/employees who need their salary too.

    I think it would be much easier winning the lottery. You’re not expected to become a celebrity and being a celebrity can cost a pretty penny and it takes a good business sense to run ANY company, and yes, many of these people lack that training and background.

  38. Da Truth Says:

    A Fool and his money will soon part! I would like to see someone go back to these idiots we see on MTV Cribs 5 or 10 years later and see how their living now. Who really needs 15 luxury cars?

    I have a problem comparing athletes and celebrities who make millions to the average person on the street declaring bankruptcy. For the average person one trip to the ER can be enough to wipe out someone who lacks health insurance and in some cases even someone with insurance when the insurance companies find a way to weasel out of not paying the claim. For someone with millions they should have enough stowed away for that “rainy day”.

  39. Guy Says:

    @Brian – Everyone has every right to criticize Mr. Woy’s practice if they find something they think is incorrect. I didn’t realize only people from the field in question are allowed to voice an opinion. We don’t need to be financial planners or anything similar. If we followed your line of thought I would pose the following questions;

    What business did your brother have buying a basketball team? Had he ever played professionally? Had he ever managed a professional sports franchise? Where were his credentials?

    Where do you get off blogging? How many books have you written? How many journals have you been published in? What did you do to deserve anyone reading your blog other than having a famous billionaire relative?

    Sorry if you don’t appreciate people taking shots at a friend’s business practices, but take it like a man and quit whining. Taking a young millionaire to Vegas to teach financial prudence is like taking a casual drug user to Colombia to teach them about ‘Just Say No’. It’s not like agents taking advantage of players is anything new.

  40. Brian Cuban (138 comments.) Says:

    @Guy: You are absolutely right about that. In the same vein, I have the right to criticize the criticism. :o)

  41. Richard Hinzie (1 comments.) Says:

    Brian
    You really are being a tough moderator please tell us why?

  42. Debbie Ritter Says:

    I can identify with this situation, having had family members who have gone from “Rags to Riches” and back to “Rags”. When their business was at it’s peak, they were generous to a fault sharing money with family & friends in need. Probably without regard for what might happen to their own needs when the market changes and with it their financial position. Sadly, those they’ve helped over the years cannot help them. Sometimes I think people live for today without thinking of the future. I’ve lived through the oil boom in the 1970′s in Okla., then the oil bust, and now boom again. You never know when you’ll need to save for that “rainy” day. Great insight, Brian, to those who have made mistakes in managing their funds. A lesson no matter what your income is. Thanks!

  43. Nate Jones (1 comments.) Says:

    Education is the key. And it starts from the grass roots level. Nike/Adidas, sports agents, runners, and college and NBA scouts can identify sure fire NBA prospects in their early teens. There should be an effort out there to educate these sure fire players about the business, rather than just try to take, take, take from them. Which is what most people (even some of the players family members…can you believe some players fathers ask agents to pay them for allowing them to talk to their sons!). Marc Isenberg has a great book called Money Players that should be the blueprint for every professional athlete out there. I think athletes not only need to be educated about the pitfalls of spending beyond their means, but also about investing in businesses that are created directly and indirectly through the work of professional athletes. I wrote about it here:

    http://jonesonthenba.blogspot.com/2008/06/financial-wake-up-call-for-professional.html

    Nate Joness last blog post..What Happened the Last Time the Lakers and Celtics Played in the Finals, Part II

  44. Business Mentor (1 comments.) Says:

    As for financial education . . . it’s more important than s*ex ed. I’m pretty sure we can figure out how to procreate without “the video.” Sure s*ex ed has its place, but when will you learn how to write a balanced household budget? With parents struggling to make ends meet and many living beyond their means, how are kids going to figure out how to take care of themselves financially? It takes repeated exposure to good fiscal behavior for it to catch on….

    Now take financially responsible parents out of the picture. Tough situation.

    Add in entourage. Misinformation and under-information have just been amplified by 1000x. Ouch.

    It’s a wonder more aren’t broke. I would like to see stats that compare the NBA, NHL, NFL, MLB % bankruptcies/# in League versus % bankruptcies/# working population. I bet the ratios are very similar. Now, compare these stats against self-proclaimed Entrepreneurs – I bet the entrepreneurs have >2x the bankruptcies.

