NFL players go bankruptcy in alarming numbers
Image Source: Flickr User April Spreeman
According to research from the National Bureau of Economic Research, within 12 years of retiring from the league, 16% of NFL players file bankruptcy. Not only that, but most NFL careers average less than four years. With the NFL draft recently over, many young men are excited about their new teams, but the NFL offers little job security and less than stellar retirement prospects.
So what can we learn from professional athletes’ money woes? Here are some financial tips that are equally relevant to NFL pros and armchair quarterbacks alike.
#1 Don’t Give up on Your Education
Many athletes go pro while still in college and walk away from their education. This can be a real issue later in life once their pro careers end. The same truth applies to non-athletes. Getting an education or professional training can be the difference between subsistence living and earning a wage that supports you throughout your life, enables you to own a home, allows you to save for retirement, and lets you have the life you want.
#2 Save for the Future and Retirement
Many pro athletes, particularly those who come from humble backgrounds, may be excited to have a big payday and start spending all they earn. In fact, savings should be a priority from the get-go. It's the same for everyday consumers. This includes both retirement savings and short-term savings that allow you to build a buffer against emergencies.
#3 Develop a Plan B
No matter what you do for a living, something might happen that makes you unable to do your job. If a surgeon develops a hand tremor, they’re done. If a quarterback’s knee goes out, they’re done. Your job could become obsolete or the market might change. When the job market is volatile – which happens periodically – your fallback option can keep you afloat financially until things improve.
#4 Don’t Make Risky Investments
No matter what you earn, overly risky investments are never a good idea. Countless NFL players have been talked into risky investments because they weren’t financially savvy enough to know a bad deal. The same goes for the average earner. Conservative investments that grow slowly and are less likely to flop are a far better prospect than getting involved in risky things that can quickly go belly up.
#5 Don’t Keep an Entourage
Most of us don’t keep a squad around as adults, although pro athletes, actors, and other celebrities often do. But you may have an unofficial entourage. Do you have pals who always expect you to buy the drinks, pick up the tab, or loan them money? Even if you earn more than your friends, that doesn’t make you responsible for their costs. Cover your own costs and expect your friends to do the same, and your finances will thank you.
#6 Spend Well Below Your Means
No matter what you earn, spending all (or even most) of it is foolish. Your cost of living should not be more than you can afford. If you’re living paycheck to paycheck, that’s an issue. When you buy a home, don’t buy at the limit of your mortgage approval range – the same goes with a car. Your budget should be set so that you can save money each paycheck, pay bills on time, and not rack up debt.
#7 Don’t Competitive Spend
Pro athletes and entertainers may feel they have to spend in line with other people of their same position. This happens to regular Joes too. You may feel like your car has to be as new as your neighbor's or your vacation as extravagant as your co-worker's. Spending because someone else is spending makes no sense for your finances and can lead you into a debt trap.
While many North Carolina consumers believe that getting drafted into the NFL would be the event of a lifetime, for many athletes it’s a fleeting moment of success that may leave them worse off financially in the long run. For 16% of NFL pros, it turns out to be a riches to rags story. No one wants that.
If you’re deep in debt, struggling to pay your bills, and looking for a better financial future, contact the Law Offices of John T. Orcutt for a free North Carolina bankruptcy consultation. Call +1-919-646-2654 now for a free no-obligation appointment at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.