(04-06-2016 07:56 PM)_C2_ Wrote:  It's more trouble than its worth if you end up in debt and with creditors. If you told me that after 40 years, I'd have a retirement plan though less than $3,000 left in the bank from a starting point of $108 million, I'd consider that a life well lived. AW's problem is he didn't even reach retirement before his money was gone.

This post got me thinking about NBA pension plans. Think about this quote. You've got to be kidding me, 140% of contributions! I don't know if there is a maximum contribution but max out one year and it's impossible to go broke, isn't it?

Quote:But that's not all! NBA players are also eligible to participate in a league-sponsored 401(k). Do you think your 401(k) plan is good with a 50% matching policy? The NBA matches player's contributions up to 140%.

http://www.investopedia.com/financial-ed...plans.aspx

(04-05-2016 06:42 PM)shere khan Wrote:  

(04-05-2016 06:13 PM)HarmonOliphantOberlanderDevine Wrote:  I have in my possession a book on Faith, Family and Foot and it does an amazingly job at exposing how vulnerable these men are to those scams and ladies. Families, friends and others leeches expect the athlete to place them on Easy Street for the rest of their lives. Often, veterans warn them but it is to the player to deny temptation.

It is a sad tale. From rags to riches to rags again.

108 million though? How do you piss away 108 millon?

"I created a very expensive lifestyle. That's how you lose your wealth real bad at the beginning"

It starts here and continues downhill. It is very easy to do. It also sounds like this guy got talked into putting his assets into backing a real estate company. Lots of people got burned in 2007-2008. He was a guarantor of the loans and the banks got theirs.

Many of these guys have no understanding of money and when they get it they spend it. Live the high life. They don't understand that just some simple discipline early on can secure a comfortable lifestyle but cannot secure an extravagant lifestyle.

(04-06-2016 07:55 AM)KnightLight Wrote:  Some athletes are much more financially responsible than others....as more than a few that are (especially in football), are now able to retire well before their playing days are over...because they've done a great job with the $$$ they have earned.

One of the last person's many would have thought to be financially responsible is Gronkowski....who hasn't touched ONE GAME CHECK, as all of his current spending is done with his marketing $$$ as his game checks/salary goes straight to the bank/safe investments.

http://ftw.usatoday.com/2015/06/rob-gron...nfl-salary

He is another player that could retire before the age of 30 and be 'set for life'...but he might still play after that just because he enjoys doing it. (Wonder what the fun factor or even the success factor will be for him after Brady retires?).

The issue is what does it mean to be "set for life" You can't live in Vegas casinos, gamble your ass off, and make it rain in the club every weekend, keep your entourage and maintain that lifestyle unless you have the income. You can however have a very nice house on the ocean, not have to work, play golf, eat out every night and send your kids to college. Those are two different ways of being "set for life". for many of these guys by the time they realize this their career is over and the earnings stop.

Lets do some guessing...

$108 mil
Taxes - 48mi (highest tax bracket, poor planning, municipal, sales, etc.)
- - - -
$60mil to spend
- 3 mil gambling (he lost $800k in one six week period, so this is probably low)
- 3 mil friends and family (bought his mom a $350k house in year one)
- 3 mil cars (top of the line BMW, Bentleys, Maybach, etc. Traded out most years)
- 200k clothes (never wore the same designer suit stwice)
- 800k travel and going out (just a guess to make a nice #)
- 5 mil girlfriend (said splitting up cost him 4-5mil net)
- 20 mil Real Estate venture (bad timing man)
- 5 mil investor fraud (guys serving time in jail for ripping him off)
- 2 mil Jewelry (said he had a weakness for jewelry)
- 2 mil houses for himself

- - -
$16 mil left to blow

The investment thing makes sense, lose a huge chunk all at once. Otherwise, it is hard to really blow that kind of money. The jewelry, houses, and to a lesser extent the cars should have significant residual value. But certainly if he blew more gambling, or once could significantly increase any of the numbers above (buying a $5mil house in Miami isn't too difficult).

But still. Damn.

I heard a former Tulsa player who spent a few years in the NFL talk about money at a finance lecture one time. He said he was lucky to never make the kind of money that put pressure on him to run with the big boys. Never scored a huge contract, but never bought a fancy car, lived in reasonable apartments, and since his NFL career kept him traveling and busy he didn't have much of a chance to blow his money. So when he fizzled out of the league he had a nice nest egg that he saw as a head start - bought a house, a nice car, and started a career well ahead of the game having never made much more than league minimum.