    Second Point:
    As for regression to the mean, see this report from the US Treasury. This should also answer your questions about the rich getting richer, the poor getting poorer.

    Report: http://katemckeon.com/2008/02/13/income-mobility-study/

    Or just get it by searching the treasury website for Income Mobility Study http://ustreas.gov

    -Kate

    Business Mentors last blog post..Evaluating Online Assets – The Overview

  45. jim Says:

    Reminds me of an old high school baseball teammate who actually made the pros. Guy was just dumb as a rock. Great curve ball. Nice guy, but painfully stupid. I ran into him after his first season. He was happy and proud to tell me that the most amazing thing about being a pro was how many new financial opportunities opened up for him. For example, he said, shortly after turning pro he was approached by some financial wiz (during warm-ups on the field!) who offered him an investment opportunity that would double his money in 6 weeks. My dumb friend gave the guy $10k, and got back $20k 6 weeks later.

    I tried to explain to him that this was all a scam. But my old-teammate was convinced I just didn’t understand how the world of high finance and pro sports worked.

    He lasted a few years before ruining his arm. He’s broke now and a cop I think. Oh and his insanely hot wife left him. Really was a nice guy though. And he did get that brass ring for a bit, not to mention the insanely hot (ex)wife.

  46. Kimball Ramey, CPA (1 comments.) Says:

    Brian,

    Good imformative job on this topic where the surface is often barely touched. I see this in my practice often when a client inherits assets from an estate of some sort. The larger the upside from where the client comes from it seems the harder some of them fall. The ones who are successful usually have some common traits. They educate themselves and/or hire well reputed professionals to help them. They follow the advise they pay to receive. They most successful live a lifestyle that gives back to the world what they have been so fortunate to receive, not just assets but they use their god given talents to make the world a better place. Maybe I am naive but I believe there is something to be said for a kind of “Good Karma” thing in this regard. There you have it. My two cents worth. We have managed assets for many clients over the years and that is my experience. Good luck to you my friend and keep on writing!

  47. Tremain Says:

    Very interesting reading … I remember reading Spreewell’s comments a few years back and wondering what planet he lived on where $30MM isn’t enough ‘to feed his family’, yet $0MM was an acceptable alternative! Rudimentary math skills aren’t required to see how foolish this was.

    One thing I would add to the conversation, though, is to question what the average bankruptcy rate is for the average person? I would assume athletes and entertainers are above the norm as they usually live beyond their means. Working for an investment bank, we regularly finance clients based on projections for future earnings, potential future profit, etc. and sometimes it’s a disaster as a team of forecasters will even miss warning signs. My guess this happens routinely for athletes, taking on multiple mortgages, etc. whil pissing away money on cars, vacations, gifts and whatnot.

    On another note, I regularly read Mark’s blogs, but this was the first for yours, Brian. Very intersting piece.

  48. wifey Says:

    Brian,

    my husband plays professional football and he is probably one of the lower paid players in the league–for me, even more reason to spend his money wisely. However, the problem we’re running into is definitely family and friends. They were there for him before he went into the NFL so he feels obligated to help them out. Thanks for writing this article…I am definitely going to show it to him

  49. Brian Cuban (138 comments.) Says:

    @Richard Hinzie: Richard, the only comments I am aware that have not gone up are one guy who was simply taking personal shots at me and asking personal questions off topic to the post. Everything else appears to have been posted

  50. Michael Webster (1 comments.) Says:

    Brian writes: “To all those who are critical, what is your credibility to make such statements? I look at Jordon’s resume and I see years in service as an agent and financial planner. I see numerous high profile athletes in his corner. That is credibility in my book.”

    Without criticizing Jordon, this particular decision rule is precisely the one that allowed Kirk Wright to gain so many NFL athletes as clients – and Mr. Wright then bankrupted them and killed himself when his scam was uncovered.

