Stories of Warren Sapp's bankruptcy filing has been all
over the news lately. It's hard to imagine he'd find himself in such a
predicament. After all, he's a pro-bowler with at least $40 million in career
NFL earnings. He has a good job as a very entertaining television analyst which
has led to other money-making endeavors, such as Dancing with the Stars.
Unfortunately, Warren Sapp is just the most recent of a long line of NFL
players who have gone broke after their NFL career. According to a 2009 Sports
Illustrated article, 78 percent of NFL players go broke 3 years after their
playing careers end. Which is especially bad news because the average career of
an NFL players is only 3.5 years.
Why does it happen? First off, only a very few will ever make the same money
they made during their career. And while they are making the big bucks, they
get sucked into bad investments, pursued by freeloaders and an entourage
looking for handouts, and are barraged with bad advice from people they think
they can trust. Add to that, football has taken a big toll on their bodies so
medical problems start arising. Plus, they are young kids who suddenly have the
money of their dreams and what they've worked for years. Of course they'll want
to show-off a bit and live the life of movie stars.
So, to the NFL Class of 2012 (or to anyone else who has
suddenly come into large amounts of money), here's what to remember:
1) Plan for the Worst. Celebrate
now. You deserve it. But, your earning and your career depend on many things
all working together for a number of years, including your health, your skills,
the offense or defense your team runs, your coach, hungry rookies and free
agents in coming years, and countless other events that may be beyond your
control. Even in a short career, you may make more money than most Americans
make over their lifetimes. Spend some now, treat yourself but don't continue to
overspend. But plan to make the most of it rest last your life.
2) Your Agent Shouldn't Advise You on Your
Money. Agents should never be your source for financial advice.
It's not their expertise. They are great at what they do--negotiating your
deal. But, just as you don't want a DT kicking field goals, you need an outside
person to handle your money (preferably not a family member or a friend unless
that was their business before you signed your contract). Too many financial
disasters are the result of bad advice
from agents who get in over their heads.
3) No Private Investment or Real Estate
Deals. You are now a target of people looking for easy money,
These people are smooth talkers and put on a good show telling you about
guaranteed profits in real estate and investments. But, remember no one is
going to give you money just because of who you are or what team you play for-
they want your money. They'll use your money to pay themselves a good
commission and could care less whether the deal is real or one that will pay
off (if the deal was even real in the first place). Even when your friends come
to you with deals, be skeptical about who contacted them. Stay away from
private investment and real estate deals. Too many things can go wrong,
business deals are not your expertise-just ask John Elway (lost $3million to a hedge-fund manager who was
arrested on charges that he ran a Ponzi scheme), Mark Brunell (filed bankruptcy
after failed business ventures, including 12 Whataburger restaurants), or Deuce
McAllister (lost bigtime in car dealership.
4) USE PROTECTION. Child
Support payments continue until the child grows up. You're old enough now
to know that you are on the hook for an unplanned pregnancy, not matter what is
said in the heat of the moment. The major reason behind the financial
problems of Warren Sapp, Chris McAlister, Travis Henry and many others are the child
support payments. These payments are often valued at the height of a
playing career and can be $5000 to $10000 a month. And, guess what, you have to
keep making these payments for over 20 years. Warren Sapp is over $728,000
behind in child support payment and is required to pay about $75,000 a month.
Bankruptcy won't help him with those payments either.
5) It Can Happen to You. You've
been a star your whole life. You know deep inside that you will continue to be
a star and your career will continue until you're 40 so money will never be a
problem. I hope that's the case. Then, you won't have to worry. But, still,
don't you think that a little prior proper preparation is worthwhile-just in case.
articles about consumer debt by Ted Connolly, co-author of The Road Out of Debt
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