Now, to be sure, we all dream that one day a whole windfall of cash just comes cascading in. Like winning a lottery. Like finding a whole suitcase bulging with dollars. Or, getting a pro athlete-size signing bonus and contract.
But here are some factors that are not often discussed:
• A lion’s share of athletes don’t come from upper-crust families where money in large doses is status quo. Heck, a lion’s share of everyone doesn’t come from that background
• Investment, risk, reward and money retention are thus foreign terms.
• Taxman takes half.
• Agent takes 10 percent or 15 percent.
• Lawyer takes 5 percent.
So at this point, instead of $10 million, the athlete may be looking at something more like $2.5 million. Still not a bad payday, eh? But put yourself in that situation. You’ve got some of your boys you wanna take care of, right? Maybe put some of your buddies on a payroll? And you gotta take care of your family, and especially your mom, right? OK, So buy her a house. And what about a car and house for yourself? You might as well get that Mercedes AMG for $200K. The house on the water on the good side of town will work … and you need a condo in the city that you are playing in, too.
All of a sudden, that $10 million is gone, and you are signing playing cards at a convention just to pay down that car that is now six years old, dented and worth about 30 grand. And now maybe the real estate market has taken a nose dive. But everyone expects you to be rich and flush with cash, and so, to stave off embarrassment for a while, you still try to look like you are living like a king. Until you are in debt and filing a Chapter 11 for relief