Re: Why do so many NFL players go bankrupt?
 

Schneed, have you never done anything dumb in your life?

Re: Why do so many NFL players go bankrupt?
 

[quote=irish;698070]They are not mutually exclusive, one need look no further than the 2008 economic meltdown to see that intelligent people will do foolish & risky things with money.

Pissing away millions is stupid but intelligent people do stupid things all the time.[/quote]

The folks you speak of, the ones who got crunched by the economic meltdown, were largely the ones who speculated on the real estate market. Perhaps they were flipping houses, or buying places to rent them out, etc.

They made a couple big mistakes which, when combined, I would classify as stupid:

- They assumed real estate prices would continue to go up, even though they had already gone up way more than historical norms.

- They went into huge amounts of debt to finance it, leaving themselves on the hook for large sums of money in the event real estate prices actually came down.

You don't bet a lot to win a little. These people were taking out $400K loans on these houses and trying to sell them for an $80K profit. If you can't assess the risk inherent in that, you're a moron.

Others got hammered by economic events beyond their control. I feel sorry for those folks, but not the morons I mentioned above.

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;698076]Thereby proving themselves to be no longer considered intelligent.[/quote]

It sounds like to you anyone who ever made a mistake can no longer be considered inteligent so to you must no intelligent people in the world.

Re: Why do so many NFL players go bankrupt?
 

[quote=irish;698070]They are not mutually exclusive, one need look no further than the 2008 economic meltdown to see that intelligent people will do foolish & risky things with money.

Pissing away millions is stupid but intelligent people do stupid things all the time.[/quote]

Which proves there is such thing as an educated fool. A fool and his money will soon part ways. You're right! Some people will do any and/everything for money, then not know what to do with it after they get it.

Re: Why do so many NFL players go bankrupt?
 

[quote=SmootSmack;698079]Schneed, have you never done anything dumb in your life?[/quote]

Sure, but nothing that results in such drastic consequences.

The thing that makes these athletes so dumb is the consequence of their actions. They have the chance to set themselves up for life, to have the financial freedom to work in just about any field they want without worrying about money like the rest of us. But they give that all away with careless handling of their assets. It's a huge mistake.

Now, is it the worst thing in the world to return to a life where you need to get a job to support yourself? No, that's the life I'm living now, and I'm happy.

But think about where they could be. That's what's so dumb.

Re: Why do so many NFL players go bankrupt?
 

[quote=irish;698082]It sounds like to you anyone who ever made a mistake can no longer be considered inteligent so to you must no intelligent people in the world.[/quote]

Everyone makes mistakes, but not everyone makes mistakes as big as this.

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;698081]The folks you speak of, the ones who got crunched by the economic meltdown, were largely the ones who speculated on the real estate market. Perhaps they were flipping houses, or buying places to rent them out, etc.

They made a couple big mistakes which, when combined, I would classify as stupid:

- They assumed real estate prices would continue to go up, even though they had already gone up way more than historical norms.

- They went into huge amounts of debt to finance it, leaving themselves on the hook for large sums of money in the event real estate prices actually came down.

You don't bet a lot to win a little. These people were taking out $400K loans on these houses and trying to sell them for an $80K profit. If you can't assess the risk inherent in that, you're a moron.

Others got hammered by economic events beyond their control. I feel sorry for those folks, but not the morons I mentioned above.[/quote]

They did assess the risk, in fact being risk averse was priority but the models they used to assess their risk was flawed. Hindsight is always 20/20. It seems stupid now that we know the end result.

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;698088]Everyone makes mistakes, but not everyone makes mistakes as big as this.[/quote]

Whats the size of the mistake have to do with stupid & intelligent?

Re: Why do so many NFL players go bankrupt?
 

[quote=irish;698090]Whats the size of the mistake have to do with stupid & intelligent?[/quote]

Everything. The results of this particular mistake forever changed the course of their life. A smart person has the sense to assess the potential consequences of their actions. A dumb person throws caution to the wind and goes through life without ever stopping to think what could come of it.

Re: Why do so many NFL players go bankrupt?
 

I agree with irish (there I said it)

Re: Why do so many NFL players go bankrupt?
 

