Professional athletes are a really sad story– they start making “big” money and living like they will always earn this sort of income. They have new found “friends” and “family” that suddenly appear with their hands out. They blow big money on cars, clothes, homes, and God knows what else. They don’t realize that they are getting a lifetime of income in a very short period and that the gravy train will come to an end.

Many sports stars have a very short career and as such they ought not to be living the large lifestyle at all they shold be saving and investing (in smart investments) those first 5-10 years as many never have a career beyond 5 or 10 years.

Athletes and rock stars go broke because they have the wrong skills. They have the ability to MAKE WEALTH, but not the ability to KEEP WEALTH.

In fact, rock starts and athletes are WORSE than average people at getting rich. For me to get rich, I would have to create a business, save, and invest wisely. That’s pretty much my only path to wealth. But when I get there, I’ll have all the skills I need to keep it.

She related how when she was just starting out as an actress as a teenager, and was under contract to MGM, she appeared in a low budget movie. A movie star all the young girls swooned over had a small part. She asked the director why such a big name was in such a nothing movie. The director told her that’s what happens when you waste your money and need to pay the bills. You have to take whatever they give you. It was a lesson she remembered.

She went on to tell how Louis B Meyer would call her to his office every time her contract called for her to get an increase or be let go. She told how he would go into the same act. How they loved her, she was like a daughter, but the studio didn’t make enough money that year, and they wanted her to forgo the raise.

She would pull out her bank book and tell Meyer she saved every penny he ever gave her, and he could give her the raise or cancel her contract. Meyer would toss her out of his office, but he couldn’t get rid of Andy Hardy’s girlfriend, so he paid up.

What a great lesson to learn early in life.

I don’t know about other players’ associations, but the NFL does provide financial education to its players.

http://sports.espn.go.com/espn/page2/story?page=clemmons/080305

I also remember reading a story a while back about how one player on the Denver Broncos I think convinced a bunch of his teammates to invest in what ultimately turned out to be a financial scam. Made for some tense and awkward times in the locker room.

The problem is even worse if they suffer a career ending injury after blowing their first season’s salary, with nothing to last them afterward.

Or even if they’ve been pro for a few years before the injury happens, they spent their entire lives honing their bodies to play one specific sport (usually).

If anyone reading this knows a pro athlete, or knows a kid trying to become one, Dave Ramsey has a program for very wealthy people like this and others called Wealth Coach. He also has a full high school cirriculum, Foundations in Personal Finance. For the former, he works with all manners of rich folk. For the latter he worked with school cirriculum advisors to build up his existing materials.

You would think the player associations would provide financial management services or at least a list of approved advisers.

I only wish I had learned the lesson back then as well as I recall the story now but it’s never to late to put a plan in place.

http://www.daveramsey.com/etc/cms/index.cfm?intContentID=7339

I always thought that was kind of cool.