How and Why Athletes Go Broke (2009) • Hacker News Board

Re: How and Why Athletes Go Broke (2009)

#191

Post by ggm » Sat, Feb 10, 2018, 3:19 AM UTC

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…

Really, taking their adult autonomy away is the first step? How about education?

When do you educate somebody about how to control millions of dollars of assets, in the moment of giving them autonomy over them? If you want to propose education, then its rational to propose the control over the money before and during education is there, no? or, do you propose letting them blow the million on drugs and sex, and then teach them how to sustainably hold onto it, when all they have is a debt hole?

Re: How and Why Athletes Go Broke (2009)

#192

Post by heyjammo » Sat, Feb 10, 2018, 3:26 AM UTC

closeparen wrote: post #190

pascalxus wrote: post #123

At the end of the day, it's the same reason most people go broke: they know nothing about money. Unfortunately, Money is the most important thing in the world because you can't get anything without it. And yet, it's not even a primary subject taught in k-12. Where are people supposed to go for a decent financial education? Instead k-12 teaches kids about useless butterflies and countless other things that are of less…

>everyone should have the right to basic understanding of personal finances and basic economics. This is silly. Living within your means is like doing the dishes or the laundry. When someone "doesn't know how" or "needs to learn how" it's not that they're missing or failing to comprehend information. Even if they lack it, it's trivial to acquire. The relevant entities are discipline, habit, and values. This is not so…

Easy access to credit and sudden unfortunate circumstances bite people more often than you might think. You have it under control, until you don't.

Re: How and Why Athletes Go Broke (2009)

#193

Post by pzxc » Sat, Feb 10, 2018, 3:26 AM UTC

grahamburger wrote: post #187

pzxc wrote: post #182

Earlier quoted context omitted.

I believe you are completely incorrect, but fortunately the tide is turning. This article points out that 17 states now require personal finance education in high school, but 20 years ago only one state did (Illinois). http://www.businessinsider.com/high-schools-teaching-persona... I certainly did not have it myself, and my K-12 years were from 1985-1998 in Indiana (public school). We had an accounting class. We had…

Just because it's not required doesn't mean it didn't happen. > You think any of those people had personal finance classes? Yes, I'm almost certain some of them did. All the education in the world won't make good decisions for you when you once you set out in your own. We've been teaching kids sex ed for decades but we still have STDs and unwanted pregnancies. You really never had any other math teachers assign probl…

The math books teaching the formulas for calculating interest is not the same as personal finance education. As a geek of course I knew all the formulas, I couldn't even take a math class my senior year because I took Calculus as a junior and they ran out of possible math classes for me to take. But although I knew all the formulas, nope, I can't recall any math problems, or any explanations/descriptions, relating to: how credit cards work, minimum payments, grace periods before interest starts, the fact that after paying interest you have to pay it off and wait a full period before the grace period resumes, how balance transfers work... and that's just credit cards, and just the basics, not the more advanced topics like travel points/cashback, signup bonuses, churning, etc which you probably shouldn't be teaching kids anyway.

Nor was I ever taught anything about savings accounts, tax-deferred retirement accounts, stock investing, etc. Although I hear stock investing in particular does come up in a lot of schools because it's "fun". But I never had any teachers let us play the stock market for fun, I totally would have been into that. I was never even shown a tax form in school, let alone had it explained.

I was able to do my own taxes because my dad showed me how. My mom showed me how to balance a checkbook, although that rapidly became useless knowledge when I could start monitoring my account online on a daily basis :) The rest I just kinda figured out, or didn't. My dad told me credit cards were bad but never explained them, ended up getting in debt, have been out of debt for a few years and now use credit cards responsibly -- "pay off in full to get the cashback, never pay interest". Nope nobody ever told me that either.

Re: How and Why Athletes Go Broke (2009)

#194

Post by closeparen » Sat, Feb 10, 2018, 3:29 AM UTC

heyjammo wrote: post #192

closeparen wrote: post #190

Earlier quoted context omitted.

>everyone should have the right to basic understanding of personal finances and basic economics. This is silly. Living within your means is like doing the dishes or the laundry. When someone "doesn't know how" or "needs to learn how" it's not that they're missing or failing to comprehend information. Even if they lack it, it's trivial to acquire. The relevant entities are discipline, habit, and values. This is not so…

Easy access to credit and sudden unfortunate circumstances bite people more often than you might think. You have it under control, until you don't.

Exactly. Debt is typically caused by having less income than your situation demands (illness, parenthood, college without parental support, etc) and should be viewed as a symptom, not a cause.

Re: How and Why Athletes Go Broke (2009)

#195

Post by pgt » Sat, Feb 10, 2018, 3:42 AM UTC

pascalxus wrote: post #123

At the end of the day, it's the same reason most people go broke: they know nothing about money. Unfortunately, Money is the most important thing in the world because you can't get anything without it. And yet, it's not even a primary subject taught in k-12. Where are people supposed to go for a decent financial education? Instead k-12 teaches kids about useless butterflies and countless other things that are of less…

Wealth is what you have left when someone takes all your money away.

Re: How and Why Athletes Go Broke (2009)

#196

Post by tfigment » Sat, Feb 10, 2018, 4:01 AM UTC

pzxc wrote: post #182

grahamburger wrote: post #163

Earlier quoted context omitted.

I'm pretty sure your experience is pretty normal for the US. Lots of people forget that they had several classes that taught basics of personal finance, few people actually didn't have those classes.

