Why do professional athletes, even those who make millions of dollars per year during the peak of their career, end up broke just a few years after they retire? This is a question with a simpler answer than you may think, and no, the answer is most definitely NOT to pay them more. Simply, these athletes live as if they will make this much money for the rest of their life, when, in reality, they have maybe 10 years during their life when their career will pay them as lavishly as they do. When pro athletes spend their money as soon as they get it, they end up broke once the checks stop coming in. Whether it is retirement, injury, or another event that ends an athletes' career, the athlete will not be able to earn money by playing his or her sport forever. This sudden halt in income can cause many players who have squandered their money instead of saving it to file for bankruptcy soon after they retire from their profession.
In the NFL and the NBA, well more than half of its players are broke and jobless within 2 years of their retirement from the league. According to Sports Illustrated, "70 percent of NFL players will be broke 2-4 years after leaving the league. In the NBA, 60 percent are broke just five years after retirement." These are mostly players who never made a large impact on a team and are out of the league after a few seasons. In many cases, these are players who grew up in very tough situations and never learned how to correctly manage their money. If they went to college, in most cases, it was on a scholarship based on true profeciency at their sport and their education was an afterthought. This leads to disaster after their career in sports ends because they can no longer earn money playing proffesional sports and have no degree with which they can continue to earn money and further their lives.
However, not all of the athletes filing for bankruptcy were small-time players who never made it in their sport. Many, many athletes that were extremely successful in their proffesional career and made millions upon millions of dollars have file for bankruptcy after their playing days were over. Even household names such as Mike Tyson and Allen Iverson, both of whom garnered well over 200 million dollars throughout their professional sports careers, have filed for bankruptcy since their respective retirements. There is little pity for these athletes because of just how much money they have squandered, however, there are those that are sympathetic because of the situations that these athletes grew up in and the utter lack of preparation these athletes receive for how to handle the extreme wealth that came to them following their massive success in proffesional sports. Living a lavish lifestyle has been a part of the culture for professional athletes for decades, however, athletes have also been going broke just years after their retirements for decades as well. Some people never learn.
Here is a Relatively Short List of Most Notable Atheletes to File for Bankruptcy After Retirement:
Mike Tyson (boxer) : $300 million peak wealth
Evander Holyfield (boxer): $250 million career earnings
Allen Iverson (basketball): over $180 million career earnings
Antoine Walker (basketball): almost $120 million total earnings
Latrell Spreewell (basketball): more than $95 million career earnings
Lawrence Taylor (football): more than $50 million total earnings
John Daly (golf): almost $60 million total earnings
Kenny Anderson (basketball): more than $60 million career earnings
The list goes on and on and on. Causes of this absolutely massive loss of wealth are attributed to gambling, partying, bad real estate investment, divorce, child support payments, misguided video game investment, expensive cars, paying for friends, or for a variety of other reasons depending on the player in question. Expenditures such as these lead to millions of dollars disappearing more quickly than expected for many atheletes, though the problem is getting more attention and may soon slow down.
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