    You could look it up: http://bizop.ca/blog2/recovery_of_losses/kirk_wright/
    http://bizop.ca/blog2/lawsuits/kirk-wright-commits-suicide-in.html

    On a more positive note, Seth Goodin has a relevant post today in which he advises:

    If I could only share one piece of personal finance advice to grads or to just about anyone, it would be this:

    Only borrow money to pay for things that increase in value.

    It’s a short list: your business, your house and your education, mostly. Stocks if you’re smarter than me. That’s pretty much it.

    If you have credit card debt, you’re in big trouble. Your bank account has a huge leak in it, and it’s getting worse. Hence the urgency.

    Michael Websters last blog post..What Happens When the Franchisor is Bankrupt?

  51. Tom Says:

    Matt

    “Sebastien didn’t say anything about stupid black sportsmen, or even black sportsmen”

    You’re right Sebastian didn’t mention race, but if you use the Bell Curve as your source material, as he did, people will draw their own unsavoury and not unreasonable conclusions. Have you read the book?

  52. Eric Says:

    I’ve always thought that the issue is the uncertainty of future earnings, or more specifically, the exagerated confidence of athletes and performers that they will maintain their high level of income. It is a lot easier to justify buying some of the things we consider outlandish if you think you will be receiving another payday in the future. Too often, skills erode, injury occurs, or circumstances change and that imagined payday no longer exists.

  53. Melissa Z. Says:

    Hello Brian,
    Congratulations on getting your wonderful article in the greatest paper of all, The New York Times. :) It is so sad that this happens to many people. What is sadder is that some of these people became so enthralled with their huge bank accounts while lavishly and selfishly spending it on themselves while barely contributing to charitable causes on their on will if any contributions at all. Is it karma, bad decisions or just bad luck? We will never really know but it is something to think about for them.

  54. Ramon Says:

    I think one of the problems is he “bling factor” which comes with the hip-hop culture. These people want to show off and they buy stuff to show off. They buy Bentleys, Ferraris etc., but the moment you register your Ferrari, the value goes down like 30% unless it is a classic. Those diamonds and other jewellery, they are expensive when you buy but when you try to sell them I don’t think you can make the same amount you paid for.

  55. yaddayadda Says:

    Work post: Why do you think it was “easy come?” Are you under the impression that it is easy to earn millions of dollars in pro sports?

  56. Glenn Says:

    If you have a £1 million (the minimum benchmark of richness in the UK, about 2 million dollars) Just put it in any given bank account and you will make about £70,000k a year in interest. That is enough to fund a lavish lifestyle and have change left over. If an athlete earns $100m and ends up broke they must be stupid beyond belief.

  57. jack M. Says:

    The sports agent is correct, but is too kind. He forgets the “idol” factor:

    Most sports stars have been celebrated from a very young age–beginning in their young teenage years. Most played on high school and travel teams where actions that would normally get a kid suspended were allowed to pass–they were the superstar, they got superstar rules. And because they’re kids, not adults, this was all they knew–that they could do more than most people and the rules didn’t apply.

    So free meals were given at local restaurants. Speeding tickets forgotten. Fights/bullying were allowed to go unpunished. Grades that should have kept them back were allowed to pass them on to the next grade. SAT scores that were poor somehow got them into schools they were unequipped for–but those classes they took their were easy passes, too.

    The comps only grew as they matured. People gave them free cars as adults, allowed them to be spokespeople, and celebrities crowded around them. Money management? Well, they assumed, as it always was, that these things would be forgiven or taken care of by someone else. After all, it always had been in the past, right?

    These kids, by virtue only of athletic ability, were allowed to skate by financially and socially. except when retirement hits, it disappears forever. now you have a bunch of spoiled 12 year olds who were never told no, never taught to pay people, never taught consequences. The celebrities and endorsements quickly disappear (nothing is more pathetic than an athlete 3 years after retirement trying to stay relevant). And, most importantly, that jock salary is gone. And, suddenly, unless they were a hall of famer, the previous forgiveness they got for social transgressions (e.g. speeding, drunk driving, paying on time) is gone, too.