[quote=irish;698089]They did assess the risk, in fact being risk averse was priority but the models they used to assess their risk was flawed. Hindsight is always 20/20. It seems stupid now that we know the end result.[/quote]

The flaw in the financial models was the assumption that real estate prices would continue to go up. Fail.

Re: Why do so many NFL players go bankrupt?
 

[quote=SmootSmack;698093]I agree with irish (there I said it)[/quote]

Which part? Because I'm baffled.

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;698092]Everything. The results of this particular mistake forever changed the course of their life. A smart person has the sense to assess the potential consequences of their actions. A dumb person throws caution to the wind and goes through life without ever stopping to think what could come of it.[/quote]

I don't think these people are necessarily throwing caution to the wind here. They may actually believe that they're being smart by investing money into a business (let's say a car dealership) than using it to buy a yacht.

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;698095]Which part? Because I'm baffled.[/quote]

You can be intelligent and make dumb mistakes, even big dumb mistakes.

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;698081]The folks you speak of, the ones who got crunched by the economic meltdown, were largely the ones who speculated on the real estate market. Perhaps they were flipping houses, or buying places to rent them out, etc.

They made a couple big mistakes which, when combined, I would classify as stupid:

- They assumed real estate prices would continue to go up, even though they had already gone up way more than historical norms.

- They went into huge amounts of debt to finance it, leaving themselves on the hook for large sums of money in the event real estate prices actually came down.

You don't bet a lot to win a little. These people were taking out $400K loans on these houses and trying to sell them for an $80K profit. [B]If you can't assess the risk inherent in that, you're a moron.[/B]

Others got hammered by economic events beyond their control. I feel sorry for those folks, but not the morons I mentioned above.[/quote]

First off, I think you're talking about individual investors in the real estate market. Sure, some of them took a serious beating, but countless others have inventory that they are holding onto & waiting for the market to appreciate it, i.e. good long-term investing. The people you speak of are part of the financial crisis, but the biigger problem were mortgage backed securities on wall st.

Your example of risk assessment is pretty much calling thousands of successful developers & real estate investors a "moron." (btw, $80K profit is really good for a $400,000 investment, that's 20%)

Capitalism requires risks. If no one took the risks you speak of, there wouldn't be much entrepreunership in the US, and in turn we'd have a lot fewer goods & services.

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;697947]Let's not sugarcoat it, you don't need an MBA, CFP, or read any financial self-help books to manage your money. You simply need basic arithmetic.

I have X amount of money. I spend Y per month. It will take me X divided by Y number of months before I run out of money. That simple.

The bottom line is these guys aren't thinking, at all. They simply WANT things. Want want want, with no regard to "should I".[/quote]

A lot of what you say is true. People buys multiple cars, houses and so on. But we can look no further than our own Joe Gibbs to see that it can hapopen to anyone. I read Joe's first book and couldn't believe some of the bad investments he made. He created quite a mess for him and his family.

Re: Why do so many NFL players go bankrupt?
 

[quote=SmootSmack;698098]You can be intelligent and make dumb mistakes, even big dumb mistakes.[/quote]

OK we'll have to agree to disagree on that one. I like to think the term "intelligent" is relative, not everyone can be considered so.

Re: Why do so many NFL players go bankrupt?
 

[quote=freddyg12;698099]First off, I think you're talking about individual investors in the real estate market. Sure, some of them took a serious beating, but countless others have inventory that they are holding onto & waiting for the market to appreciate it, i.e. good long-term investing. The people you speak of are part of the financial crisis, but the biigger problem were mortgage backed securities on wall st.

Your example of risk assessment is pretty much calling thousands of successful developers & real estate investors a "moron." (btw, $80K profit is really good for a $400,000 investment, that's 20%)

Capitalism requires risks. If no one took the risks you speak of, there wouldn't be much entrepreunership in the US, and in turn we'd have a lot fewer goods & services.[/quote]

We're getting off-base here because we're starting to talk economy, but I can't let these statements go without addressing them.

The mortgage backed securities were essentially the same thing. They created investments which were insanely leveraged, and were dependent upon the continued growth in real estate prices in order to support the fundamentals. As soon as the prices dropped, you had an asset that couldn't be unloaded, and you were stuck riding it down.

