“Professional athletes make the majority of their income in a short period of time versus an entrepreneur or a real estate developer who earns it over their entire lifetime, so the difference is they can save over that period of an enduring income stream versus a professional athlete.”
– Peter Michaels, managing director, Toh Michaels Private Wealth Management
When they first hit the NFL, many rookies soon discover, a lot of people want their money. And if they aren’t careful, some of those people may end up with a good deal of it. Here’s a sad statistic that may even shock some of YouWager’s serious NFL football wagering fans: 78% of the players in the league will be bankrupt only a few years after they leave the sport.
Just like the rest of us, athletes need to spend less than they make to hang on to their money. But their situation can be much more critical. In the case of NFL players and other professional athletes, so much money comes their way, so early, it’s like a premature payoff. In most cases, this will not continue for a long time. Most players enter the NFL when they are only in the early 20’s. This is the time when ordinary citizens are still learning how to balance their checkbooks and make smart purchases. Investing huge sums is a gamble, even for experts. It’s even harder if you are just a kid. The sizable income these players are playing with will have to last them the rest of their lives.
Too bad these athletes can’t wager on football, one YouWager bettor joked. At least they would be investing in something they have some knowledge about, he said. Of course, they can always explore that option later on, after they leave the sport.
Another big issue is saying “no’ to their friends. Teams worry about the people that attach themselves to players. Considered to be one of the country’s top prospects, Tavon Austin, a running back, wide receiver, and return specialist, from West Virginia was drafted with the 8th overall pick of the 2013 NFL Draft by the St. Louis Rams. While Austin is admired for his skill, many clubs were concerned about the friends, pals, and people that would try to hang on to Austin once he becomes wealthy and famous.
Austin appears to be one of the lucky ones, a young man with priorities, but he says people that know him are a problem. People from “the hood.” Austin told YouWager’s source, “Everybody expects a lot of things from you as far as money. Everybody wants to be around you. My phone doesn’t stop ringing now. It feels like they’re counting my bank account now. So that’s probably the hardest thing for me right now, just people.” Austin just wants to move his mother and grandmother to safer neighborhood. “The goal was to get my mother and my grandmother out of the city. That was my No. 1 goal and that’s happening now,” Austin told YouWager’s source.
Successful athletes do need an entourage, but not their childhood pals.
They need a team of experts, financial planners say. Doug Eldridge, a partner at the DLE Agency, a firm that specializes in sports, told YouWager’s source. “It is incumbent young [athletes] assemble a professional team around them of advisors no different than a president has a cabinet composed of very specific experts of different areas to advise.”