    Handling money isn’t that hard so long as someone is taught the ability to say no to their desires and lives within their means. The math isn’t that hard. unfortunately, that is something adults do, because that is a sign of maturity. And retired athletes are not mature, on the whole–because they’ve never been forced to mature from the 12 year olds they have always been allowed to be.

  58. Lisa Says:

    “Perhaps “Zero sympathy” is a touch harsh. When you’re a person of high profile, you have considerable UNAVOIDABLE expenses.”

    OMG are you KIDDING me? They are completely avoidable! Warren Buffet is one of the richest men alive and he lives in a house he paid just over $30,000 for. That’s 30, not 300. If celebrities and athletes burn through their finances and go broke trying to support their ridiculous lifestyles, it’s their own fault, and I will laugh heartily when they lose everything. There is no reason why they can’t drive normal cars and live in normal houses and wear normal clothes et cetera. No reason whatsoever.

  59. BLAZER PROPHET Says:

    I know several pro athletes who don’t live the “bling bling” life. They invest their money into mutual funds, CD’s, bond funds… and do very well. They have nice houses with good security, but not mega monster compounds. They also drive a very nice car, but not a $300,000 import. All pro leagues have manatory counseling on money and it’s apparent most athletes simply do not listen- and they pay for it. There are “reasons” for their financial demise, but no “excuses”. It’s a shame, but I have no real sympathy. There are tens of millions of people (like me) who have a nice car, buying a house, feed my family, take nice vacations… all on less that $60,000 per year. Besides, pro athletes have one short career, and they if they have to continue working for a living, so what? There’s no shame in having to work for a living. As for friends & family milking people for money- I guess that’s to be expected, but one can only do so much for them. The sooner they realize that, the better.

  60. Sam Says:

    One of the personality traits inherit to many great athletes is the need to impress others. It is easy to attribute their success to having good genes, but in almost every case they are also incredibly driven individuals, and at the core of that drive is frequently the need to impress either one particular person or many people in general.

    One of the characteristics of individuals who successfully save money (The so called “millionaire next door”) is that they have a smaller than average desire to impress others. They drive a sensible car, they wear average clothes, they live in average houses, etc. They can save money because they choose not to spend it trying to impress others.

    This holds true regardless of income level.

    So in one way, professional athletes would be expected to be poor at saving money/living within their means.

    Mr Jordan’s comments are also revealing, not because I think he is scamming them, but because he is obviously successful at telling the athlete what they would like to hear – “Business networking” “real estate” “oil, and financial services”

    What if the athlete was simply told? “Put your money in Treasury bills and ETFs. You will get an average return”

    Could they live with “average”? My guess is that they ‘could’ live with it, but they will make the choice to try and get more than that. Average is not very impressive. It would certainly allow them to live their lives free from financial worries, but that is not their primary concern.

  61. Claude (1 comments.) Says:

    “However, if athletes educate themselves, learn money management skills and make smart, safe investments along the way, they are usually in very good shape.”

    I think money management is over-rated and sounds like “rationing” which is just extending the inevitable. To stay wealthy, you and I have to focus on money-creation. So I like what Jordan does with clients, teaching them networking, and industries, and trying to find out what they like. But what’s missing is “how do I get what I want?” combined with “what should I want?”

    What does an NBA player want to do “through” basketball? There’s a psychology involved. That’s the only way to find true purpose.

    I wrote a piece about this called “60% Of NBA Players Go Broke?” and another one called “Why So Many Black Athletes Self-Destruct (And How To Avoid It)” on my blog, linked above, that brings up issues rarely discussed or mentioned but which are essential to understanding this topic.

    And, yes, I think this applies to all of us, not just pro athletes and celebs.

    Claudes last blog post..Kobe, What You Focus On (Good Or Bad) Expands

  62. Arlen (1 comments.) Says:

    Players are in the same boat as most people. They don’t have any idea that tomorrow is coming, and they don’t really know how wealth is made.

    Most people think athletes are ‘successful’ because they make big paychecks. In reality, the only athletes that are truly successful are those that invest their money safely and wisely for the long haul. The secret to making big money is being able to generate money. Nike pays Tiger Woods millions because Woods sells so much product that the amount Nike pays Woods is nothing in comparison.

