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My Sunday Washington Post Business Section column is out. This morning, we look at how often pro athletes manage to go financially bust.

The print version had the headline Congratulations, you were drafted! Prepare to go broke!, while the online version is merely Professional athletes need to learn to keep their finances in good shape.

In the column, I detail why pros go broke (Youth and inexperience play a large part in it) as well as what they can do to avoid the most common fate of the pro athlete.

Here’s an excerpt from the column:

“The data on professional athletes are startling: Shortly after they retire, nearly four of five NFL players are bankrupt or under financial stress, according to Sports Illustrated. Joblessness and divorce are the main reasons. It’s marginally better in the National Basketball Association, where after retirement nearly two of three players are broke within five years.

Why does this happen? There are lessons here even for those investors who cannot hit a jump shot. Let’s look at the reasons so many athletes go broke.”

I really like what the Post did in the dead tree version of the paper — nice art work, including a good table:
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athlete bust


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Source:
Professional athletes need to learn to keep their finances in good shape
Barry Ritholtz
Washington Post, June 1 2014  
http://wapo.st/1nT4d4L

Category: Apprenticed Investor, Foreclosures, Investing, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Congratulations, you were drafted! Prepare to go broke.”

  1. CD4P says:

    That was $400 million made 10+ years ago, too. (Must have been fun blowing it, save for getting punched in the face along the way to earn it…)

    And to think, Warren Buffet was so hung-up on the time value of money he refused to buy a crib for their 1st born child and instead insisted his wife use a dresser drawer to do the job.

  2. alabama says:

    No Allen Iverson? John Daly?

  3. plm128 says:

    see ‘Broke’ on 30 for 30 from ESPN – it had a huge list of BK athletes at the end of the credits
    http://espn.go.com/30for30/film?page=broke

  4. DeDude says:

    Well we all have to “keep up with the Jones’es”, right? But when “the Jones’es” are players who make millions more than you, it’s hard to do. Even harder after your career runs out.

  5. DeDude says:

    I heard a great sentence passing two young guys in the hallway this morning: “hey its your money, you might as well spend it while you have it”.

  6. BoKolis says:

    …and George Best made his $100MM in the ’60s & ‘&70s, and spent it on booze, birds and fast cars and pissed away the rest.

    I’m guessing Floyd went broke before he started making his money…and it’s all sitting in cash- not even sweeps cash.

    Another big problem is, when these guys knock up a cleat chaser, whatever formula is being used in cooking up the child support $$ is very likely not considering the reality that BR points out, that most of their money is gone before they see it…so playing Genghis Khan may very well carry a steeper price than it should.