What Broke Sports Stars Can Teach You About Personal Finances

Athletic skill and financial acumen don’t always come in the same package, which is why many successful pro athletes run out of money once their fat paychecks stop rolling in.

Last month, The New York Times took a look at sports stars who squandered their millions and wound up in financial trouble. Bad luck, ill-advised investments and poor money management are usually at the core of these riches-to-rags tales. Here are the lessons the reporter gleaned from the athletes:

*Take it slow. If you come in to more money than you’re used to, there’s no need to make hasty decisions, such as investments or major purchases, that spread you thin. It’s rare that you’ll find a major financial move that won’t work out better without a few extra days, weeks or months of forethought.

*Be careful about where you get your advice. If you have a large sum of cash at your disposal, people will come at you from all sides with suggestions about what you should do with it. Every potential adviser — even a standard money manager you’ll find at a brokerage — has their own agendas and prejudices. If you allow others to do your financial thinking for you, it’s tougher to keep track of your financial big picture.

*Think small. It’s tempting to use all the resources at your disposal to immediately fulfill the dreams for you or your family, but it’s far more important to take care of the basics before spending big. Establishing precedents of extreme indulgence and generosity makes it tough to stop continuing the patterns.

Financial Lessons From Sports Stars’ Mistakes [The New York Times]


Edit Your Comment

  1. Bsamm09 says:

    Spend all your money on big houses and other items that cost a lot in upkeep and when the money stream runs out, those become burdens quickly.

  2. Hoss says:

    Who needs a financial adviser? Just open up a chain of burger joints, that always works

    • incident man stole my avatar says:

      Fattburger.. Columbia, MD… RIP – Orlando “Zeus” Brown

    • frankrizzo:You're locked up in here with me. says:

      The guy in the Wendy’s commercial. Ulysses “Junior” Bridgeman from East Chicago, Indiana. He has 165 Wendy’s that he owns now. I remember watching two teams from East Chicago in the early 70’s become two of the greatest of all time. Bridgeman, Tim Stoddard (Baltimore Orioles) Pete Trgovich (UCLA).

      Sorry. Triggered childhood memories.

  3. Loias supports harsher punishments against corporations says:

    Sports Stars: Taking goldfish a little too literally.

  4. pop top says:

    You mean people who may or may not finish college (and sometimes don’t even finish high school) who have been insulated from any problems for years may have financial trouble?

    • tundey says:

      It’s not just sport stars. I read or watch something that says most people that win lotteries run out of money very quickly (I think Oprah did a show about it). For once, that’s a problem I would like to have. I bet I can make the money last.

      • mauispiderweb says:

        You and me, both.

      • pop top says:

        “It’s not just sport stars.”

        But this article is so, you know, that’s who I’m talking about.

      • malraux says:

        you mean that people who play the lottery are bad at money management? That’s shocking news!

      • Kuri says:

        Heh, my mom had some sense about it. She said if we ever won we wouldn’t go crazy, my dad would keep his job, and we would keep it to ourselves, since we don;’t suddenly need relatives who never talk to us suddenly caring about us.

    • Boo LaRue says:

      I agree with you wholeheartedly. This is why I have no sympathy for these people.

      • TouchMyMonkey says:

        So you have not sympathy for someone who has been used up by the Man, who was only interested in his athletic prowess, then subsequently left to rot once those gifts diminished? You, sir, are an ass, and I hope your personal hell involves standing in front of a casino wearing a humiliating costume while people badger you all day with “hey, aren’t you, uh, so and so, uh, you know, that guy who used to play, uh, what was it again?” for all eternity. That is, while you’re not doing those odious commercials for reverse mortgages or Nutri-System, or some such basic cable garbage.

  5. raydee wandered off on a tangent and got lost says:

    There was a series, “The Worst Case Scenario Survival Handbook,” which was pretty funny and spawned a lot of follow-ups, i.e. “the Zombie Apocalypse Survival Handbook.”