    That’s why Danica Patrick gets paid more than any Indy racer, and why Lebron James is getting paid hundreds of millions even though he hasn’t really won anything. Even though Tim Duncan has titles, rings, fundamentals, is well spoken and an all around role-model for being great at basketball, kids buy stsuff from Lebron James, so Lebron makes more. Athletes grow up thinking that getting paid by just making an NBA team is ‘making it’. You have to understand that making money is more than getting a paycheck.

    Arlens last blog post..Five ACC Targets You Don’t Know

  63. Fiddy (1 comments.) Says:

    I am not quite suprised by the fact in the articles. Some people really dont know what to do with their money.

    Fiddys last blog post..Triple Slice Tofu

  64. KD Says:

    Great article Brian! First off, I think athletes get paid way too much to begin with. I don’t even like going to pro games anymore since the majority of players don’t even give a rats patoot about the actual game anymore…only the money. Not for nothing but I can catch a better basketball game down at “The Cage” aka Greenwich Village’s 4th Street Courts.

    I’m sick and tired of all the boo-hoo, feel sorry for me because now I can’t feed my family on a $23 million dollar salary instead of a $40 million dollar one. I don’t feel sorry for any of the athletes and/or celebs that cry time out or foul when they get finacial woes. If they were smart, they should have done their research on how to make their money work for them instead of busting it on bling, fast cars, mansions and all else.

    I’m amazed at how stupid people really are.

  65. Sebastian Flyte (2 comments.) Says:

    Steve Sailer on this issue:

    http://isteve.blogspot.com/2008/06/60-of-nba-players-are-broke-within-5.html

    He notes: “A major problem is that many NBA players don’t have anybody they can trust in their immediate family with a three digit IQ to manage their money for them. This attracts some gaudy parasites.”

    Sebastian Flytes last blog post..Call Strangers On The Phone (Day 3)

  66. Mikael@xenbet.com (1 comments.) Says:

    So much money yet so dumb. Thats what happens when you don’t go to school and learn financial management. Thats what happens when money comes to you too easily.

    ——-
    xenbet.com

  67. Roger Hamilton Says:

    Hey BRIAN!

    Very intriguing article and one that I am sure most of us have pondered….
    My Violin is playing as well, but to some degree I would assume somewhere there actually might be some prudence and the individual just didn’t see the avalanche coming…still it’s so hard to feel sorry for anyone with millions and millions of depreciating assets and million dollar urine…

    Roger

  68. The Man Says:

    What people don’t understand are that celebrities are public figures and thus have images to maintain. Think about it. If you saw LeBron at McD’s wearing a free t-shirt and a $30 pair of shoes, it would most definitely change your perception of him. It may even change your perception of him to the point where you will no longer believe the King James hype created in his advertisements, making him less marketable to his team and potential endorsers. LeBron, a person with a success-oriented demeanor, also wants to believe that he is the greatest person in the world and he can manifest it by having a car that no one else has, by having the most extravagant house in his county, by having clothes that only the super rich can afford. Therefore, he has a financial and psychological incentive to spend monstrous sums of money to keep up appearances. It only becomes an issue when he doesn’t budget for his future retirement, when his cash outflows will greatly exceed his income. Sadly, that often turns out to be the case.

    To the poster that uses Warren Buffet as a comparison, you are making an invalid comparison. In Buffet’s profession, the people who need to know that he’s the best investor in the world already know that, regardless of what types of personal assets (clothes, autos, planes, houses, etc.) he owns. He also doesn’t need to come into a meeting wearing a $30,000 suit in order to be successful. He already has a reputation of success. “Private-sector” wealth, which most of us have since our pay figures and lifestyles aren’t for public consumption and possible profit, and “public-sector” wealth, which celebrities have, are not comparable. I can go out tomorrow and make a billion dollars and few people outside of my business associates and family would be aware of my good fortune. Hence, I can continue to drive a Honda Accord (or a Maybach, for that matter) without it impacting any aspect of my life. Celebrities have to look like the idols that they are and thus cannot do that unless they have a considerable amount of humility–an attribute that does not necessarily jibe with someone who has reached the unquestioned top of their very public, competitive profession.

