ATHLETES AND MONEY – IT'S NOT HOW YOU START BUT HOW YOU FINISH
May 31, 2017
With the NBA draft coming up in June, I wonder how many of these young, talented athletes are prepared for what a lot of money can do to them.
Instant gratification is tough to compete against, but if you understand that you can have your cake and eat it too...…would you listen?
I would like you to consider the 50/50 rule of thumb. First and foremost, you need to protect half of your capital. Lock it up and forget about it. If you lock it up, that is 50 percent less anyone will convince you to share or spend. You still have room to splurge…just not as much.
As Shaquille O’Neil once said, “It is not about how much money you make. The question is are you educated enough to KEEP it.”
I would suggest two financial products to begin with…life insurance and annuities.
If you are an athlete and have others depending on you for financial support of any kind, you should give life insurance some thought. You earn your money and earn it fast but financial security isn’t usually on the top of an athlete’s list.
Life insurance, especially with its currently favorable tax treatment, is an excellent savings vehicle. Not only does it allow you to conservatively store your wealth in a relatively safe place, but you can instantly access it through “policy loans” from the insurance company.
Historically, Americans used to rely on life insurance as a major savings vehicle. This sounds perhaps shocking , but remember the scene from It’s a Wonderful Life, when George Bailey is down on his luck and runs to the greedy Mr. Potter for help. What does Bailey bring to Mr. Potter as an asset? Why, his life insurance policy.
Insurance products are less expensive for the healthy and young. Consider setting up a plan early in your career when you have the capital available. I would be happy to help you with any information regarding life insurance including detailed descriptions and quotes.
What Is An Annuity?
An annuity is an investment with tax-deferred growth, guarantees, safety, a death benefit, flexibility, and the option to have a monthly stream of income.
If NBA players put 50 percent of their income into an annuity, they would be financially stable after their careers are over. If you continue to purchase annuities each year when you are getting big pay checks, you could potentially accumulate more than enough money for the rest of your life.
I Lost Everything
"In reality, when I had all that money, money destroyed everything around me that I loved," said former linebacker Keith McCants. His contract: $7.4 million PLUS one of the largest signing bonuses ever offered to a rookie defender. He was 20 year old, and became a millionaire overnight.
(McCants) "What do you do with that money? I'll tell you what I did with that money. I lost everything."
(ESPN) "Where did it all go?"
(McCants) "Gave it away."
(Cowan) "So who did you end up giving money to? Friends? Family?"
(McCants) "Everybody. Anybody who asked. I was from Mobile, Alabama, I'm green. I'm gullible. I didn't know no better."
Athletes Who Lost Tons of Money With Bad Investments or Forced Into Bankruptcy