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How and Why Athletes Go Broke (2009)

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Re: How and Why Athletes Go Broke (2009)

#51

Post by boohoo2them »

I'm sorry, but I have an extremely hard time even feeling sorry for these guys.

Someone who receives an 18 million contract over a short span of 3-6 years, [1] and then goes broke a year after the end, I'm just not going to have any sympathy for them at all.

Lets see, an 18,000,000 dollar contract. If they did the second worst thing the could do (first being what they did do) which is just collect the money into a checking account earning no interest, that 18 mil would allow them to draw a $300,000/year salary for 60 years before the principle (the 18mil) was exhausted.

[1] and I certainly have no sympathy for them given the fact that not one of these sports players ever deserves being paid anywhere near this amount of money. They don't even deserve 1% of what they are getting paid. So to be broke a few years later, boo-hoo to them.

Re: How and Why Athletes Go Broke (2009)

#52

Post by Brockenstein »

crankylinuxuser wrote: post #38
soared wrote: post #22

Earlier quoted context omitted.

Replace your employer with government and its real life social security. In theory I support it... if it lasted till I retired.

Unfortunately, what Cato says is very worrying (1). Primarily, they highlight court cases in which Social Security is pulled away from people, and reaffirmed by SCOTUS. This is the troubling quote: The Court’s decision was not surprising. In an earlier case, Helvering v. Davis (1937), the Court had ruled that Social Security was not a contributory insurance program, saying, “The proceeds of both the employee and empl…

>Then do the right thing and set Social Security as a guarantee at the same age for everyone.

You have to take in consideration a few factors governing the original social security age limits. IE Life expectancy was significantly less. People live on average quite a bit longer now, addressing that reality isn't a bad idea.

The other thing to consider is the money we're paying in now isn't being saved for our benefit later. It's being used to pay the benefits of current retirees. Not to mention the money that current retirees paid into the system 20, 30, 40 years ago is a pittance to what they're drawing now.

I mean I like the idea of social security. A lot of people do, it's become ingrained in our national expectation. But in the same token, a lot of people don't have realistic thoughts about it. And we're going to need it to evolve with the realities of our culture. Longer lifespans, real cost of living, etc are all real issues that can't be ignored and expect Social Security to chug on perpetually.

Re: How and Why Athletes Go Broke (2009)

#53

Post by refurb »

IntronExon wrote: post #18
hycaria wrote: post #16

Earlier quoted context omitted.

Yes there's a big risk, because as we all know, humans are very predictable machines : once you teach them something, they consistently act accordingly. We can take as proof tobacco, obesity, sex ed, various addictions and various trendy denials.

Many humans would, unless you believe that the tobacco industry spent decades and billlions on FUD, bullshit research, and shady political dealing to keep people in the dark?

People have known smoking was harmful since the 1960's.

Re: How and Why Athletes Go Broke (2009)

#54

Post by screye »

MrFantastic wrote: post #41
Skunkleton wrote: post #2

This sounds a lot like how most people go broke. Even when you are talking about people who have been fortunate enough to make a lot of money (like lotto winners), the story sounds the similar. Maybe we need better financial education in the public school system?

The education system depends on student loans. Financial education would make people question the value of a college education.

College education pays back multiple fold though.

Instate tuition for top public universities is not that high, and helps you gain skills and even more importantly build a network that is certainly worth the investment.

Sure, there are many soft fields where job opportunities are sparse. But, a degree @ state tuition is certainly worth it for a good number of majors.

Re: How and Why Athletes Go Broke (2009)

#55

Post by ChuckMcM »

southphillyman wrote: post #50

The stereotype is that many of these athletes go broke because they are foolhardy with money. I appreciate that this article highlighted that a lot of these guys go broke because of scamming financial advisors. The athlete attempts to do the responsible thing and hires someone they are led to trust with managing their assets only to be ripped off. I'm not sure how financial literacy prevents this from happening when…

Agreed, look at it from their perspective. They haven't been around a lot of money before, they don't have a lot of friends who have been around a lot of money either, so they don't really know even what questions to ask to understand the people who are arguing to be their financial advisors.

Perhaps major league sports would do well to help train their athletes in the basics of financial management in order to help avoid this situation.

Re: How and Why Athletes Go Broke (2009)

#57

Post by 1jojojo »

ch4s3 wrote: post #30
andrepd wrote: post #23

Earlier quoted context omitted.

What's your basis for saying athletes have impulsive personalities?

Perhaps that could be better stated. Being a star athlete is highly correlated with having a risk insensitive personality. That type of personality also correlates with impulsive financial decisions. I'm no sure if that's all true of if it's anything more than correlation, but it makes some sense as a hypothesis.

Being a star athlete is highly correlated with having a risk insensitive personality.

According to whom?

Re: How and Why Athletes Go Broke (2009)

#58

Post by CodesInChaos »

seanalltogether wrote: post #32
ggm wrote: post #13

In many situations, people who are identified as being at risk have somebody else placed in control of the finance, by court action. Brain injury patients for instance. Hmmm.. hang on.. whats the major risk factor in the football circuit again? Seriously: the recruitment of minors for major league with giant cash benefits should require them to sign a consent form for arms-length management of their capital for some…

> Seriously: the recruitment of minors for major league with giant cash benefits should require them to sign a consent form for arms-length management of their capital for some time period, and give them the income stream not the capital. So this looks great at first right? It's like a lotto winner taking the lifetime payments instead of the lump sum. The problem is you can take loans against that money very easily,…

Related story: https://www.washingtonpost.com/local/social-issues/how-compa...

Re: How and Why Athletes Go Broke (2009)

#59

Post by saikit »

Kluny wrote: post #49
ggm wrote: post #13

In many situations, people who are identified as being at risk have somebody else placed in control of the finance, by court action. Brain injury patients for instance. Hmmm.. hang on.. whats the major risk factor in the football circuit again? Seriously: the recruitment of minors for major league with giant cash benefits should require them to sign a consent form for arms-length management of their capital for some…

Really, taking their adult autonomy away is the first step? How about education? This might be anecdotal, but I feel like we don't hear these athlete bankruptcy stories as often about hockey players. Why? Because they're all white, not black. Putting a kid through junior hockey is expensive and hockey players tend to come from privileged homes with much better financial education than young black football players. Th…

Could be an exception to the rule, but the highest profile athlete bankruptcy recently is from a hockey player

http://ftw.usatoday.com/2016/11/columbus-blue-jackets-jack-j...

Re: How and Why Athletes Go Broke (2009)

#60

Post by IntronExon »

refurb wrote: post #53
IntronExon wrote: post #18

Earlier quoted context omitted.

Many humans would, unless you believe that the tobacco industry spent decades and billlions on FUD, bullshit research, and shady political dealing to keep people in the dark?

People have known smoking was harmful since the 1960's.

Some people knew, others didn’t. “People know” is a nebulous and misleading concept. Today people know that vaccines are effective without causing autism, but um, yeah. Today people in much of the world don’t know or believe that smoking is harmful, and those places are the emerging markets for tobacco.

Besides, there’s knowing, and accepting. See AGW.

Edit: to clarify, people can be strongly influenced to disregard what is known in favor of what “feels right” or serves their perceived interests. Simply instilling knowledge in the absence of the ability to critically examine said knowledge is insufficient.

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