A 20% profit would be nice if you had a debt to equity ratio of about 1.0. But taking out a $400K loan when you only have $50 - $100K in the bank is foolish because of the risk you face. You have to liquidate all of your personal assets just to cover the cost of ownership. Not intelligent assessment of business risk.

There's calculated risk, and then there's foolish risk. Nobody advises anybody to put 100% of their savings in one stock, it's a big risk but that doesn't make it a wise one. A smart risk might be flipping houses to the extent you have cash to cover the cost of the investment. Or a smart risk might be to put your money in a [B]diversified[/B] set of aggressive investments. But leveraging yourself beyond your ability to cover the debt is never smart, it's business 101.

Re: Why do so many NFL players go bankrupt?
 

[quote=skinsfan69;698100]A lot of what you say is true. People buys multiple cars, houses and so on. But we can look no further than our own Joe Gibbs to see that it can hapopen to anyone. I read Joe's first book and couldn't believe some of the bad investments he made. He created quite a mess for him and his family.[/quote]

Fair point, and proves that you can be considered an intelligent person yet make big mistakes. But I only consider Gibbs intelligent because he's made so many smart moves and done so many smart things. His huge number of smart moves and decisions outweigh the big mistake.

After all he found a way to make the money back and then some. He followed a big mistake with smarter investments and smarter choices.

But man, you've got to do a lot of impressive things to recoup your reputation after doing something like these athletes are doing.

Re: Why do so many NFL players go bankrupt?
 

Bottom line. S10 has financial training, they don't. They dumb, he smart.

Re: Why do so many NFL players go bankrupt?
 

Hey,you can only "make it rain" for so long.

I saw an article that showed the Boat --floating house--that Big Al bought after he signed his deal last yr. Not to mention most of these guys have houses so big that they could have another family living with them and never know it.

Re: Why do so many NFL players go bankrupt?
 

The majority are from a poor backgrounds and were never taught how to save or manage their money.

Re: Why do so many NFL players go bankrupt?
 

IMO if you blow through 40+ million you should have your @$$ whipped.
:spank:

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;698023]No, no. It's not at all. I have $100 million in the bank, I'll put it in safe investments. It earns 3%, so I make $3 million a year. I can spend $3 million a year and not lose any of my $100 million.

$3 million annually amounts to $250,000 monthly. I can have three big mortgage payments on three big homes throughout the country. I can buy a car each month. I can eat out whenever I want to. It's not hard to budget for that at all.

What's not easy is coming into $100 million. Every single intelligent person on this message board would handle $100 million A LOT better than these moron athletes.[/quote]

This is the same example i gave my friends & family that you can live off interest and not touch your initial money. I come from poverty still in poverty somewhat actually and i grew up and embraced the hip hop culture myself. By no means, would i blow the amount of money these guys blew. I was broke as a child but if i came up and earned, inherited multimillions of dollars my first thing to do is what can i do to NEVER BE BROKE AGAIN. To me that is common sense but we all know everybody doesn't have that.

Re: Why do so many NFL players go bankrupt?
 

[quote=Redskin Warrior;698121]This is the same example i gave my friends & family that you can live off interest and not touch your initial money. I come from poverty still in poverty somewhat actually and i grew up and embraced the hip hop culture myself. By no means, would i blow the amount of money these guys blew. I was broke as a child but if i came up and earned, inherited multimillions of dollars my first thing to do is what can i do to NEVER BE BROKE AGAIN. To me that is common sense but we all know everybody doesn't have that.[/quote]

Exactly. I'd think those who come from a low-income background would appreciate money a bit more when they do get their hands on it.

Re: Why do so many NFL players go bankrupt?
 

I can understand Schneed's point. Some, not all, of these guys just blew their money without any intelligent thought whatsoever. If I blew millions of dollars I'd feel like a complete dumbass.

Re: Why do so many NFL players go bankrupt?
 

[quote=53Fan;698138]I can understand Schneed's point. Some, not all, of these guys just blew their money without any intelligent thought whatsoever. If I blew millions of dollars I'd feel like a complete dumbass.[/quote]

And I would enjoy doing it!!!

See, this is why your idea of comparative research makes a lot of sense. We both get 2Mill, and then the Warpath can gauge how well we do over the next 5 years.

:food-smil

Re: Why do so many NFL players go bankrupt?
 

