by Evan K
A shocking fact about NBA players is that according to Sports Illustrated, 60% of all retired NBA players go bankrupt in the first 5 years of their retirement. This is a shocking statistic because they make so much money during their careers but they end up losing it all in the first few years after retirement. The main things that contribute to the players losing all of their money are they don’t have enough financial literacy, don’t invest, and spend their money recklessly. This all points to that if NBA players were financially educated then they would be able to prosper with their wealth and create it into generational wealth.
In an average career, an NBA player will earn 24.7 million dollars. This seems like an amount of money that would last anyone a lifetime. This wasn’t the case for Antoine Walker. Antoine Walker had a 12 year NBA career and won 1 championship in 2006 and accumulated over 108 million dollars over his career. He made poor investment decisions and purchased a lot of excessive items with his wealth. Five years later after his retirement, he started to work at a Starbucks after he blew through all of his money that he made in his career. This might be mind-boggling but the fact that the average NBA player spends 42,500 dollars a month it might not be that surprising how a player could lose his entire wealth in the span of a few years.
An example of a player who was smart with their money is Chris Paul. Over his career, he has so far made 260 million dollars and has made safe and good investments that have allowed him to prosper with his wealth. With his investments and brand deals, he is most likely going to be able to grow that wealth into double or triple the amount that it is now just by doing safe investments and not spending too much on things that aren’t needed. He is very smart with his money and is financially literate which allows him to make smart decisions about investments and other deals to expand his money.
In conclusion, if all NBA players were given the tools by the NBA or other agencies to be able to learn more about investing and investing in smart things then the 60% of bankrupt players after 5 years of retirement would be a lot less than before. Another thing is that this is the best time for those players to be able to do this because and also be able to grow their internet following so that they can allow for money opportunities later in their lives. They can also hire professional financial advisors to be able to help manage their money which will allow them to be able to grow their money for the future. Overall, If NBA players were to learn more about investing and the opportunities that it can produce then not as many players would be spending all of their money in just the first few years after retirement.
Works Cited
Dougherty, Jack. “Chris Paul Is Already the 5th-Richest NBA Player of All Time - Sportscasting: Pure Sports.” Sportscasting, 1 Sept. 2020, www.sportscasting.com/chris-paul-is-already-the-5th-richest-nba-player-of-all-time/.
Gaines, Cork. “CHART: The Average NBA Player Will Make A Lot More In His Career Than The Other Major Sports.” Business Insider, Business Insider, 10 Oct. 2013, www.businessinsider.com/chart-the-average-nba-player-will-make-lot-more-in-his-career-than-the-other-major-sports-2013-10.
“US Top News and Analysis.” CNBC, CNBC, 6 Apr. 2021, www.cnbc.com/.
“The Average NBA Player Spends as Much per Month as Most People Make in a Year.” Clark Howard, 22 Mar. 2017, clark.com/personal-finance-credit/what-the-average-nba-player-spends-in-a-month/#:~:text=So where did they spend,selection of Tall & Extended sizes.
A problem most of these players in the NBA have is just not being financially literate while in the league. In their defense they don't really have the time either, they play basketball 24/7 and they don't have the time to learn stuff when they are recovering. They are making sure their bodies are healthy. They also give back to their families and home right as they get in the league. I have seen many former professional athletes that host TV shows or are in television and this way they can brand themselves and still make money. Like Chad Ochocinco, former WR of the bengals, he started a podcast/show with himself and brandon marshall.
ReplyDeleteI found it very surprising just how many NBA players go broke after retirement. It seems like with the amount of money you earn in the NBA, you should be able to last at least a few years even with a very lavish lifestyle. This really shows the importance of personal finance. I agree that the NBA should do something to make sure that these retired players know more about managing money. I agree that they could hire everyone professional financial advisors. Another thing they could do is put out an NBA player budget which would help NBA players better budget their money so they don’t spend it all in the first few years after retirement.
ReplyDeleteI think that it is very tragic what is happening to these NBA players due to their lack of financial knowledge. I agree that we should take measures to better educate these athletes. Hopefully the players in the future will learn how to live well and frugally.
ReplyDeleteThis is so crazy that something like this can happen when you are giving millions and millions of dollars like most NBA players are. I was very surprised when you said that 60% of them go bankrupt, I would've thought a more realistic number would have been around 10%, but when you really think about it, that's insane that over half of the players go bankrupt once they retire from the NBA, this just proves more and more why people have to be more financially literate. Great blog post!
ReplyDeleteI sort of expected the ways in which many NBA players lose all of their money and sometimes assets post-retirement. With the amount of money you earn accumulated over time in that field with no other investments or anything, the funds will only supply a wealthy lifestyle for so long. I as well feel that NBA players should learn more about personal finance before they retire. I feel at a young age this would be beneficial to learn. Professional advisors would be almost perfect in this situation...
ReplyDeleteI found this blog super interesting because I love the NBA. I’ve always recognized that these players make a lot of money, but was unsure of the finances behind it. I was intrigued to read about Antoine Walker’s scandal and I think that was a great example of what not to do with your fast growing income. Following up with how Chris Paul finances was impactful and smart too. Good job!!
ReplyDeleteIt's amazing how fast money can go to someone's head. I've heard stories like this before. Similar to that of winning the lottery, people go too big too fast. I guess that's why self made millionaires usually don't go bankrupt in their retirement, as they know how to work money well at that point in their lives, instead of obtaining millions in one day.
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