    But the one that amused me the most was the “Best-Case Scenario Survival Handbook,” which included a chapter on “How to Survive Unexpected Riches,” with examples being “Winning the Lottery,” “Unexpected Inheritance,” and things along those lines. One of the first rules was “Tell no one, not even your mother. She is a terrible gossip, and then the whole family will be calling you for hand-outs.”

    Maybe “Ridiculous sports contracts” should also include a clause offering “Professional Financial Advice” or something.

    • RandomHookup says:

      It’s hard to tell people who are convinced they are immortal and destined for fame that they need to protect themselves from the downside.

      • raydee wandered off on a tangent and got lost says:

        Which is stupid. Athletic careers are, by their very nature, something people cannot do for their entire lifes. You can work well into your 70’s doing desk jobs and simple retail, but most professional athletes retire in their early-mid 30’s–one number suggested the average as beeing 33.

        No matter how many millions you’re making during your career, if you want to stop working at 33, you’re going to have to put some effort into planning for post-retirement. It should be obvious. Which means … I guess maybe it isn’t so obvious after all.

        • RandomHookup says:

          Most athletes who make it professionally are fairly young and not exposed to the harsher realities of life after sports. It’s hard to convince a 19-year old who just signed a multimillion dollar NBA deal that he won’t be a Hall of Famer with an easy post-playing career job and that the paychecks could run out tomorrow in the case of a strike.

    • Jane_Gage says:

      Oh, I will find a way to circuitously tell my entire family. And when they slime their way out from under their rock looking for freebies I’ll just apologize and say it’s all tied up in investments. :D

    • econobiker says:

      “How to Survive Unexpected Riches,”

      There is supposed to be a book about “what to do if you win a big lottery” but I don’t know the actual book name nor do my current financial circumstances require me to know that information.

    • drjayphd says:

      “Maybe “Ridiculous sports contracts” should also include a clause offering “Professional Financial Advice” or something.”

      They kind of do. The NFL has a rookie symposium about just this sort of thing… well, at least they would, if not for the lockout.

  6. Cat says:

    An “Entourage” of hangers-on (is that a word?) can break the bank rather quickly. And add “Pop Stars” to the list of broke stars, although some of them manage to eek out rather longish careers despite an incredible lack of talent and financial sense.

    • Loias supports harsher punishments against corporations says:

      Sometimes their lack of talent and financial sense is what keeps them famous.

      (See: famous for being famous)

  7. YouDidWhatNow? says:

    Pro motocrossers have the same issue…they’re so young when they make it big, and their career lasts such a short time, that they tend to blow it all and then have to get a real job.

    Typically, a star motocross (or supercross) rider goes pro at somewhere between 16 and 19. Then their career is often over by about 25 or so – although the age has been going up into the 30s recently. When I was in college, there was a pro rider that finally won his first national championship when he was 28 – and then couldn’t get a factory ride the next year, because he was simply too old. Moto/supercross is a brutal sport…you just can’t stay on top of it for too long.

    As a result of being really young when you started making the big bucks, and only having a few years in which to earn it, wads of MX stars totally blew their money. Nowadays there’s specialized finance types who cater to the small number of such stars to help them manage their short earnings years…

    • Downfall says:

      In related news, there’s something called motorcross. (???).

      • raydee wandered off on a tangent and got lost says:

        Like Nascar for dirtbikes. Danger x 5 billion.

      • econobiker says:

        Motocross is motorcycles in the dirt. Think extreme dirt bike stunting but over and over again, and around and around a track and in different cities over the course of the season. Pounding body punishment ne par excellence…

        ( I knew a pro 250cc Supercross rider when he was at the top of his game so I can speak as a first hand witness.)

  8. Oranges w/ Cheese says:

    1) Put it in the bank and ignore it except for emergencies. Keep working. Tell no one.
    2) Retire happy a lot earlier than you had initially planned.
    3) ???
    4) PROFIT (literally)

    • belsonc says:

      3) Make smart investments which will provide you with the pocket money to live off of in a manner you can deal with


    • DrPizza says:

      That’s the problem – when they retire from their sport, it only takes them a couple of years to blow all their money.

    • u1itn0w2day says:

      Exactly, I guess you could also say live below your means so that means a 30K Chrysler 300 instead of a 50k Mercedes in sports star world.

