Splurge
Many athletes go broke because they splurge too much. Some players make enough money to spend it any way that they want to without any repercussions. Many of them can’t, though. Every athlete isn’t making $20 million per year. ESPN showed a “30 for 30” documentary titled “Broke” a few years ago. They talked to several former athletes that had money and lost it all because of their mistakes. Many of them spent ridiculous amounts of money on cars and houses. A few players were spending money to try and keep up with their higher earning teammates. Obviously, that didn’t work out for them.
Not educated
Some players are not educated about money at all. They may not have been raised in a household that knew about or even had money. Imagine getting a large sum of money in your early 20’s after being poor your whole life. If you didn’t know anything about money I’m sure you’d make a few mistakes as well. The messed up thing is that by the time some of these athletes decide to learn about money it’s too late.
Hiring the wrong people
Some athletes hire the wrong people. There have been numerous stories where financial advisors and agents have been stealing money from athletes. That’s a horrible situation. Athletes should do thorough research before they go out and hire just anyone to be their financial advisor.
Don’t have multiple streams of income
A lot of athletes don’t have multiple streams of income. They may have made millions during their playing days, but mismanagement of those funds could have them broke. By having multiple streams of income, athletes will, at least, be making money in more than one way.
Don’t plan for life after the game
Unfortunately, a lot of athletes don’t plan for life after the game. I’ve read far too many stories where athletes blew their money and ended up having to get a regular job. Many of them only thought about today, when they should have also been thinking about tomorrow.
Helping too many people out
I’ve heard about a couple situations where athletes went broke by trying to help too many people out. There is nothing wrong with helping your family and friends out, but you can only do so much. Going broke shouldn’t be part of the process. I know athletes probably have friends and family coming all out of the woodwork. It’s a shame that some people would ask for more money after you already helped them out.
To summarize, the money mistakes that athletes make are splurging too much, they don’t educate themselves about money, they hire the wrong people, they don’t have multiple streams of income, they don’t plan for life after the game and they help too many people out.
Jason Butler
Jason Butler is an Atlanta native, as well as businessman, blogger and teacher. Not only is Jason a prolific flipper, marketer, writer and side hustler his number of years in higher education and student support have given him expert knowledge in understanding the economics of the student loan industry.
I’ll add to you list one more. Marrying unwisely, or having children out of wedlock with multiple women. Without going into the morality (or lack thereof}, it is a dumb financial move to have a bunch of children with different women who then want extreme amounts of child support. And marrying a woman you might just barely know and who might be marrying for money is a disaster since in divorce courts she will be awarded alimony so she can continue to live in the style to which she became accustomed. Bad move.
I think the biggest thing is the point you made about trying to help out too many people. I can only imagine how many people magically appear back in someone’s life when they make it as a professional athlete. If you aren’t tough on deciding who to help and who not to, I’m sure the money can go very very quick because no one ever reappears and asks for something small or cheap.