[quote=SmootSmack;698098]You can be intelligent and make dumb mistakes, even big dumb mistakes.[/quote]

Agreed. I've made big and little dumb mistakes in life, and I'm educated and consider myself pretty intelligent. It's not the fact that you made the mistake that makes you unintelligent, it's whether or not you learn from it.

If these guys invest in one business that fails, then they go buy 5 houses, then invest in another business that fails, then trust an attorney who swindles them, then they go buy 3 cars, then trust a money manager who swindles them... Well, then they're pretty stupid.

The mistake itself doesn't necessarily make one stupid. Repeating that mistake over and over again however, well that's another story.

Re: Why do so many NFL players go bankrupt?
 

[quote=GMScud;697935]Me too. It's just young, dumb, and stupid. They have so many enablers and yes men around them, and that doesn't help. Having the best jewelry, hottest cars, and biggest houses is actually pretty much the dumbest way to represent your wealth. Don't get me wrong, if I was making millions a year I would have nice clothes, a nice car or two, and probably more than one house. But I wouldn't be ridiculous about it. These guys have no clue how to live within their means, despite their means being incredibly extensive compared to the rest of the world.

I believe all 4 major US sports have financial counseling available, too. I guess most of these guys didn't hear that memo because the sound system in their $250,000 car was playing too loudly.[/quote]

Not to mention they have so many clinging friends and family members.

Re: Why do so many NFL players go bankrupt?
 

[quote=GMScud;697956]

Also, a lot of these guys who end up broke genuinely thought they were doing the right thing by investing and diversifying, only to be taken advantage of by attorneys, agents, representatives, etc who fed them BS promises of high returns only to milk them for every cent. Gotta surround yourself with the right people.
[/quote]
Very true.

Re: Why do so many NFL players go bankrupt?
 

You know how when you break a 100 dollar bill it fades away quickly? Lunch here.. socks and underwear there, dinner, whatever.. all of a sudden you're left with 10 bucks and nothing significant? They just do it on a much bigger scale.

Re: Why do so many NFL players go bankrupt?
 

[quote=CRedskinsRule;698143]And I would enjoy doing it!!!

See, this is why your idea of comparative research makes a lot of sense. We both get 2Mill, and then the Warpath can gauge how well we do over the next 5 years.

:food-smil[/quote]

I'm all for it!

GMScud makes a good point, learning from your mistakes shows intelligence. Unfortunately these guys will probably never be able to regain their level of monetary value once their careers have ended. They were fortunate enough to have been involved in an enterprise that pays extremely well that is now over for them. Let's be honest, not many of them are capable of making that kind of money any other way.

Re: Why do so many NFL players go bankrupt?
 

[quote=Schneed10;698023]No, no. It's not at all. I have $100 million in the bank, I'll put it in safe investments. It earns 3%, so I make $3 million a year. I can spend $3 million a year and not lose any of my $100 million.

$3 million annually amounts to $250,000 monthly. I can have three big mortgage payments on three big homes throughout the country. I can buy a car each month. I can eat out whenever I want to. It's not hard to budget for that at all.

What's not easy is coming into $100 million. Every single intelligent person on this message board would handle $100 million A LOT better than these moron athletes.[/quote]


You better be prepared to live off less than that chief. Uncle Sam and the state want their cut, which of $3,000,000 assuming you are using interest or dividends, not selling equity is taxed at standard income rates, so there goes 35%, plus SSI, plus state tax, so there is 50% out the door up front.

Oh yeah, did you have that money with an wealth management firm like a Schwab or Jones or Edelman, whoops, there goes another 1-2% in asset management fees, plus the fees from the mutual fund managers where your money is actually invested, which is another 1% minimum.

Wow, your 3% return just turned into a loss, all for a measly $1.5M in net cash flow.

Is it any wonder "rich" people don't put their money in MMA's or CD's. There is no return, which is why most people of "significant" wealth, have personal investment advisors/staff to carefully invest in both securities and equity projects. Holding on to wealth is not as easy as it sounds.

I would be willing to bet if you took a random sampling of 1000 Americans, pulled them off the street and handed them a check for $100M; 75% would be broke in 10 years or less. Most people simply are not prepared to handle that kind of money.

