Why do so many NFL players go bankrupt?

[Kalisto2010]

Originally Posted by GusFrerotte

Saden1 has it right. I would also add that look at the culture, especially hip hop culture and those videos. These guys think that is what life is all about and blow it on mansions, Bentley's, etc, with no real skills in saving money or investing. Look at all those hair metal guys from the 80's that are the same way. Blew it all on partying, then the party ended after MTV killed off the hair band era.

How do you know it wasn't the country club culture that you see on TV everyday? People living up in the hills in their multi-million dollar homes, driving around in their bentleys, partying in the hamptons, buying yachts. See, if it wasn't for these aristocrats projecting these images to our impressionable youth, athletes wouldn't end up being broke trying to mimic them. See what I did there I can use a cultural bias to make my point too.

[SirClintonPortis]

Originally Posted by Schneed10

This is a great point, ignorant is a good word.

Despite my finance background, I'm even ignorant of the best way to manage $100M. Difference is, I'm smart enough to know that I need to learn more about it before I go giving any money to people.

Once again, you're being "smart" is simply being more knowledgeable and aware.

[tryfuhl]

Originally Posted by Giantone

No you're wrong.If you invested $1000 and I play football and invest 1,000,000 in the same thing and it goes bad ...you think I'm dumber then you or did I just have more money to invest?
Point, if I had 5 million and I go to a finacial counselor and he hooks me up with Emron ,AIG and Benie Madoff.........5 years ago ....I'm smart ,but after last 2 years I'm dumb according to you.

If an FA suggested Enron to you 5 years ago, not only would you be dumb, but so would he.

[Schneed10]

Originally Posted by SirClintonPortis

Once again, you're being "smart" is simply being more knowledgeable and aware.

Not really. Like I said way earlier in the thread, it's simple math. Most of these guys didn't lose money because they gave it to the wrong people. Most of them lost it because they just flat out spent it all.

I have X, I spend Y per month... it's easy to figure out how long until you'll run out of money.

[Mc2guy]

Originally Posted by Schneed10

Not really.

Hubris is the downfall of many a man. Keep thinking its all about how "smart" you are. Until you've walked in another man's shoes, it's all conjecture.

[Schneed10]

Originally Posted by Mc2guy

Hubris is the downfall of many a man. Keep thinking its all about how "smart" you are. Until you've walked in another man's shoes, it's all conjecture.

Can you explain to me why it takes knowledge, or intelligence, or whatever to protect yourself from spending all your money??

Because my 3 year old is capable of looking in her piggy bank and counting how many quarters she has, and whether she has enough to buy a Dora doll.

[mredskins]

Originally Posted by Schneed10

Can you explain to me why it takes knowledge, or intelligence, or whatever to protect yourself from spending all your money??

Because my 3 year old is capable of looking in her piggy bank and counting how many quarters she has, and whether she has enough to buy a Dora doll.

Is like crack cocaine to my two year old son. He loves her. He is just learning to talk and he knows more words in Spanish then English thanks to her.

[freddyg12]

Originally Posted by Schneed10

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 diversified set of aggressive investments. But leveraging yourself beyond your ability to cover the debt is never smart, it's business 101.

Sure, point taken. Risk is relative & many were too risky, which in turn hurt the market even for those that weren't very risky at all but simply wanted their properties to appreciate, sell their house, etc.

As for diversified portfolios, Michael Vick certainly was on the cutting edge in diversifying his!

[JoeRedskin]

Originally Posted by Mc2guy

Hubris is the downfall of many a man. Keep thinking its all about how "smart" you are. Until you've walked in another man's shoes, it's all conjecture.

I don't need to "walk in another man's shoes" to study and learn from his experiences. If that were true, then there would be no point to education.

I think the term ignorant is more appropriate here. Some of these guys are ignorant b/c they simply have never learned the value of education, some are ignorant b/c they come from a background that celebrates ignorance and some are ignorant b/c they choose to be so and listen to their yes men.

