Business Strategy | Financial Planning

NBA star scores huge financial literacy victory


I don't know about you, but I get all of my personal financial advice from professional athletes.

I'm lying. I get none of my personal financial advice from professional athletes, and not just because they make obscene amounts of money and have lost all touch with financial reality.

The real reason I don't take financial advice from athletes is this 2009 Sports Illustrated article, which offers these stunning numbers:

  • "By the time they have been retired for two years, 78 percent of former (National Football League) players have gone bankrupt or are under financial stress because of joblessness or divorce."
  • "Within five years of retirement, an estimated 60 percent of former (National Basketball Association) players are broke."
  • "Numerous retired (Major League Baseball) players have been similarly ruined, and the current economic crisis is taking a toll on some active players as well."

How does that happen? Too often, they ignore the advice of financial advisors, make ill-advised investments, and often watch their careers (and income) end early due to injury.

Every now and then, though, an athlete will surprise you by doing the right thing.

For this example, we turn to the NBA. Team owners have locked out players while the two sides try to iron out a new collective bargaining agreement. The work stoppage is putting the entire 2011-12 season in jeopardy and has sent players scrambling to find something to fill their time. Many are practicing with pro teams overseas, but at least one is putting his time to good use.

According to Yahoo! Sports, Philadelphia 76ers star Andre Iguodala spent a week recently as an intern with Merrill Lynch. His goal: To learn enough about finance and investing to prevent his own personal finance Armageddon.

"I understand that this basketball thing is a small window," he said. "The things that I’m getting from basketball ... I want to stretch it out my whole life."

That's personal finance in a nutshell, isn't it? Granted, it's way easier for a pro athlete with a multimillion-dollar contract, but you see his point. We're all just trying to figure out how to stretch it out for our whole lives.

Thanks for the inspiration, Andre. Keep feeding that pig.

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Bill Sheridan