A new study by the National Bureau of Economic Research reports that nearly 16 percent of NFL players drafted between 1996 and 2003 declared bankruptcy within 12 years of retirement. Eight years earlier a study done by Sports Illustrated suggested 60 percent of NBA players go broke within five years of retiring from the game.
Former Diamondbacks pitcher Livian Hernandez filed for bankruptcy in July after making $53 million in 17 seasons. Pro golfer Billy Mayfair lost many of the millions he made following a difficult divorce and custody battle. Diamondbacks manager Wally Backman, after an accomplished playing career, was sentenced in 2012 on charges of bankruptcy fraud, concealment of assets and money laundering.
So with salaries most of us can only dream of, where does it all go wrong? A lot has to do with lack of financial knowledge, overspending, career duration, and bad investment decisions. Marriages that end is another contributing factor. Many athletes work with the same wealth manager or financial advisor their whole career, assuming they have their best interest at heart. They are unaware how they are invested or what fees they are being charged. Money mismanagement is a big problem- not only with the player but on the part of their financial advisor.
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