I watched the ESPN TV program 30 for 30 entitled, “Broke”.
The show discusses what happens to a high percentage
of professional athletes who make millions of dollars during
their professional careers and then end up broke and bankrupt.
Let’s say you just signed a $25 million dollar contract. What would
you do with the money? Would you spend it as fast as you got
the money in your hands or would you be responsible with it
and have a plan to invest the money to secure your future.
Money can disappear rather quickly if not handled properly.
While watching the show, I found some common mistakes these
high profiled athletes made as they discussed their experiences
of hitting the big time. During the show, I jotted down the
mistakes they made and have listed them here for you to read:
1. Living outside their means: Out of control spending – buying cars,
homes, jewelry, and clothes.
2. Letting their ego get in the way by trying to keeping up
with the Joneses (the Joneses for them are other celebrities of the world).
They are just as competitive off the field as they were on the field.
3. Not able to say no to friends and family members that continuously
asked them for money to pay their bills.
4. Swinging for the fences with bad investments or business deals
without any type of plan in place.
5. Thinking their pro career was going to last for 15 years, and the money
was going to come in forever. No Smart Fund in place for unforeseen
circumstances like a career ending injury.
6. Blowing huge amounts of money in nightclubs to impress their
entourage and friends.
7. Gambling it away.
8. Having the mentality that more money means more problems.
9. Taking on big sums of debt.
10. Thinking that it is not sexy to invest in stocks, mutual funds or keep
money in the bank.
11. When running into financial distress, they looked for the home run
investment or business deal that would get their money back.
12. Letting bad managers or family members handle their money.
13. Lending money to others and never seeing it again.
14. Having the mindset that: “Ending up broke or bankrupt is not going
to happen to them.”
I figured these athletes all lived the good life; however, the good life
was only temporary. It is absolutely shocking to hear how someone
given a multi-million dollar contract could spend it so fast. What was even
more shocking was to listen to them discuss how the personal phone calls
from their free loading friends and family members stopped once they heard
there was no more money.
If they had the mindset and followed the steps of Money on Your Terms, the
majority of them would have been set for life. On my quest to coach and
educate people about money, I have learned that money is simple, people
handling it is what makes it difficult. Whether you make $35,000 or $1,000,000
a year, what is most important is how you handle it.
You can watch the episode of 30 for 30 “Broke” by typing in youtube:
30 for 30 broke.
To learn more about money listen to the Money on Your Terms show this
Thursday evening from 8:00-8:30 pm PST on blogtalkradio.com. You can
catch recent shows from the archives 24/7.
Remember when it comes to your money, it’s on your terms and no one else’s.