There are a number of sobering statistics regarding how professional athletes lose their fortunes. A 2009 Sports Illustrated Article reports that:
-Within 2 years of retirement, 78% of former NFL players have gone bankrupts or are under financial stress because of joblessness or divorce.
-Within 5 years of retirement, an estimated 60% of former NBA players are broke.
-Numerous retired MLB players have had their fortunes ruined, and the current economic crisis is taking a toll on some active players as well
Why do these athletes lose obscene amounts of money? They ignore the advice of financial advisors and spend lavishly. However, there’s one example of an athlete that is investing in the future.
As you know, the NBA is currently engaged in a collective bargaining lockout between the players and the owners. The 2011-12 season is in jeopardy and players have been forced to find different ways to spend their time. Many are practicing with professional teams overseas, but one NBA player is making an impressive career exploration.
According to Yahoo! Sports, Philadelphia 76ers player Andre Iguodala recently spent time as an intern with Merrill Lynch. During his tenure, he shadowed a venture capitalist His goal is to learn enough about finance and investing to prevent his own money from going down the tubes. If the lockout continues, he is considering taking a separate internship with a hedge fund or investment bank.
“I understand that basketball is a small window. The things I’m getting from basketball..I want to stretch it out my whole life...I’ve always had an interest in what was going on in the market. I have a couple of teammates who are into it. I always read the Wall St. Journal, and I have an E-Trade account, so the interest in finance has always been there”, Iguodala said.
It’s refreshing to see athletes taking an interest in a backup plan. Given this information, Andre is probably part of the 40% who will have money within 5 years of retirement. Kudos to Andre!
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