Updated: Feb 23, 2021
When you think of a professional athlete, what do you think of? Do you think of fame? Do you think of fortune? Do you think of being able to go, do, and be whoever and whatever you want all because of the game?
I want to give you some statistics that will shock you; statistics that should be out in the public for every professional athlete and every athlete's parents, family, and friends to see before the money comes in (if it actually does come in!).
60% of NBA players go broke within five years of leaving the league.
78% of former NFL players experience financial distress.
A huge percentage (four times the average) of MLB players file for bankruptcy within five years after they retire.
There are many reasons behind why this happens. Becoming famous, with adoring fans and millions of dollars along with signing bonuses and enormous endorsement contracts, would be hard for anyone to handle. It’s difficult enough to handle with normal-sized salaries. But, give this to someone who has little to no understanding of financial literacy and you’re bound for swift and deafening defeat.
There are many reasons why professional athletes aren’t able to handle their money well: they overspend; their career was too short; they invested poorly; they hung with the wrong crowd; they weren’t financially literate.
As the Bible says,
“Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle.” (Proverbs 23:4-5)
Money comes and money goes.
But, the main reason why professional athletes become broke (their lack of financial literacy) is what I want to teach our youth. So that if they happen to be one of the very few to make it big they:
know HOW to handle their money
WHO to invest it with
and WHAT they need to do to enjoy it … without squandering it away.
By the way, only 2% of all college student-athletes will ever get the chance to play a professional sport for any period of time. To play professionally is literally like winning the lottery. Remember that. Social media and news outlets would have us believe it’s all good, all the time for professional athletes; that the money is never-ending.
This couldn’t be further from the truth.
So, if we aren’t teaching our kids how to responsibly use and preserve their money now, what do we think is going to happen if they do happen to become professional athletes? If we aren’t sure how to be smart with our money, do we think our kids are even thinking about it?
Probably not. They don’t stand a chance.
Do you remember NBA player Allen Iverson? He played 14 seasons in the NBA in both the shooting guard and point guard positions. He earned over 150 million dollars in his 15-year career and ended up broke. As the famous quote of his goes when the money ran out, “I didn’t even have money for a cheeseburger.”
What a devastating thing to happen.
If this is a common occurrence in the NBA (and most professional sports), what can we do to retrain our kids' way of thinking?
Here’s how: By teaching them how money works and how to make it work for them.
Here are a few reasons why your kids should be financial literate and what I plan on implementing into my workshops (and why, if I had it my way, this would be the most important class they take in high school!).
Financial literacy teaches our youth:
The basics of money management
How to budget
How to save
How to invest
About the negatives of debt (and what good debt is)
How to give
This knowledge lays a foundation for students to build strong money habits early on and avoid mistakes that can lead to lifelong money struggles. These are the money struggles professional athletes could have avoided if they understood the basics in the first place.
Even if your son or daughter NEVER sees the inside of a professional arena as a star athlete (or even as an athlete on the bench), the financial knowledge imparted to them now will be with them for the rest of their lives as responsible members of society.
Understanding money -- and how to effectively and wisely use it -- will, in turn, affect every area of their lives: family, relationships, work, and even play! All of it. If they can understand how to handle a little bit of money, they’ll know how to handle money when they have a lot.
At EAT Sports Foundation, I want your kids to see money as a tool: a tool to help others, and one that they can use to wisely invest in their future for a fruitful and successful life ahead.