Why sports stars go broke
Sixty-five per cent of sportsmen go broke (bankrupt) after they quit the limelight.
In England wages of footballers average £30 000 a week (more than many households earn annually) but seven out of every ten ex-footballers are said to be 'broke' and having serious difficulties making ends meet.
Legendary sportspeople like Mike Tyson(earnings: $350 million, )Evander Holyfield ($250 million), Allen Iverson ($154 million), Arantxa Sanchez Vicario and Steffi Graf all declared themselves broke after their illustrious careers.
In Africa the figures are worse but the fact that most ex-African stars are smart and stay away from the public eye when it happens has helped mask the magnitude.
One is forced to ask how on earth this is possible, judging by the enormous sums earned during their active days?
LACK OF FINANCIAL EDUCATION
Contrary to what most people think, sportsmen are not complete illiterates or un-educated. They are educated in the art of sports and not finance. To get to the top of the world, you have to focus all your time to your sport and school education suffers. Hence, in most cases, top athletes are not educated in financial matters. This is no excuse but they hardly devote time to learn how to manage money.
Most superstars originate from acutely poor backgrounds and, in most cases, are raised by financially poor but not necessarily morally poor parents. They generally have a good heart but when the riches come to these sportsmen, they are found wanting in the know-how to handle this sudden wealth.
Case Study: Mike Tyson, ex world heavyweight boxing champion
FAMILY AND FRIENDS
Especially among Coloured stars and Africans, a man's wealth is shared among his family and we do have huge families.
Once these sports stars hit the big time, these family members and friends have to be catered for: school fees, feeding allowances, house rents, burials and house purchases etc all are billed to the sports star who erroneously thinks it is his duty to pay this. They become the sole bread winners for family and friends.
The financial burden that these stars inherit from their family and extended families is so huge that it practically drains them dry.
How much to share with family, friends and their savings account is a dilemma for African stars. The African culture is a communal kind of life and a lovely one at that, where it is deemed normal to share your earnings among family, unlike the western style where your family is just you, your wife and children.
Case Study: Aranxta Sanchez Vicario of Spain, a top ex tennis star
EARNING TOO FAST
A "normal" millionaire builds his millions gradually but athletes make the majority of their income in a short period of time, at a very early age. The entrepreneur can save over that lengthy period and learn to manage wealth at his own pace, unlike young professional athletes.
This wealth breeds stubbornness and advice from well meaning people is often ignored. Youth is synonymous with errors, due to inexperience, and it is difficult to tell a rich, young sports star that his ideas are wrong. He will simply ask you, “If you know it better, why aren't you the rich one instead of me?”
Case Study: Mike Tyson, ex world heavyweight boxing champion (world champion at age 17)
LACK OF POST-CAREER PLANS
Very few athletes plan for their post-career life during their active days. The preparation of body and mind for the next stage in their lives is not there. Some even erroneously think they will continue in the sports system for long periods after retirement, as coaches, managers, journalists or analysts. However, there is limited space to accommodate all and these functions need some form of education and study, which most athletes lack.
SPENDING A LOT AND SAVING A LITTLE
Everyone earns money (if you work) but not everyone saves in the same degree as they earn. Some sports stars mostly think that these huge earnings are not temporary but will last a lifetime. A successful career lasts at the most 10 to 12 years but the athletes sometimes forget that if you retire at the age of 35 and God let's you live till 70, you still have another 35 years to live. Boy those years run slowly when the wealth is not there.
"I spent over a million dollars on jewellery"- Andre Rison, former NFL star
Most sports stars meet their other halves when they are active and are at their best. Retirement means a change to their lifestyle and social standing and also to that of their spouses. This and the more frequent presence at home stifles and pressurises marriages. The end result is divorce and they usually are expensive. The effects are devastating and the inability to cope causes bankruptcy for many.
Case Study: Kenny Anderson (Ex basketball star) lost $60 million to ex-wives
BAD BUSINESS INVESTMENT
Naturally, with so much money earned, many athletes try to invest and follow bad advice from managers and so-called friends. In most cases they invest in ventures that they have no expertise in and often these deals go bad.
The success most athletes have as sportsmen seems to blind them from the fact that they might not be successful as businessmen, even in sports business.
Case Study: Evander Holyfield, ex world heavyweight boxing champion
"THE LIFE AFTER FOOTBALL SYNDROME"
At retirement, several sportsmen continue spending and living like they used to when they were active or at their prime. Hundreds of thousands are still spent on jewellery, mistresses and holiday homes in areas they hardly visit. These are quiet drains on their fortune and by the time they realise it, it is too late.
Most athletes have a problem transforming from active to passive sportsmen.
Case Study: Allen Iverson kept spending $360 000 every month after retirement
This piece is written with the aim of sharing with aspiring sportsmen the errors they should avoid and with parents so they know how to mould or guide their children.
In conclusion, to err is human but with success comes envy and jealousy and even criminality from dubious minds. One has to be careful and not err in a big way. The harder you try to earn honest money through sport success, the more there are people working even harder to separate you from that wealth.
As a sportsman people will love you but you have to love yourself most by being cautious and prayerful. od help us all!