A Sports Illustrated article from awhile back included some sobering statistics about professional athletes and their money:
• By the time they have retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.
• Within five years of retirement, an estimated 60% of former NBA players are broke.
Most lost their millions because they listened to (and took) bad financial advice, trusted untrustworthy “friends” with their money and lacked the discipline and knowledge to make informed decisions about their current and future financial needs. The SI article paints a bleak picture. It likened professional athletes to those individuals who win the lottery. Suddenly faced with more money than they could ever have imagined, many make bad decisions that will affect them for the rest of their lives.
What could help athletes is what’s helping personal injury victims–investing in safe and secure investments with structured payouts. Despite today’s low interest rates, this strategy offers the most stable way to keep large sums of money (whether from a settlement, lottery winnings or large athletic contract) safe and away from unsavory investment schemes.
For the SI article, go to How And Why Athletes Go Broke.