Over the years, for professional athletes, we have seen astronomical contracts that have repeatedly broken records. We have also seen the sobering news that many athletes go broke. At times, we may fall into the trap and think, how can you go broke after earning hundreds of millions of dollars? But do not forget, a lot of our sports stars are young and have never had the life experiences that would have taught them how to manage money and plan for the future.
Athletes Go Broke Due To Short Careers
For most athletes, once they sign the big contact, the financial mistakes are immediate. Some begin spending in anticipation of the contract or is out spending once signed. This happens in some cases because like us, many athletes are aware of the superstars who have decades long careers. Many rookies believe that they will continue to play their respective sports for years to come, earning an ever increasing salary. But this is not the case.
For the National Basketball Association (NBA), the average player lasts around 4.5 years. Like many other sports, making it to the NBA is hard, staying there is even harder. For the National Football League (NFL), the average career length is about 3.3 years. Let’s take a deeper look at the NFL. On average kickers and punters last 4.9 years, quarterbacks last about 4.4 years, cornerbacks last about 2.9 years, wide receivers last about 2.8 years and running backs last a dismal 2.5 years. Those in the National Hockey League (NHL) fare a bit better and last around 5 years. The average career of a Major League Baseball (MLB) player is about 5.6 years, and soccer players have careers of about 8 years.
It is therefore unsurprising that the average retirement age for MLB players is about 29.5, 28.2 for NHL players, 28 for NBA players, and 27.6 for NFL players.
If you have no transferable skills, lack financial discipline and your career lasts only a few years, you will have financial problems. No wonder athletes go broke.
Athletes Go Broke Due To Their Contracts:
Not all sports contracts are created equal. In some leagues, it is normal for the contracts to be guaranteed, but this is not the case for others. So when a player signs a contract for hundreds of millions of dollars, depending on the league, they may never receive the full amount.
Players’ contracts are guaranteed in Major League Soccer (MLS). For the most part, NBA, MLB and NHL contracts are also fully guaranteed. However, this is not the case for the NFL. For many NFL players, only a portion of their contract is guaranteed. This is very troubling as the NFL has one of the shortest career spans of the major sports. NFL players are faced with only a few years on average of playing in the league and also not having guaranteed contracts. Don’t forget, as a contact sport, NFL players also have a very high risk of injury.
Young And Dumb
If you received 100 million dollars upon your 18th birthday, in ten years, would you have more or less. The fact is, for many of us, at the age of 18-25, our sense of money is to get it and spend it. For many, this is the period of time where we spend a lot of time trying to impress the opposite sex.
With money, comes the expensive cars, clothing and homes. At this age, as hormones rage, it may be a matter of time before kids. For many professional athletes, kids occur outside of wedlock which leads to child support and crazy exes. Think of your twenties but to the extreme. The fact is, not many of us could manage money in our twenties.
For athletes, it is a bit worst. Everyone you know, knows that you have money. Everyone around you potentially will have their hands out or will be reaching into your pockets. For so many athletes, it was family, agents, accountants or friends that stole from them. It is no wonder about 78% of professional athletes go broke after 3 years of retirement. Some professional athletes stand very little chance of building wealth in view of the people that are around them.
Most professional athletes just do not realize until it is too late – your career will be short, and your savings must last for the rest of your life.
What Can We Learn
What we can learn from athletes is that it is not about how much money you have, it is about how much you keep and grow. If you have no financial background or do not know how to mange your money, it is likely that you will lose it. No matter if it is 10 dollars or 10 million dollars.
As you move through your career, or your many careers, learn to manage and grow your money. You should learn who to trust and set boundaries with friends and family to ensure that your financial future is secure. Be the CEO of your life and your financial position. It is your money so take responsibility for what happens to it.
Conclusion
Over the years, for professional athletes, we have seen astronomical contracts that have repeatedly broken records. We have also seen the sobering news that many athletes go broke. At times, we may fall in the trap and think, how can you go broke after earning hundreds of millions of dollars? But do not forget, a lot of our sports stars are young and have never had the life experiences that would have taught them how to manage money and plan for the future.
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