  69. Rihanna (1 comments.) Says:

    wow, what a great artical

  70. Spartan106 Says:

    @The Man

    That is the most illogical nonsense I’ve ever read. Do you know what kind of clothes LeBron James or Kevin Garnett wears? Have you ever read a blog that discusses which athletes drive regular cars or eat at cheap restaurants? Everyone sees advertising from celebrity endorsers on a daily basis and most people couldn’t tell you the first thing about their personal financial habits.

  71. Copycat Says:

    Cuban-

    Enjoyed your article.
    Looks like ESPN has used your idea AND substance without giving you the credit for it.
    See this link:
    http://sports.espn.go.com/espnmag/story?id=3469271

  72. Bill Says:

    Interesting article, but it glosses over the biggest problem: fathering children out of wedlock. It’s said that the AVERAGE player in the NBA has a child out of wedlock. That’s the most expensive “investment” of all. They sleep around, and father kids with women they have no intention of marrying, and then they pay child support for the next 18 years (most of which will take place after the end of the NBA joyride). The best financial education these guys could get is a sex ed course during their initial training camp.

  73. Moses Says:

    Rick Cain Says:
    “Cry me a river. Perhaps we should create a “stupid athletes” welfare fund so they can continue their life of crack cocaine, whores, and european sportscars after they go bankrupt”

    LOL ROTF … that was so sarcastically funny. Stupid Athletes Welfare Fund, why not? It would be hialarious .. isn’t out there a scam artis to plot this one out?

  74. Hawk Says:

    Okay…for those that don’t believe, look at Michael Beasley. For those who don’t know who he is…he was this years #1 draft pick in the NBA. ESPN had a video capturing his life moments prior to the draft. The dude drives up in a freaken Maybach wearing a very expensive suit and jewlery. He had probably already spent $750,000 before he even signed a contract.

    Now don’t get me wrong, I’m not emplying that all professional athletes do this but it’s the Beasley’s of the world that get the spot light. Unfortunately for them, they’re still in the spot light as they walk down to file for bankruptcy.

    This too is nothing new to those who win big lotteries. A suggestion for your next article, do something about people who have won over $100MIL in a lottery. I’d like to see how all of those people are doing, especially those who chose to take the cash up front instead of a steady check coming in over the next 30 years of their life.

  75. Cash Says:

    @Brian,

    Kudos for bringing up the topic. My response is on topic, even refuting ridiculous claims by sebastian.

    Your brother had a windfall, how did he handle it?

    I have personally known several people in military and college that went from true rags to mega riches including a Billionaire. I knew him when his invitation to me was to eat steamed squid and beer in his apartment in NYC because that was all he had!

    This issue cuts across race, class, gender and IQ, although Sebastian and Toolboy enjoy thinking otherwise.

    I cringed when an aquaintance was out with an NBA player and he blew $800,000 in one night…more than most of us will make in a lifetime!

    @Sebastian and Toolboy http://www.slate.com/id/2416/sidebar/50882/ The Bell Curve is obvioulsy severly flawed. Unfortunately you cannot find ANY other data to prove your theory.

    http://www.slate.com/id/2416/sidebar/50883/ Of course we know you’re dying to say the “N” word with your theory.

    You’re obviously a lower IQ for wasting so much time “battling” political incorrectness to please your deep desire to insult Aftican Americans, when your children will be overrun by Hispanics in this country in less than 50 years according to the U.S. Census.

    Of course the below science was created by Jews, so for guys like you two, it will be impossible to accept.

    There are many social scientists and geneticists who do not think IQ is a measure of total intelligence.

    “The prevalence of different kinds of mental talents has led Harvard University’s Howard Gardner to suggest that people possess seven different kinds of intelligence: the traditional notions of intelligence, such as verbal skills, mathematical reasoning and spatial abilities, as well as smarts in music and body movement, and social skills involving the degree of mastery a person has over himself and his talent for interacting with others. Conventional IQ tests measure only a tiny sliver of these skills, argues Gardner, thereby ignoring the “genius” of artists like Pablo Picasso, Martha Graham, and Igor Stravinsky.”