1 in 6 NFL players go bankrupt. A new study shows that career earnings have little correlation to the probability of bankruptcy. People that are bad with $25,000 a year are bad with $25,000,000 a year.

(04-07-2016 08:13 AM)Noise Penalty Wrote:  "I created a very expensive lifestyle. That's how you lose your wealth real bad at the beginning"

It starts here and continues downhill. It is very easy to do. It also sounds like this guy got talked into putting his assets into backing a real estate company. Lots of people got burned in 2007-2008. He was a guarantor of the loans and the banks got theirs.

Many of these guys have no understanding of money and when they get it they spend it. Live the high life. They don't understand that just some simple discipline early on can secure a comfortable lifestyle but cannot secure an extravagant lifestyle.

I say again, you live basically as you did before you got the money and if you were impoverished, then upper middle class.

That's easier said than done when you never had any money and don't understand the concept of it and "upper middle class" life might as well be living like a Rockefeller compared to how you grew up living. That said, you should know the good times may not last forever.

(04-07-2016 08:21 AM)Noise Penalty Wrote:  The issue is what does it mean to be "set for life" You can't live in Vegas casinos, gamble your ass off, and make it rain in the club every weekend, keep your entourage and maintain that lifestyle unless you have the income. You can however have a very nice house on the ocean, not have to work, play golf, eat out every night and send your kids to college. Those are two different ways of being "set for life". for many of these guys by the time they realize this their career is over and the earnings stop.

You play during the season and earn your extraordinary salary. During the offseason, you either work a regular job (which may well prepare you for a life after sports) or find some side income like making appearances or doing promos and all the while just living life like an average person more or less. That can even include hanging out with fellas, going to Vegas or making it rain occasionally, the issue is doing that every night or even a few times a week(end).

Compare Shaq and Antoine Walker.

And remember people like Curt Schilling, who was hardly some naïve hoodrat looking to hang out with rappers, sleep with supermodels and live the life. He blew his wad and is inconceivably in the red due to bad investments, especially one particularly bad investment. Meanwhile, some who were looking to just live the life are doing fine. There's no secret recipe.

Their is a secret recipe and it works for everyone:

1. pay yourself first. Make your future a monthly expense that has to be paid on the 1st of the month, every month, as long as you work.

2. Take the time to understand money, make it your favorite hobby. You can have other people manage your funds, but you have to understand what they are doing because it is your responsibility to manage them. Meet with them every month, at a minimum, and have them explain any changes in balances, investment performance, and expectations for the coming month. Having money is like having an extra job.

3. Have a firm understanding of the difference between income and wealth. Wealth is derived based on income minus expenses. A guy who makes $20MM a year is no more wealthy than a a guy making $20k if each spends 100% of their after tax income. The first guy is just having a lot more fun.

What'd you do, read Rich Dad, Poor Dad?

And besides, again I highlight, you're dealing with many people who have never had much money, certainly not to the level they will make in the pros. Easier said than done trying get them to grasp that.

(04-06-2016 11:28 AM)SuperFlyBCat Wrote:  

(04-06-2016 10:58 AM)MemphisTigerFreak Wrote:  I thought this was gonna be a Donald Trump thread.

Why? His net worth is valued in the Billions?

According to him, his publicized worth largely depends on how he is "feeling," which is probably why he won't release his actual worth.

http://www.newsweek.com/how-much-trump-w...els-384720

Dear Jesus... The Donald comes up again. Think what you will of him politically, but STOP saying he is a good business man or good with money. Handing a wad of cash to a monkey to invest has a decent chance of out performing the Donald.

He inherited $200-300,000,000 in the 1970s. In today's dollars, he may have inherited more than a billion dollars. He then invested that money himself, mostly in real estate because his dad started a real estate company and so the Donald had his dads connections in that market. He turned that $200-300mil into $3 Billion today (according to most sources, as pointed out above, the rest of this net worth comes from his "feeling" and valuing his name at billions of dollars). In a single day he gave different answers on his net worth to different people, varying by billions of dollars. Most recently he said $10 Billion.

Fine, he's worth $10 B.

Had he stuck the money in a passive index fund and stayed the hell out of the way he would have around $23 Billion. Clearly, an index fund tracks average. So the average investor would have more than doubled the return The Donald managed to make as a "business man."