Lots of smart people can be ignorant. Happens everyday. Some are self aware enough to realize they are ignorant and then do something about it. Others, like coddled atheletes coming from a culture that permitted or encouraged them to feel entitled, not so much.

[SmootSmack]

Originally Posted by Schneed10

Can you explain to me why it takes knowledge, or intelligence, or whatever to protect yourself from spending all your money??

Because my 3 year old is capable of looking in her piggy bank and counting how many quarters she has, and whether she has enough to buy a Dora doll.

Well like I said before, a lot has to do with misplaced trust. Because maybe your 3 year old daughter can look in her piggy bank. But maybe your 3 year old says to your 2 year old son (assuming you have one) "Look, this isn't my area of expertise but this what you get paid to do for lots of people. So look after my piggy bank for me" And then...the money's gone because your daughter made the mistake of trusting your son. Your daughter's fault? Probably. But is that idiocy or ignorance, or is it one and the same? Confucious once say "Real knowledge is to know the extent of one's ignorance."

Additonally, I suspect this 78% must include a lot of Marcus Mason type players. Granted, Mason I'm sure has made a pretty penny in his brief cup of coffee with the league, still he's not a multi-millonaire. Is he?

[JoeRedskin]

Originally Posted by Schneed10

Can you explain to me why it takes knowledge, or intelligence, or whatever to protect yourself from spending all your money??

Because my 3 year old is capable of looking in her piggy bank and counting how many quarters she has, and whether she has enough to buy a Dora doll.

That just it - many of these athelets never had to "look into their piggy bank". Money, women, things, grades - all were just provided to the truly elite atheletes. They never had to say "hmmm, how will I afford/obtain/earn these things?"

Way back in the day, I took a night class at UM on Soviet Foreign relations in the late 20th century. I didn't realize it but it was apparently a jock class for the UM football team (Rick Badanjek was in my class). During tests, the teacher left the room. Guys just handed answers to each other. A couple laughed when I refused the answers (yes - they accused me of being ignorant). One guy, nice enough, a third string receiver was telling me how he had a real cushy job (shhh!), and how he was going to be the next great pro WR. (Did I mention he had a steel plate in his wrist and couldn't bend his hand fully?). These guys were being told they walked on water b/c of the atheletic ability and, as immature kids surrounded by people giving them things are want to do, believed in their entitlement.

That was over 20 years ago. I can only imagine how much worse it has gotten as more money and more fame are added to the mix. (Do you really think Ben Roeth's behavior is that much of an anomally in the world of sports? One name - Jeremy Stevens).

[JLee9718]

There are so many people who want to "join" the new and rich lifestyle they see tied to a player who gets a large bonus. The player can't say no to his old friends or any new ones who want to become part of his entourage. The money goes quickly if you're trying to live your life plus support these newfound friends.

[Trample the Elderly]

Originally Posted by tryfuhl

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

They spinnin! They spinnin!

[SirClintonPortis]

Originally Posted by Schneed10

Can you explain to me why it takes knowledge, or intelligence, or whatever to protect yourself from spending all your money??

Because my 3 year old is capable of looking in her piggy bank and counting how many quarters she has, and whether she has enough to buy a Dora doll.

Because humans rarely are perfectly rational in how they behave and thus what appears self-evident to some people does not necessarily make it the norm. The pheonomenon appears prevalent enough to warrant serious attention.
Hyperbolic discounting - Wikipedia, the free encyclopedia

Considering that people like to run up debt on their credit cards and the like, it's safe to say that there's at least some biological influence on why they keep spending even if they know they won't balance their budget. Woefully irrational, but that's exactly why "knowledge" is needed to keep said influences in check. Not everyone's a Leopold Mozart who knows how to manage their money well with little outside help. Some are more like Wolfgang and prefer gratification over disciplined spending.

[DBUCHANON101]

Originally Posted by Trample the Elderly

They spinnin! They spinnin!

Here ya go Shaq, go buy yourself a jumping car.....Bling Bling