How have some professional athletes successfully managed their money?

SOURCE: www.uproxx.com

You usually read articles or hear about professional athletes going broke and wonder how it happened when they have all that money. In articles from U.S. News, Forbes, Blavity, and A Wealth Of Common Sense, what goes into managing this exuberant amount of money is explained. The truth is that most athletes go broke because they can’t manage their money effectively, this can be prevented by setting a monthly budget or putting the money into a savings account.

Many professional athletes go bankrupt very quickly due to them blowing their money or being taken advantage of, not knowing that their money won’t be their forever. According to an Forbes article,“According to a joint study conducted by researchers from three separate universities (h/t CNBC), ‘Nearly 16 percent of NFL players drafted between 1996 and 2003 declared bankruptcy within 12 years of retirement.’ That translates to roughly one in every six players, meaning that on any given 53-man roster, perhaps as many as nine of those players (or maybe even more) wound up declaring bankruptcy not all that long after their playing days were finished.” This is a pretty bad statistic to have as an professional athlete who once had millions. Perhaps they didn’t know how to manage their money. In an Blavity article,”Some are taught the skills and others need to learn them. While the media loves documenting stories on athletes that have lost their fortunes, the reality is that there is a large group of athletes that manage their money much better than we think. Perhaps because they were forced to learn, or because they can feel the pressure and responsibility of making the money earned in their playing careers last their entire lives – you’d have to ask them.” Some athletes never learned and ended up bankrupt in the end.

Of course there is that group of athletes that do successfully save their money, such as L.J. Smith, Rob Gronkowski and Michael Carter-Williams. In an article from U.S. News they explain how he saves money,“For Smith, identifying how much he can afford to draw from his accounts each month, and spending within that amount, helps prevent him from blowing through his nest egg.” By basically setting a monthly budget, he saves a good amount of money that some other athletes probably wouldn’t have. Rob Gronkowski, a star on the New England Patriots was recorded in an Forbes article saying,“To this day, I still haven’t touched one dime of my signing bonus or NFL contract money. I live off my marketing money and haven’t blown it on any big-money expensive cars, expensive jewelry or tattoos and still wear my favorite pair of jeans from high school… I don’t hurt anyone.” He seems to be laying low and just living like any other civilian despite having this large amount of money, which isn’t a bad idea at all.

Another example of athletes saving money is Michael Carter-Williams of the NBA, at the time of the article he was still a rookie. In the article from A Wealth Of Common Sense they state,“Michael Carter-Williams, a rookie with the Philadelphia 76ers, is being responsible with his money. His parents are setting up a trust so he can’t blow all of his earnings in the first few years.” Carter-Williams is starting to save his money early to ensure that his finances stay intact. Future and current professional athletes should take notes on what these three are doing, and maybe the percentages of athletes that go bankrupt will go down.