Why Pro Athletes Lose All Their Money

SPORTS: "The Fight Begins as Spotlight Dims," by Mitch Albom, Detroit Free Press, 12 April 2009

A recent Sports Illustrated story revealed that by the time they have been retired for two years, 78% of former NFL players have gone bankruopt or are suffering financial duress, and within five years of retirement, 60% of former NBA players are broke. Divorce rates among pro athletes are as high as 80% -- and much of that happens after the shoes are hung up and the real world calls.

Next time you say pro athletes have it made, remember the life that comes after you have it made. Ask yourself this: Would you rather spend 40 years on Earth looking ahead or looking behind?

The above statistics from the Sports Illustrated article blew my mind. What those statistics suggest to me is that the NFL and NBA are doing a poor job of taking care of their people -- not preparing them for the "real world."

Below are some "genius" investment opportunities made by pro athletes:

"...invested almost $70,000 in an invention: an inflatable raft that would sit under furniture. The pitch was that when high-rainfall areas were flooded, consumers could pump up the device, allowing a sofa to float and remain dry."

"...sank $300,000 into the Rock N' Roll Café, a theme restaurant in New England designed to ride the wave of the Hard Rock Cafe and Planet Hollywood franchises. One of his advisers pitched the idea as "fail-proof, with no downsides,"..."

"...squandered a fortune funding not only that inspirational movie but also the music label COZ Records; a cosmetics procedure whereby oxygen was absorbed into the skin; a plan to create nationwide phone-card dispensers; and...shops dubbed It's in the Name, where tourists could buy framed calligraphy of names or proverbs of their choice."

How about child support payments:

"Former NBA forward Shawn Kemp (who has at least seven children by six women) and, more recently, Travis Henry (nine by nine) have seen their fortunes sapped by monthly child-support payments in the tens of thousands of dollars."

Moral of the story: Exceptional athletic ability and extreme wealth does not equate to common sense.