I believe you are completely incorrect, but fortunately the tide is turning. This article points out that 17 states now require personal finance education in high school, but 20 years ago only one state did (Illinois). http://www.businessinsider.com/high-schools-teaching-persona... I certainly did not have it myself, and my K-12 years were from 1985-1998 in Indiana (public school). We had an accounting class. We had…

My experience mostly overlapping in time in Colorado where I went to 2 high schools. The one was the bad one with fights in the halls and mostly poor kids that did not offer any accounting/finance/home economics. The good school with wealthier families had an optional accounting course which I took and it covered checkbooks and interest and we even had to read credit card fine print in one class. (The teacher looked out for her students even helped get me a job working for a CPA part time).

Kinda sad how it works out that the ones that needed it more didn't have access. A little microcosm of America I guess.

Re: How and Why Athletes Go Broke (2009)

#197

Post by grahamburger » Sat, Feb 10, 2018, 4:01 AM UTC

pzxc wrote: post #193

grahamburger wrote: post #187

Earlier quoted context omitted.

Just because it's not required doesn't mean it didn't happen. > You think any of those people had personal finance classes? Yes, I'm almost certain some of them did. All the education in the world won't make good decisions for you when you once you set out in your own. We've been teaching kids sex ed for decades but we still have STDs and unwanted pregnancies. You really never had any other math teachers assign probl…

The math books teaching the formulas for calculating interest is not the same as personal finance education. As a geek of course I knew all the formulas, I couldn't even take a math class my senior year because I took Calculus as a junior and they ran out of possible math classes for me to take. But although I knew all the formulas, nope, I can't recall any math problems, or any explanations/descriptions, relating to…

I see what you're saying, and I didn't learn a lot of those specifics in school either (or actually I'm pretty sure I leaned some of them but have forgotten and had to learn again, which is basically my larger point). I'm not sure that I agree that we should be dedicating time in school to things as specific as what you listed (but maybe I could be convinced!). It seems to me that the few kids that would actually pay enough attention to a class like that to remember anything 3-5 years later when they have to start using it would find that much of it had become obselete (like your balancing check book example.) Almost everything you listed about credit cards is written in the forms you have to sign to get one anyway, if people aren't reading that I doubt a class from years earlier will help.

I do remember the first time I considered buying stocks that I literally had no idea how to do it. Like - who do I give my money to in exchange for a piece of a company? Absolutely no idea. I feel like the Internet has pretty much solved that problem though.

Re: How and Why Athletes Go Broke (2009)

#198

Post by vostok » Sat, Feb 10, 2018, 4:03 AM UTC

sowbug wrote: post #181

vostok wrote: post #136

Earlier quoted context omitted.

I'm more relying on my experience in trading with Goldman and other banks than I am assuming anything. I also don't see where I said anything about zero sum games.

FWIW, I read your comment the same zero-sum way. Perhaps it was because you used the term "the price" as if there's one price and any deviation from that value represents error. If I have three shoes, I might correctly place little value on the extra, while a person with only one shoe might correctly place a lot of value on it. My selling the shoe for anything more than $0 is rational, and the other person's buying t…

The shoe analogy is great.

It isn't perfect because in finance everyone's goal is to make money so it's a little more complicated, but there are similarities.

You might have a situation where ex-ante both parties are making the right decision, but one party would have rather not traded ex-post.

I might have some oil exposure so I want to sell oil futures. Maybe you think oil is going up because it's above some moving average so you show me a better market than the exchange for my size. We trade. If a minute later oil is higher than I will have wish that I waited a minute to sell and you'll be glad that you bought.

I'm not saying it's zero sum because we both willingly went into the trade and it's even possible that you'll make money on a 1 minute time frame and I'll make money on a 1 year time frame or I'll receive some other benefit.

This would happen all the time in a product that I used to trade at a non-bank financial firm. I had one way of valuing it and the banks had another way. We'd trade when we disagreed.

Re: How and Why Athletes Go Broke (2009)

#199

Post by wepple » Sat, Feb 10, 2018, 4:08 AM UTC

tim333 wrote: post #186

WalterBright wrote: post #105

Earlier quoted context omitted.

The best thing a person can do in such a situation is to put the money in a savings account, and then set about learning what to do. Nobody is going to have their best interests at heart but themselves. If you want to have money, you have to learn to manage it yourself. There's not really a choice about it. Also, hire a properly licensed CPA. Make sure to listen to his advice on taxes. Don't give him a financial ince…

Savings accounts don't do great over the long term. The safest thing is usually just to buy real estate as long as the prices aren't stupid.

You start with “the safest thing is..” then suggest property, only if they have knowledge of what prices are reasonable.

Doesn’t sound safe. Index fund would probably be safer. Or savings account.

Re: How and Why Athletes Go Broke (2009)

#200

Post by dizzystar » Sat, Feb 10, 2018, 4:09 AM UTC

closeparen wrote: post #190

pascalxus wrote: post #123

At the end of the day, it's the same reason most people go broke: they know nothing about money. Unfortunately, Money is the most important thing in the world because you can't get anything without it. And yet, it's not even a primary subject taught in k-12. Where are people supposed to go for a decent financial education? Instead k-12 teaches kids about useless butterflies and countless other things that are of less…

>everyone should have the right to basic understanding of personal finances and basic economics. This is silly. Living within your means is like doing the dishes or the laundry. When someone "doesn't know how" or "needs to learn how" it's not that they're missing or failing to comprehend information. Even if they lack it, it's trivial to acquire. The relevant entities are discipline, habit, and values. This is not so…

Everyone below a certain income starts with insufficient income to go to college, buy a car, go to the dentist, and many other things.

Living paycheck to paycheck is a very real thing, and it only takes a minor circumstance to cause massive debt. You don't even need a credit card to find yourself up to your eyeballs in debt.