Scottie Pippen lost $120 million, and Latrell Sprewell broke

[craig01]

That pic is gross.

[Mofoo]

It's sad how some people can squander away so much money, and not even have the common sense to save even a small fraction of it for emergency/retirement purposes. I mean if Pippen earned $120 million, couldn't he have just kept 20% as savings, and put into some mutual funds, or even some money market funds? Those are about as low-risk of an investment as you can go.

Tax aside, even if he were to completely blow the 80%, he'd still have 24 million earning him a decent amount of interest... Then he could live the rest of his life somewhat sparingly, like 1 million a year? And that's if he completely blows the other $96 million away. You don't need any financial manager to tell you that.

On a somewhat similar note, I saw a Tyson documentary recently, and he was talking about how he either had loads of money, or none. He was saying that he didn't know how, or just wasn't able to live in the middle. He would either be making tons of money, and then spending it all, or he'd have nothing. He also said that he won a "small amount" of money from a court case against Don King, when he was broke. That "small amount" of money was $20 million. Come on Mike, $20 million is small? Maybe in comparison to what he used to make, but to the other 98% of the world, that is not a "small amount".

There are some facts you guys keep ignoring.

-> Most of these athletes are not well educated, they are not necessarily good at numbers and financial matters.

-> the more money you have the more expensive your life becomes. These guys almost pay for each breath they take. From their clothes/foods to houses/cars they have massive expenses to cover their life style. Once they are used to expensive taste it is so hard to go back. It in fact apply to everybody, after making let say 100k annual for couple of years, who would go back to old days and spend like a student on low budget.

-> You can not realistically expect a guy to live on interest income after making millions. They are already close to 40 when they retire and they do not stack up money to buy a better gravestone. They will spend it as they want it.

-> There is not such thing as %100 secure investment. A venture capitalist who makes his fortune by utilizing money can know a trick or two but for a regular man like athletes, there is no such thing as secure investment unless they want to stick to low interest rates and eat home food watch TV during nights and they will not do that (as mentioned above)

-> I believe if the Nike deal was not successful, we could even hear MJ having financial troubles.

-> Also it is important to mention that, for instance if Pippen officially gathered 120m during his career we have to cut his tax, agent fees and other expenses. And obviously what ever left of it is not paid at once. He was getting it in almost 15 years duration so most likely big part of it was already gone even before he retired. Probably same can apply most of the other athletes.

-> Most athletes go through divorce, which costs. And not only the divorce itself costs but after divorce they probably spend a lot to entertain themselves for adjusting to new single life.

-> Also gambling seems to be a problem for some athletes. Gambling is one of the fastest way to lose money.


This being said, it still is a series of bad decisions by these guys BUT .. we can not judge them without understanding the facts behind the meltdown of their fortune.

[maxwellcu]

I think the kids and the divorces are what really end up costing these guys in the long run.

[JustAwesome]

If you've never made big money before, then you don't know just how much money changes you. Everyone likes to say that money won't change them, but the majority of the time, it does. It's human nature. It's something that's very hard to fight.

I once made a ton of money. Not millions like these guys, but it was more money that I needed to get by. Well, after a while, that money gets to you. You start doing things that you don't normally do. You start buying things that you normally would hesitate to do. Fortunately for me, I learned my lesson before hitting rock bottom.

If my relative small amount of money made me change like that, then I can't even imagine what millions of dollars is going to do to me. Wouldn't mind finding out, though.

[SuigintouEV]

I don't know if this is still true, but I remember Shaq saying that he has never spent one dime of the money he made in the NBA. All the money he spent was from other sources (mainly endorsements I assume).

yea i remember him saying he was gunna buy the orlando magic

[Esohny]

Oh my God, rock headed, uneducated athletes make terrible financial decisions!?

I was POSITIVE that their questionable choices were limited to drug use, carrying illegal weapons, and sleeping with gold diggers without protection.

[longfellow44]

You have to look at it as a whole because it is a massive problem from top to bottom that creates this situation.

1st look at the actual amount of the money that they player recieves after taxes agent fee's etc. The player is only going to bring home to put in the bank approximately 40% of the money he earns. The tax rate on income over 2million per year is roughly 45% then the agent fees come out to about 10% if your getting a good deal.
So that 10 million a year comes down to about 4.5 million bring home.

Then you need to look at the education level of the people spending the money and it tends to be overwhelmingly low. A lot of these guys get through High School and the years they spend in college largely do to their athletic ability and put relatively little emphasis on the actual Education side of things.

Finally you look at the young American culture that glorifies things like rims, and expensive jewlery and big houses(cribs) and cars. This is a major trend in all american culture but is even more important to the urban culture in most area's.

Truly each of these players needs to be set up with financial planners the moment the receive a contract offer that way they don't accidentally piss away their earnings. It's not like they will be able to make this type of money doing anything else when they finish with basketball because they likely aren't educated enough to get a job that pays that well.

[JordansBulls]

Oh my God, rock headed, uneducated athletes make terrible financial decisions!?

I was POSITIVE that their questionable choices were limited to drug use, carrying illegal weapons, and sleeping with gold diggers without protection.