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How and Why Athletes Go Broke (2009)

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Re: How and Why Athletes Go Broke (2009)

#81

Post by vanjoe »

rrdharan wrote: post #73
talmand wrote: post #70

Earlier quoted context omitted.

I'm curious as to how hockey is any more expensive than any other sport that has player equipment and a privileged background is more beneficial to making it to the professional level than any other sport. Could it be that black kids as a group just isn't that interested in playing hockey?

Especially given that it's Black History month, it sounds like you might be interested in watching this movie: https://en.wikipedia.org/wiki/Soul_on_Ice_(film) And consider this criticism of the somewhat rosier picture portrayed in that film: https://hockeyinsociety.com/2017/03/06/soul-on-ice-the-day-t...

That criticism seems to conflate culture with skin. The NHL has a culture where bring the spotlight on individuals is frowned upon (For a long time having a high number on you sweater was considered showboaty). The article wants to call this "white culture" that is unwelcoming to people of colour. That seems wrong to me.

Re: How and Why Athletes Go Broke (2009)

#83

Post by efa »

lazerpants wrote: post #72
efa wrote: post #69

I don't know all the tax implications around huge salaries like these, but every time I read one of these stories I always wonder why they don't just stick their money in t-bills or CDs. Something completely risk free that will get a modest return. If you have 20 million in the bank do you really need to invest in high risk stuff to try to double your money? The problem is everyone they've ever known comes out of the…

This is why there should probably be an early age pension system for these athletes. The major sports leagues could certainly afford it (and it would lower players upfront salaries some).

Agree. My young son was recently in a car accident. As part of the agreement with the insurance company he got some compensation. But this is in the form of an annuity with yearly payments when he turns 18. This protects him from parents looking to blow the money and from him blowing the money when he turns 18.

Re: How and Why Athletes Go Broke (2009)

#84

Post by ch4s3 »

1jojojo wrote: post #57
ch4s3 wrote: post #30

Earlier quoted context omitted.

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?

Ahh, I'm postulating a bit.

>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.

As I said, I could be wrong. But we know that other fields like management, fashion, music, etc are dominated by risk takers. It may not be true of sports or all sports, but you could imagine that a risk taking basketball player, football QB or running back, soccer forward, or similar players tend to be risk takers.

Again, I could be wrong.

Re: How and Why Athletes Go Broke (2009)

#85

Post by specialist »

test6554 wrote: post #62
ChuckMcM wrote: post #55

Earlier quoted context omitted.

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…

It's not their responsibility though. The player could take a course on their own initiative.

Which courses do you recommend?

Re: How and Why Athletes Go Broke (2009)

#86

Post by alvah »

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…

I'm not convinced it's as black and white as that. Look at the example given (Rocket Ismail). Not to pick on an individual, but he doesn't seem to be taking responsibility for any of his losses, even with the supposed "hindsight" he now enjoys:

-"One of his advisers pitched the idea as"fail-proof, with no downsides," Ismail recalls. He never recouped his money and has no idea what became of the restaurant."

-(COZ Records) "The guy was a real good talker," says Rocket

-(Cosmetics) "We were not prepared for the sharks in the beauty industry"

-(Retail stores) "The main store opened up in New Orleans, but doggone Hurricane Katrina came two months later". The shops no longer exist.

What strikes me about these examples is they're all supposedly somebody else's fault.

To my mind, what isn't being taught (both to young athletes, and to the population in general) isn't so much personal finance, but personal responsibility.

Re: How and Why Athletes Go Broke (2009)

#87

Post by 48snickers »

ChuckMcM wrote: post #55
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…

The NFL already does: https://www.marketwatch.com/story/this-nfl-training-camp-tur...

Re: How and Why Athletes Go Broke (2009)

#88

Post by specialist »

IntronExon wrote: post #6
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?

I have an unsupported conjecture that critical thinking skills and financial literacy aren’t taught in (US) schools more or less intentionally. Financial literacy would harm the business models of institutions offering many types of loans, mortgages, lines of credit, etc. Truly educated consumers are harder to fleece. Critical thinking dovetails with that, and would probably make it harder for ideological, religious,…

re financial literacy

Robert Kiyosaki and Sharon Lechter have been telling everyone who will listen since at least 1997.

https://en.wikipedia.org/wiki/Rich_Dad_Poor_Dad

re critical thinking

Years ago, one candidate for my state's Superintendent of Public Instruction aggressively opposed adding critical thinking and problem solving to the curriculum. It'd distract from all that useful standardized testing. She won. Served two terms (8 years).

https://www.linkedin.com/in/judith-billings-11a3621a/

Re: How and Why Athletes Go Broke (2009)

#89

Post by LordKano »

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…

I would consider a much less drastic step.

Mandatory contribution of 10% of their income into an investment account and that has a maximum annual withdrawal of 1% until age 55.

If they otherwise destroy their finances, they'll at least be able to afford a place to live.

Re: How and Why Athletes Go Broke (2009)

#90

Post by specialist »

ch4s3 wrote: post #84
1jojojo wrote: post #57

Earlier quoted context omitted.

Being a star athlete is highly correlated with having a risk insensitive personality. According to whom?

Ahh, I'm postulating a bit. >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. As I said, I could be wrong. But we know that other fields like management, fashion, music, etc are dominated by risk takers. It may not be true of sports or all sports, but you could imagine that a risk taking basketball player, football QB or running back, soccer forward, o…

Please stop explaining yourself. They're trolling you.
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