    Yale’s Robert Sternberg has created tests that measure “practical intelligence” to determine how well people do in real life situations. These tests predict job performance better than IQ tests. According to Sternberg, “Many other factors, taken together have more influence on the outcome of people’s lives than IQ” such as personality, motivation, experience, and the environment in which he was born. Sternberg notes that “in any field such as art, technology, teaching and science, creativity is at least as important as IQ.” Even though many prominent social scientists dispute Murray and Herrnsteins’ total acceptance of IQ as the ultimate measure of intelligence we will accept their claim for the sake of discussion.

    Plus a list that directly blows away the Bell Curve. These are just 10 of the 100′s of poor African American’s that invented things like refrigeration, light bulb filament (which the original bulb patent was purchased by Edison from a Black man), the traffic light etc.

    http://listverse.com/science/top-10-african-american-inventors/

  76. the insider (1 comments.) Says:

    Jordan Woy? On the surface it seem’s like he is doing these guys a great service.
    But why did he get sued by an annunity company that paid him to appear at his “seminar”, when they didn’t get the PUSH that he promised? He gave the stamp of approval to another annunity company that also paid him to appear. All of the companies that appear there pay Jordan a large appearance fee.

  77. Matthew Says:

    A Christian athlete (I won’t name him without permission) was told, “It must be easy to tithe making as much as you do.” His response? “It’s never easy to write a $30,000 tithe check.”

  78. Ulio Says:

    I think it is weird . That most these misfortunes occur in USA , how come some of the European athletes never have such problems . Is it maybe that taxes for athletes in america higher then in europe ?
    For why do they go broke ? I think it mostly because spending becomes a habit .
    Like you said or Jordan mentioned ( am not sure ) that most of these athletes just keep spending the money when there even earning enough to compensate for it.

  79. jddd Says:

    Meanwhile, Michael Vick's $3M mansion sits empty in Atlanta, with no bidders at the last auction…

    I read a study once that said the least happy Americans were big lottery winners.
    The happiest – the Amish. They expect little, and are happy with what they have. If only we were all that smart!

  80. Debbi Says:

    So true
    I have found the best college that focuses on finances business and investing! You can take the courses online or in person with the experts in the field of study you choose. Not Teachers or motivational speakers but millionaires who practice what they preach and want to give back.
    If you would like to know more email me at otterson9@comcast.net
    everyone should take these courses Wish they were around 25 years ago. But I am glad I know it now!
    I'm 117K dollars richer because of it!!

  81. mmagazine (1 comments.) Says:

    i don't have to go through the complicated and tedious process of filing taxes. These people came in with an army of people around them doing their account and getting a piece of that fortune too in the process.

  82. Mavericktrader (1 comments.) Says:

    Ever think about what it takes to become financial sophistocated? I deal with this very issue extensively in my new book. I attribute this to a preprogram mindset that I call the Cultural Paradigm. I hope you all get this book, it will prevent this from happening to you.

  83. dirtyjax Says:

    Fantastic point… our academic curiculum needs to be geared to teaching kids about finances and real world skills.

  84. Demtron (1 comments.) Says:

    All Americans, including pro athletes, should start a business for themselves at live off the earnings from that business for a period of a few years. You learn how to scrape by and pay the bills until you become cash-flow positive. Going through that period provides a needed perspective on what you have, how lucky you are, and the purpose that money should serve one's life.

  85. venelatin Says:

    yes, true and scary!!! They shoudnt get that much money is a big mistake!!!

