Post by Kenny HernandezA reoccurring theme that I see in the news that was brought up by Dr. Boyce Watkins is that athletes who made several million dollars in their career end up being bankrupt within 10 years of their retirement. A general theme as to why these athletes lose all of their money is due to trusting the wrong people and making poor business decisions. Also, having to keep up with the high profile celebrity lifestyle takes its toll when not having any source of income after retiring.
Others say that there is a psychological reason as to why bankruptcy occurs. With the loss of celebrity status, name recognition, income, and perks such as free meals and support staff, many athletes fill the void with frivolous spending. Also, it is mentally difficult to accept a job with such an extreme pay cut when retiring after being accustomed to having multimillion-dollar contracts and bonuses.
The prevalent theory, however, is that athletes spend too much on money houses, cars, and jewelry. They also give money away to too many friends and family members, as well as suspicious business ventures.
References:
http://sports.espn.go.com/espnmag/story?id=3469271
http://www.briancuban.com/why-athletes-go-broke/
http://www.usatoday.com/sports/football/super/2006-01-28-retirement-perils_x.htm
Others say that there is a psychological reason as to why bankruptcy occurs. With the loss of celebrity status, name recognition, income, and perks such as free meals and support staff, many athletes fill the void with frivolous spending. Also, it is mentally difficult to accept a job with such an extreme pay cut when retiring after being accustomed to having multimillion-dollar contracts and bonuses.
The prevalent theory, however, is that athletes spend too much on money houses, cars, and jewelry. They also give money away to too many friends and family members, as well as suspicious business ventures.
References:
http://sports.espn.go.com/espnmag/story?id=3469271
http://www.briancuban.com/why-athletes-go-broke/
http://www.usatoday.com/sports/football/super/2006-01-28-retirement-perils_x.htm
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ReplyDeleteIn this article many good points and reasons are brought up of why athletes go bankrupt. I have also seen many athletes who loose all their money short time after their retirement from professional sports because of different reasons. I think two reasons that are not mentioned above could be that the athletes often lack any experience in the job market and that they did not learn how to deal with their money.
ReplyDeleteProfessional athletes often start their career at a young age without even having a completed education. Sport is everything that counts in their lives and they do not even bother what comes after their retirement. In my opinion this is a big mistake which could be prevented. Young athletes should mind to also pay attention to their education as well as their sport.
Another point is that athletes often have their agents who deal with their budgets. All the athletes have to do is train and compete and they do not have to bother about any finances. Like this they never learn how to deal with money. When the athlete finally comes to the point of retirement he is totally overstrained by all the stuff, one aspect is the financial one, he has to manage now in his life.
Stefanie Marty