Re: Why do so many NFL players go bankrupt?
 

[quote=Mc2guy;698172]You better be prepared to live off less than that chief. Uncle Sam and the state want their cut, which of $3,000,000 assuming you are using interest or dividends, not selling equity is taxed at standard income rates, so there goes 35%, plus SSI, plus state tax, so there is 50% out the door up front.

Oh yeah, did you have that money with an wealth management firm like a Schwab or Jones or Edelman, whoops, there goes another 1-2% in asset management fees, plus the fees from the mutual fund managers where your money is actually invested, which is another 1% minimum.

Wow, your 3% return just turned into a loss, all for a measly $1.5M in net cash flow.

Is it any wonder "rich" people don't put their money in MMA's or CD's. There is no return, which is why most people of "significant" wealth, have personal investment advisors/staff to carefully invest in both securities and equity projects. Holding on to wealth is not as easy as it sounds.

I would be willing to bet if you took a random sampling of 1000 Americans, pulled them off the street and handed them a check for $100M; 75% would be broke in 10 years or less. [B]Most people simply are not prepared to handle that kind of money.[/B][/quote]

Investment ROIs on funds like money market or bonds are typically net of fees. And I was assuming gross income of $3 million, which even after taxes can support 3 houses and cars galore.

22% of America still approved of George Bush, even at his lowest approval point. There's a significant % who don't graduate from high school. I think it's fair to say a big portion of Americans aren't very intelligent.

I don't know about your 75% number, but I get your point. It's an indictment on the intelligence of the general populace more than anything.

If you piss through $100M in 10 years or less, I'm sorry, you ain't smart.

Re: Why do so many NFL players go bankrupt?
 

1) Eight baby's mummas

2) Cocaine

3) Booze

4) Gambling

5) Spinning rims on their toaster ovens

6) Just being stupid.

I think that about narrows it down. Actually, you can probably roll them all up into just being stupid.

Re: Why do so many NFL players go bankrupt?
 

it was just toasters.. if you're referring to the chris rock joke

Re: Why do so many NFL players go bankrupt?
 

most atheletes don't know where their money is, let alone know what its doing because they don't understand money. The investment advisors they use are hired by the agents or are the agents themselves. So it is already a conflict of interest. They look to trust "exesperts" to make their money grow but end up being sold a bad business deal. Losing it all from embezzlement, and end up in tax trouble because the people they trust as accountants don't file their stuff correctly.

Did you know that there are companies that make it their business to sell business deals to atheletes and lottory winners. There is a lot of corruption and theft that occurs to people who come into fast money because they trust the wrong people.
I used to be in the banking industry and there were some prominent players who kept hundreds of thousands of dollars in checking accounts. The bank is making millions off of them because noone would tell them that it would make more money in interest baring account.

Ignorance is very costly in that world.

Re: Why do so many NFL players go bankrupt?
 

[quote=diehardskin2982;698189]most[B] atheletes[/B] don't know where their money is, let alone know what its doing because they don't understand money. The investment advisors they use are hired by the agents or are the agents themselves. So it is already a conflict of interest. They look to trust "[B]exesperts[/B]" to make their money grow but end up being sold a bad business deal. Losing it all from embezzlement, and end up in tax trouble because the people they trust as accountants don't file their stuff correctly.

Did you know that there are companies that make it their business to sell business deals to [B]atheletes[/B] and [B]lottory[/B] winners. There is a lot of corruption and theft that occurs to people who come into fast money because they trust the wrong people.
I used to be in the banking industry and there were some prominent players who kept hundreds of thousands of dollars in checking accounts. The bank is making millions off of them because noone would tell them that it would make more money in interest[B] baring [/B]account.

Ignorance is very costly in that world.[/quote]

firstdown hijacking accounts itt

Re: Why do so many NFL players go bankrupt?
 

[quote=GMScud;697941]There are some guys on that top 25 list that I had no idea pissed away their riches-
Deuce McAllister
Bjorn Borg
Scottie Pippen
Muhsin Muhammed[/quote]

Antoine Walker is broke after making well over 100 M in his career.

Re: Why do so many NFL players go bankrupt?
 

^ Lol sorry tryfuhl, juggling a few things at work and I’m not the best speller.