Thursday, July 1, 2010

Why Do So Many Pro Athletes Go Broke?

The reasons, according to a 2009 Sports Illustrated article, are simple: they don't pay attention.
   Of course, there are contributing factors:
*grow up poor, then try to make up for lost time  (like eight vehicles, all on lease payments)
*hire family and friends to manage your money -- instead of a professional
*hire a professional you haven't checked out
*invest in a business, new invention or whatever...ditto
    Once these steps are all in place -- pay absolutely no attention to what's going on. Don't open any bills. Don't check your bank account. Do nothing.

Then what happens? According to SI, 60% of professional athletes are broke within two years of their retirement.
   We may not be scooping up bazillions of dollars, but can still learn from these basic cautions:

*Don't invest in a 'sure thing' unless you're certain it is.
(A number of the sad stories in the SI article have to do with investment scams. And I can never forget the $7000 we lost years back from trying to invest in wireless licenses.)
*Don't let your family or friends make up your mind. Advice is good -- but you have to make those decisions yourself.
*Keep checking your portfolio. Weekly or monthly or whatever -- just do it.

And now if you'll excuse me, I'd better go see how my Ford stock is doing.

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