The Donald had a lifetime of education on managing money and real estate, as well as an ivy league education. So he's a great business man because he inherited a world class amount of money and did worse than the majority of other investors. So if you want to say he's good with money, I need someone to explain what the metric is that supports that statement.

http://www.forbes.com/sites/forbesleader...a794a25506

http://www.marketwatch.com/story/how-don...2016-03-01

(04-08-2016 08:19 AM)JesseTU Wrote:  Dear Jesus... The Donald comes up again. Think what you will of him politically, but STOP saying he is a good business man or good with money. Handing a wad of cash to a monkey to invest has a decent chance of out performing the Donald.

He inherited $200-300,000,000 in the 1970s. In today's dollars, he may have inherited more than a billion dollars. He then invested that money himself, mostly in real estate because his dad started a real estate company and so the Donald had his dads connections in that market. He turned that $200-300mil into $3 Billion today (according to most sources, as pointed out above, the rest of this net worth comes from his "feeling" and valuing his name at billions of dollars). In a single day he gave different answers on his net worth to different people, varying by billions of dollars. Most recently he said $10 Billion.

Fine, he's worth $10 B.

Had he stuck the money in a passive index fund and stayed the hell out of the way he would have around $23 Billion. Clearly, an index fund tracks average. So the average investor would have more than doubled the return The Donald managed to make as a "business man."

The Donald had a lifetime of education on managing money and real estate, as well as an ivy league education. So he's a great business man because he inherited a world class amount of money and did worse than the majority of other investors. So if you want to say he's good with money, I need someone to explain what the metric is that supports that statement.

http://www.forbes.com/sites/forbesleader...a794a25506

http://www.marketwatch.com/story/how-don...2016-03-01

Why are we talking about billions of dollars when the OP talks about the $108 million AW blew? I suppose that if AW received a billion dollars he would've blown that as well.

Making wise decisions to maximize wealth is one thing but giving away tons of money on gambling and other dumb decision is another.

If AW would've done the safest investments possible with a small portion of his money he would've never been in that predicament.

Even today with the fed borrowing rate near zero and interest rates and stock markets struggling in the last year or so, it's easy to find investments of over 2% for a modest return on your money.

My retirement account safely returns over 2% with zero risk (unless a total collapse/depression of the US economy). When the economy is good it will return about 5%. It's not that hard to believe that AW couldn't have done something as easy as this.

(04-07-2016 08:45 AM)JesseTU Wrote:  Lets do some guessing...

$108 mil
Taxes - 48mi (highest tax bracket, poor planning, municipal, sales, etc.)
- - - -
$60mil to spend
- 3 mil gambling (he lost $800k in one six week period, so this is probably low)
- 3 mil friends and family (bought his mom a $350k house in year one)
- 3 mil cars (top of the line BMW, Bentleys, Maybach, etc. Traded out most years)
- 200k clothes (never wore the same designer suit stwice)
- 800k travel and going out (just a guess to make a nice #)
- 5 mil girlfriend (said splitting up cost him 4-5mil net)
- 20 mil Real Estate venture (bad timing man)
- 5 mil investor fraud (guys serving time in jail for ripping him off)
- 2 mil Jewelry (said he had a weakness for jewelry)
- 2 mil houses for himself

- - -
$16 mil left to blow

The investment thing makes sense, lose a huge chunk all at once. Otherwise, it is hard to really blow that kind of money. The jewelry, houses, and to a lesser extent the cars should have significant residual value. But certainly if he blew more gambling, or once could significantly increase any of the numbers above (buying a $5mil house in Miami isn't too difficult).

But still. Damn.

I heard a former Tulsa player who spent a few years in the NFL talk about money at a finance lecture one time. He said he was lucky to never make the kind of money that put pressure on him to run with the big boys. Never scored a huge contract, but never bought a fancy car, lived in reasonable apartments, and since his NFL career kept him traveling and busy he didn't have much of a chance to blow his money. So when he fizzled out of the league he had a nice nest egg that he saw as a head start - bought a house, a nice car, and started a career well ahead of the game having never made much more than league minimum.

1 in 6 NFL players go bankrupt. A new study shows that career earnings have little correlation to the probability of bankruptcy. People that are bad with $25,000 a year are bad with $25,000,000 a year.

don't forget the agent gets 4% of the contract and 15-20% of endorsements. So take another 5-6 million. Then lawyers another 2-3 million.