I’m pretty sure that a lot of us have heard the statistic, that most athletes go broke within two years of them leaving their profession. While it is true that some people do have bad spending habits and sometimes get caught up with trying to live a lifestyle to portray a certain image to the public. There is also a side of the story that is very rarely told. The side that keeps the athlete financially blind, while someone profits off their hard work, but walks away unbothered and without blame when the money is gone.
Some athletes that come into a lot of money, are usually “first generation” rich kids. Meaning they are the first in their family to come into money and they usually attain that money at a young age. With that being said, the athlete has a lot to learn about how money actually works. Some think it is as easy as make the money, save some, spend some, go make so more, but it is much more complicated than that. If you didn’t go to school to study finances or have the right people around you to help you with money management, it’s easy to blow through it. The part of the story that isn’t told is how some “money experts” or financial advisors play a vital role in athletes going broke.
One game that’s played begins with financial advisor keeps the athlete blind to anything that pertains to finances and the education of money. That way he or she can legally take money from the player and not have to answer to anyone. According to a Ernst & Young, a professional services firm, released a report titled “Athletes Targeted by Fraud”. The report alleged from 2004 – 2017 athletes have had $500 million dollars in fraud related loses. Of that $500 million, $334 million was from 2014 -2017. It was also noted that some cases have not been identified or reported. You also hear, “that athlete made some terrible investments”, well isn’t that where the financial advisor is supposed to step in and vet that deal? Another question that is hardly asked is if the advisor brought that deal to the table? If the advisor did bring that athlete the deal and it went bad, the advisor walks away without blame and no loss, because “every investment is a risk”. Yes, as a money maker, YOU are 100% responsible for your earnings and your well being. The moral of this story is to show that, there are often people behind the scenes that play a part in the financial down fall of others.
Here is quick story about something that happened to me. I didn’t grow up rich or well off, but I did have two hard working parents who provided everything my siblings and I needed. When I first turned pro, I accounted for every penny I made and every penny that went out. I kept a notebook with me at all that times. In that notebook was every transaction I had ever made. Some of my closest friends knew I was doing that, and used to laugh at me and say “Wad, you know they have online banking now, right?”, well, I didn’t trust that either. Over this time frame of about five or six years, I would study finances, I’d read any and everything that had to do with money, then I realized that there was information that I still didn’t understand, so I decided to drop my guards and seek help from a professional. Every year the NBA would have this firm come in and talk to every NBA team about finances. I figured well the league brought them in here they must be good. I contacted the guy who came to speak, told him my situation, and his response was a little sketchy to me. I countered him with the information I had taught myself and read in different books and some of things he was saying to me didn’t make sense, I had questions. My questions must didn’t sit well with the guy, because he never got back to me. A year passed and here this guy is speaking to our team again. I told one of my teammates about what had previously happened. My teammate raised his hand during the meeting and asked, “why didn’t you ever get back to Wad when he had questions?”. The speaker laughed off the question and moved forward with his lecture. Later on the founder of that firm pleaded guilty of trying to defraud the NBA Players Association of $3 million. Now if they got the Players Union, imagine how many individual players were taken advantage of.
I will never forget the lesson I learned from my Tar Heel brother, Brendan Haywood. I called him one afternoon, excited about this car I was going to buy and the deal I was getting on it. He let me go through my whole speech about how great the car was then we ended our call. He called me back less than five minutes later and asked me where I lived. I lived in one of the nicest apartment complexes in my area at the time, I told him. His response put me in check. He said “Don’t buy that car, go get you a house first. I will whoop your a** if I catch you driving a car that cost more than a house that you don’t have.” That was one of my first lessons in financial prioritizing. I’m thankful, I had someone around who wasn’t scared to tell me the truth.
Till this day I continue to educate myself on finances. I seek professional help, read everything possible, and I listen. I refuse to be a statistic to something I can control. To my fellow athletes, and everyday hard working people, I advise you to do the same. The education is free, just ask google.
Till next time… Strive To Excel!