    • AstroPig7 says:

      Wouldn’t it be smarter to load it onto debit cards and keep them under your bed for 10 years? ;)

  9. KyBash says:

    Why not a Coogan’s law for athletes? Most of them act like children.

  10. marc6065 says:

    Sw shw nc wth cllg thlt wtng wth hs gnt fr hs frst rnd cll n th drft. Lkd lk h ws sttng n sm pblc hsng nt wth hs grndm nd bt 500 rltvs. Wndr hw mny wll b xng fr hndt tw mnts ftr h gts th cll??? Tk f grdm bcs sh rsd yr ss nd frgt th rst, H nd hw bt pyng bck ll th wlfr nd fd stmps y gt whn yr grndm ws rsng y btt whl yr “mms” ws t dng drgs nd ppppng t mr kds wth 20 dffrnt “bby dddys”!!!

  11. u1itn0w2day says:

    Broke sports stars or sports stars in general can teach the public at large that you will only have around a 10 year window of oppurtunity to make big bucks and that you to will have to plan ahead and invest & save. A 30 year stint at a well paying company is no longer a probable reality/option.

    So if you are getting lots of overtime and bonuses now do not spend it now. Spend a little but not alot. Also if your are in a position to get overtime and bonuses get some extra buckets to keep under the running faucet. In other words fewer Fri night binges so you can get up Sat moring for overtime or fewer happy hours during the weak. Or spend that extra money on education & training. Remember a 5-10 year window of oppurtunity to set yourself up for life.

  12. ChuckECheese says:

    In before the hookers and blow!

  13. Exceptional Vampire Does Not Sparkle says:

    Having a closet full of high class hookers gets expensive quickly i guess?

  14. Exceptional Vampire Does Not Sparkle says:

    I would just pay off the house and put the rest on the bank as a cushion while i keep working. (Buy the place i work at?)

  15. Murph1908 says:

    Herm Edwards gave this advice to his NFL rookies.

    Stick to just one of anything. One house. One car. One girlfriend. Only one gold chain, not the Mr. T starter set.

    Doesn’t apply to the rest of us, but good advice to those who just came into a lot of money.

  16. econobiker says:

    The late Steve McNair from Tennessee Titans- millions of dollars, multiple properties, multiple businesses, children by first and second wife and no will so his estate went to probate.

    That there was no lawyer ever in his background who could convince or would draft a will for him is the real crime.


    “No records have surfaced indicating McNair — who earned more than $75 million in NFL contracts over his 13-year career — set up trust funds or completed any estate planning.”

  17. Alliance to Restore the Republic of the United States of America says:

    “Two chicks at the same time. I figure if I had a million dollars I could hook that up.”

  18. Jillia says:

    Another problem too is keeping up with the high rollers. Lets say you’re just a benchwarmer and get league minimum which is probably somewhere around 200K/year. Pretty cushy if you ask me. BUT, there’s your buddy, the pro super star athlete over there who just signed a multi-million dollar contract, who has multiple houses, cars, women, etc. That’s not to say he won’t fall into this trap either. But you want to keep up with the Jones’ which is also how money gets easily depleted.

    When asked (i forget the exact figures but it went something like this), “would you rather make $50,000 and all your friends made $30,000/year, OR make $100,000, but all your friends make $500,000/year?” Most people picked 50K.

  19. AllanG54 says:

    Lenny Dykstra and Tiki Barber….’nuff said.

  20. drjayphd says:

    Brandon Jennings actually did that, getting news for sticking with a Ford Edge instead of something twice as expensive after signing his first NBA deal. Why? In part, because he figured there’d be a lockout.

    Although to be fair, he actually went to Italy for a year after high school before coming back to the NBA, so he at least has the experience of living on his own.

  21. frankrizzo:You're locked up in here with me. says:

    And then there are people like Neal Anderson, ex-Chicago Bear running back. He knew he had a small career window so he lived well within his means and PLANNED to retire for good after football. And guess what?

    He did.

    Sacrifice a little up front, get a bigger return on the back.