By Myles Valentine
I could only dream of becoming a professional athlete and being able to give back to everyone who helped me along the way. As a fellow athlete I think I can speak for a majority of athletes when I say we dream of huge contracts and many luxury items. One thing we don’t dream about is bankruptcy. It doesn’t matter how much they make. Recession or no recession, many NFL,NBA, and Major League Baseball players have an appetite for losing most or all of there money.
According to Pablo Torre from Sports Illustrated there and two numbers,78 and 60. 78 percent of former NFL players have gone bankrupt or are under financial stress due to joblessness or divorce by the time they have been retired for two years. Within five years of retirement an estimated 60% of Former NBA players are broke. Numerous MLB players have suffered from the same economic crisis.
“A pro athletes money is suppose to outlive his career. Most players never get that” says Bill Duffy a veteran agent who’s clients include Steve Nash and Carmelo Anthony. Put the salary aside and the closest analogue to a pro athlete is not some white collar executive. It’s a lottery winner who’s often in his or her early twenties. For athletes, it’s not a lottery, or a game of chance. Pro athletes go broke due to a constant series of bad decisions, and seemingly no amount of cautionary tales. For example Evander Holyfield burned through his $230 million fortune on a 235-acre Utah estate, which has 109 rooms and included at least one monthly electric bill of $17,000. There was also a $550,000 loan he took out to pay for landscaping; $200,000 in back taxes, plus alimony and child support for three ex-wives and 11 children.
Taxes also have to come into consideration when trying to figure out why athletes file for bankruptcy. Every year the average football,baseball or basketball player owes about 1 million in federal taxes. In an article that MLB All-Star José Canseco wrote for vice magazine, he says ” The issue is very simple: If you’ve got friends and family, the more money you make, the more you spend on them,So let’s say you spend half your money on them and the rest on yourself and the cost of living. It may so happen that during all of that, you forget to pay your taxes.”
So when you make it to the professional level, the number one thing is money management. It is the key to success long term.