  86. Chris Says:

    I think Skip is on his way to partially understanding the RELEVANCE of the misfortune of athletes AND Hollywoodsters (and ignorant Lotto winers) … WHO REALLY CARES !! Regardless of their background, their obvious ignorance, low intelligence or stupidity … these people are sickening!! They are NOT victims of their own wealth as your article seems to imply. These are the most pampered, self-important, dumb-lucky, half-witted humans on earth! They not only derserve to lose all of their capitalization, but they should be given a Darwin award and then taken right out of the gene pool so we can stop overpopulating this 3rd rock. There are BILLIONS of people on this planet who can't live check-to-check or even day-to-day! The majority of people in America (the middle class) work hard for their income, pay the tax bills including the huge Obamacare deficit. Many are even well educated, but most are resigned to join the daily grind and constantly worry about where the next tripe will drop. They have not been given such an instaneous increment of monetary fortune. The self-serving behavior of Pro athletes are simply stupid. You can hand them a fortune, and out of sheer GREED, IGNORANCE and disgusting EGO_MANIA, they will give it back! Good ridens to all of them!

  87. Anita Lobo Says:

    Fav bit – most people die coming down from Mt. Everest not going up. The goal is for these athletes to get to their Mt. Everest AND to get down safely.
    Applies to business owners too!
    Intriguing post.
    Cheers
    Anita Lobo

  88. John McCauley, Jr. Says:

    Reading the astute and memorable words of John Smith was like a soothing breeze being ushered into a stagnant and heated room of hot air. John Smith hit the nail on the head when he iterated that the best life for a financially endowed (rich) person is the one of simplicity. If you are indeed fortunate to have access to nice sums of (legal) tender (money), consider yourself blessed and in a situation where you can do much good. Use your good fortune as a tool and as a weapon to purvey good and benevolence. Become more like our Master, the Christ, becoming selfless and more thoughtful of others. Enjoy life, travel, live a moderate and balanced lifestyle in most things. Remember in the end – when we leave this earth (as we all must) – we surely will take nothing with us, but our reputations and our deeds. But then again, if you are going to that place we call "Paradise", why would we really need to take anything… Peace be unto you…

  89. DAT GUY Says:

    Great article, BUT it does not take a brain sergnt to figure out if you sit on a lumpsum of cash you can live off your interest alone.. It's sad to read stories like this but I don't feel bad for them none of them!! SO SK I AGREE!!!

  90. asdfgsa Says:

    Getting a large sum of money is especially hard if you never came from money. I received a personal injury settlement & ended up through stock market losses & just plain stupidity/waste, blowing $500,000 in less than 1 year. Luckily I invested 1/2 of it in an annuity that pays me for life. If I have learned & can recommend only 1 thing from all if this, those commercials you see on TV, offering to buy your annuity, DON'T DO IT! My annuity is the only thing that saved me. Odds are that once you sell your annuity, probably for pennies on the dollar, the money will be gone & you will be in the same position you were before you sold the annuity. Guaranteed income for life, is better than a small or large lump sum, at least for most people that is, since they don't k wo how to manage money.

  91. Credit Card (1 comments.) Says:

    very interesting. i think there is a curious case of perception differing from reality. the individuals are under the impression they have all that money and spend like its never going away without attention of costs.

4 Trackbacks For This Post

  1. Star athletes go for broke « Says:

    [...] blame on basic profligacy and scam artists, but Mark Cuban’s brother Brian, writing on his personal Web site, finds that excuse makes him [...]

  2. Thoughts From Ronn Torossian » Blog Archive Says:

    [...] accessible and real.  For that reason, I often read his blog.  Recently, I found his brother’s blog post about Evander Holyfield’s bankruptcy to be especially [...]

  3. Links - 14th June 2008 « Curiously Persistent Says:

    [...] Why professional athletes go broke (Brian Cuban) – essentially, their skills are in their chosen field, not financial management [...]

  4. Athletes and Bankruptcy | Ride of my Life Says:

    [...] has a brother (an attorney, works with Mark’s companies) who wrote a great article, Why Athletes Go Broke.  It highlights a few other famous athletes who have gone broke, including Mike Tyson, Dorothy [...]

Leave a Reply

CommentLuv badge

Follow Me



Who’s Reading Shattered Image?

no images were found

Newsletter

Sign up for The Revolution Rant! Stay up to date on the great guests and provocative topics on my weekly web-cast!
Viva la Revolucion!


powered by MailChimp!

Related Sites

  • NightcapTV Catch The Cuban Revolution Every Thursday at 9pm(CT) On NightcapTV!
google-site-verification: google17190a1b860a2726.html