60% of NBA players bankrupt 5 years after retirement

[MililaniBuckeye]

There is nothing wrong with treating yourself to the fruits of your efforts and talent, but there needs to be a degree of restraint. Good ahead and pay off your parent's house, or maybe even buy them a little bit bigger and newer house, and get them a nice car. But don't buy them a fucking 10,000 square-foot multi-million dollar mansion, and a fully-pimped Escalade for each parent. Many players see what Shaq and Kobe and other top-paid players have, and they think they deserve and can afford the same level of lifestyle.

I wonder what sort of mandatory financial educational services the league provides (if any).

 

[Buckeyeskickbuttocks]

If you had given my a million bucks when I was 18, I'd have a whole lot of shit and nothing to show for it.

Give me a million bucks now and I'll probably buy a few things I really want.... but, most of it's gonna end up earning me more money.

It's called maturity... and most NBA players don't have it (especially the ones who came stright out of HS (with a few exceptions, of course). In my mind, this news is the same reason why the league lost me as a fan - young kids. They're not highly skilled... and - as should be little surprised - stupid with money.

 

[MililaniBuckeye]

If you had given my a million bucks when I was 18, I'd have a whole lot of shit and nothing to show for it.

Give me a million bucks now and I'll probably buy a few things I really want.... but, most of it's gonna end up earning me more money.

Most of these kids are at least 21 and have 3-4 years of college, so they should have a degree of maturity. Still, the league should institute mandatory financial counseling for all new players, and should mandate annual refreshers for at least the first five years in the league.

 

[Buckeyeskickbuttocks]

Most of these kids are at least 21 and have 3-4 years of college, so they should have a degree of maturity. Still, the league should institute mandatory financial counseling for all new players, and should mandate annual refreshers for at least the first five years in the league.

If you say so. Truth is I haven't watched an NBA game in .... well... when did Jordan's Bulls win their last championship... some 10 years ago, right?

Far as I'm concerned, the league is full of HS kids and college drop outs (Yes, I know that's too strong... I should say underclassment turned pro)

I agree with you re: the financial counseling though.

 

[HailToMichigan]

I wonder how far back the data goes. Salaries didn't go sky-high until really about the mid-90s. Joe Dumars and Isiah Thomas didn't make $3 million between them during the '89-'90 season when the Pistons were winning their second of two Bad Boys titles. And those are the two superstars. Salaries in the '80s weren't exorbitant like they are now - salaries in the '70s were such that a lot of players were still working offseason jobs. Sure, that $1.9 million that Isiah was earning is still a lot of money, but that's Walter Herrmann money these days; it's not much higher than the veteran's minimum.

Knowing how far back this study goes would be very helpful in figuring out just how useful that 60% figure is.

 

[MililaniBuckeye]

I wonder how far back the data goes. Salaries didn't go sky-high until really about the mid-90s.

That's well over a decade ago, and even in the late '80s and early '90s most players were making 10-20 times what the average Joe Citizen was making.

 

[MililaniBuckeye]

Far as I'm concerned, the league is full of HS kids and college drop outs (Yes, I know that's too strong... I should say underclassment turned pro).

There are only a handful of players in the league that came in as high school kids, and not that many players with less than a few years of college.

 

[BB73]

Still, the league should institute mandatory financial counseling for all new players, and should mandate annual refreshers for at least the first five years in the league.

I'm pretty sure they make all the new players go through some financial counseling; I've seen stories about that over the last couple of years. I don't know about the "refreshing" in subsequent years.

 

[coastalbuck]

I think the "how to deal with your money, take care of your possessions, and conduct your affairs discussion" should begin in High School. Unfortunately, it probably doesn't need to be limited to athletes.

 

[HailToMichigan]

That's well over a decade ago, and even in the late '80s and early '90s most players were making 10-20 times what the average Joe Citizen was making.

All true, and I'm not trying to make excuses or anything for the players from the '80s, but the 60% number could use some context otherwise it's not very helpful. When people hear "NBA players", certain salary numbers come to mind, and they're nothing like the salary numbers of a generation ago, so there's a caveat or two that ought to be thrown in.

 

[LitlBuck]

Part of the problem is just because someone who receives "financial counseling" doesn't mean that they invest or spend their money wisely. There have been a number of good posts of what NBA players should do but they won't because many of them, regardless of ethnic origination, have been deprived over the years. Also, I think many NBA players come from broken families and that certainly does not help matters.:(

 

[Ginn4Heisman20]

I think the "how to deal with your money, take care of your possessions, and conduct your affairs discussion" should begin in High School.

Actually, my high school (Northmont) did have a class somewhat like that for Freshman and Sophomores , though it was optional. They started by teaching us how to balance a checkbook, write out a budget, buy a new car, why it's important to establish good credit, and other simple things like that. By the end of the quarter we were learning about many different topics like how all different sorts of loans work; IRAs and retirement plans; and pretty much how to make wise financial decisions in general. In retrospect it was a really good class and also a good point in my life to take it. Learning about finances right before you get a job and start driving on your own would probably help a lot of kids out there. Same goes for NBA players, if guys getting into the league learn about how they can take a lot of money now and turn it into a fortune ten years down the I think more would be willing to show some fiscal responsibility.
Also, at the risk of being really long winded, as much as I disagree fundamentally with a great many of the aspects of "hip-hop" culture there is an entrepreneurial aspect to it as well. There are a number of rappers who have parlayed their musical success into business success, starting clothing lines, record labels, liquor brands, and on and on. I guess my point is that just because an NBA player may buy into the whole rap scene doesn't mean they can't be highly successful in the business world if their eyes are opened to the possibilities. That's why having these sort of classes for them early on in their careers could help out quite a few ball players.

 

[ochre]

"The city is nice," he said. "The only thing is, they don't have any Wal-Marts near my house. I go to Best Buy or Target, but those places are pretty expensive."

Greg Oden gets it.

:)

 

[Oh8ch]

Is it that hard to hire someone to manage your money, when you make that much...

I submit that those with the first hint that there is a need to manage your money are not among the bankrupt.

I don't see the first hint of a problem here. If these kids want to serve as a conduit to funnel cash to jewelers and car dealers so be it. For the most part they were blessed with talent, speed, size or a combination thereof. I know some some will argue that many practiced really, really hard. But I would also submit that there is a correlation between how easy it was to be good and how quickly they went bankrupt.

On the universal scale of "who most deserves to be a multi-millionaire" professional athletes are far down my list.

Easy come easy go.

 

[Buckeye Buh Nim]

Some thoughts.

I don't think its a matter of maturity, I think there are a number of factors at play here.

First and foremost, is that handling money is a skill. A skill that can be taught/learned. It is not unlike driving a car. Most people do OK with a car under normal circumstances. They don't have too much trouble managing a vehicle at or up to 80 MPH. That doesn't mean that they are ready to get behind the wheel of an open wheel race car hitting upwards of 200mph.

A 10 million salary has a heluva nice sound to it, but let's face it, thats not what they make. Everyone has a hand out including the NBA players union, their agent, the tax man, a professional staff including lawyers and accountants.

Then you get the pressure from friends and family to do things like buy houses, ease their burdens, etc... They see the published salary and figure that you are taking home 10 million a year.

Next comes the peer pressure. Athletes are competitive and want to outdo one another. So they have to have the latest/best cars, houses, luxuries.

Its really a recipe for disaster.

Does anybody here know about Kevin Houser?