Excess, bad investments turn athletes broke
http://www.sportingnews.com/yourturn/viewtopic.php?t=530674
Seventy-eight percent of former NFL players are bankrupt or under financial stress within two years of retirement, and 60 percent of former NBA players are broke within five years of retirement, according to a Sports Illustrated story detailing the extravagant spending habits of professional athletes.
Documents cited in the story show that Shaquille O'Neal spends $875,015 per month, while former NBA guard Kenny Anderson burned through the $60 million he made as a player, partly by spending $41,000 per month, which included $10,000 worth of "hanging-out money."
But the biggest drain on athletes' money is poor investments, says Ed Butowsky, a wealth manager who advises athletes. "Chronic overallocation into real estate and bad private equity is the Number 1 problem [for athletes] in terms of a financial meltdown," Butowsky told Sports Illustrated.
According to the story, former NFL wide receiver Raghib Ismail lost money he invested in a theme restaurant, a record label, a religious movie, a cosmetics procedure, a phone-card-dispensing system and three calligraphy shops.
Michael Vick filed for Chapter 11 bankruptcy last July partly because he owes $6 million in bank loans he used to invest in an Indiana car-rental franchise, Canadian real estate and a wine shop in Georgia, according to the report.
Divorces and child support don't help, either. Athletes and agents estimate that the divorce rate for pro athletes is between 60 and 80 percent, according to the story. Furthermore, a celebrity divorce lawyer told Sports Illustrated that athletes obtain prenuptial agreements at rates appreciably less frequent than non-athletes at the same financial level.
As for family planning (or lack thereof), ex-NBA player Shawn Kemp and NFL free agent Travis Henry are among the athletes whose fortunes have been drained by five-figure monthly child-support obligations.
http://www.sportingnews.com/yourturn/viewtopic.php?t=530674
Seventy-eight percent of former NFL players are bankrupt or under financial stress within two years of retirement, and 60 percent of former NBA players are broke within five years of retirement, according to a Sports Illustrated story detailing the extravagant spending habits of professional athletes.
Documents cited in the story show that Shaquille O'Neal spends $875,015 per month, while former NBA guard Kenny Anderson burned through the $60 million he made as a player, partly by spending $41,000 per month, which included $10,000 worth of "hanging-out money."
But the biggest drain on athletes' money is poor investments, says Ed Butowsky, a wealth manager who advises athletes. "Chronic overallocation into real estate and bad private equity is the Number 1 problem [for athletes] in terms of a financial meltdown," Butowsky told Sports Illustrated.
According to the story, former NFL wide receiver Raghib Ismail lost money he invested in a theme restaurant, a record label, a religious movie, a cosmetics procedure, a phone-card-dispensing system and three calligraphy shops.
Michael Vick filed for Chapter 11 bankruptcy last July partly because he owes $6 million in bank loans he used to invest in an Indiana car-rental franchise, Canadian real estate and a wine shop in Georgia, according to the report.
Divorces and child support don't help, either. Athletes and agents estimate that the divorce rate for pro athletes is between 60 and 80 percent, according to the story. Furthermore, a celebrity divorce lawyer told Sports Illustrated that athletes obtain prenuptial agreements at rates appreciably less frequent than non-athletes at the same financial level.
As for family planning (or lack thereof), ex-NBA player Shawn Kemp and NFL free agent Travis Henry are among the athletes whose fortunes have been drained by five-figure monthly child-support obligations.
