Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How and Why Athletes Go Broke (2009)

si.com

Post reply on HN
Print view View original

91–100 of 277 posts

Re: How and Why Athletes Go Broke (2009)

#91

Post by jessaustin »

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…

Like any employer, it isn't actually in leagues' interests for their employees to have financial acumen. Your boss loves to see your new $50k vehicle in the parking lot.

Re: How and Why Athletes Go Broke (2009)

#92

Post by LordKano »

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,…

If someone is determined to screw themselves, it's impossible to stop them.

Re: How and Why Athletes Go Broke (2009)

#93

Post by specialist »

manigandham wrote: post #27
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…

It's called personal responsibility. They're earning sums that many will never reach and it's on them to figure out what to do with it. Nobody is stopping them from asking for help and it's not like there aren't enough examples to learn from by now. Someone who doesn't have responsibility can't be forced into it.

So now naivety (ignorance) is a moral failing?

Re: How and Why Athletes Go Broke (2009)

#94

Post by Jtsummers »

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.

It doesn't need to be their responsibility, it is something they could do and wouldn't cost them much.

If anything it could help with their recruiting efforts: Show a list of athletes that got screwed by shady advisors; show how they'll connect you with real advisors (at established and more trusted institutions) and education to discern what options are good and what aren't.

Won't make a difference when tyring to get that top QB, but it may for all those guys who're only making $150k-300k.

Re: How and Why Athletes Go Broke (2009)

#95

Post by Jtsummers »

jessaustin wrote: post #91
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…

Like any employer, it isn't actually in leagues' interests for their employees to have financial acumen. Your boss loves to see your new $50k vehicle in the parking lot.

You're right, them having debt like that means they're more likely to stick around (because they can't afford to quit). But it also means they could be more mercenary (seeking out the jobs that get them out of the debt, or let them keep spending themselves into debt).

Debt also puts people into compromised positions. Having worked around defense stuffs, that's an exploitable position. And people will exploit it. It's not just for government secrets either. Working on a corporate X project to make the latest and greatest self driving car? Have 6- or 7-figure debt? Someone may slide up to you in a bar and buddy up, take advantage of the desperation and get you to compromise your employer's secrets. For athletes, this means getting asked to throw games and underperform.

Re: How and Why Athletes Go Broke (2009)

#96

Post by Kluny »

majormajor wrote: post #79
Kluny wrote: post #49

Earlier quoted context omitted.

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…

Seems pretty anecdotal. Hockey tends to get less press in general than baseball, so I know of a lot more broke white baseball players than broke white hockey players. There's some broke white golfers out there too, that's another money-requiring sport. Any broke Formula 1 race drivers or tennis players? That's where you'd really look for athletes coming from wealthy families, I think.

In Canada it's different - our sports press is all hockey, all the time. Granted I don't pay much attention to it, but if any sports news makes it to my news feed, it probably is going to be about atheletes going bankrupt.

Re: How and Why Athletes Go Broke (2009)

#97

Post by Kluny »

LordKano wrote: post #89
Kluny wrote: post #49

Earlier quoted context omitted.

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.

In Canada we have the CPP (Canada Pension Plan) which is almost literally this, except everyone pays into it.

Re: How and Why Athletes Go Broke (2009)

#98

Post by nikanj »

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 wonder how much shady side-betting these financial advisors do. It's easy to make a few hundred thousand, if you get to decide where your client invests a few million.

Reminds me of the good old Goldman Sachs, who made a killing betting _against_ their clients. https://www.theguardian.com/world/2010/apr/25/goldman-sachs-...

Re: How and Why Athletes Go Broke (2009)

#99

Post by nkrisc »

alvah wrote: post #86
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 Rec…

These examples mostly sound like they're about financial literacy, or at least the first thing you learn: if it sounds too good to be true, it probably is.

Individually:

Nothing is fail-proof.

People will say anything to get your money.

Business is cutthroat.

And shit happens.

Re: How and Why Athletes Go Broke (2009)

#100

Post by manigandham »

specialist wrote: post #93
manigandham wrote: post #27

Earlier quoted context omitted.

It's called personal responsibility. They're earning sums that many will never reach and it's on them to figure out what to do with it. Nobody is stopping them from asking for help and it's not like there aren't enough examples to learn from by now. Someone who doesn't have responsibility can't be forced into it.

So now naivety (ignorance) is a moral failing?

No, who said anything about right or wrong here? What I said is responsibility. If you're naive/ignorant/otherwise unprepared then the answer is to ask for help and learn so you can be better prepared. That would be best for your future but it's ultimately up to you and nobody else really cares what you do.
Post reply on HN