Prompt Wrote:It's a well-known fact that most players are broke within a few short years of leaving the league. As much, many modern players have started investing their money in assets and businesses in an attempt to preserve and expand their nest egg. What is your player doing to maintain their financial freedom?
From what I've seen and heard, the problem that most players have after leaving the league is a spending problem, not an investment one. Too many people get into the mindset of there always being more money available and don't think about how they're going to be out of their contract money. For those who are well known or good actors, sure they can make a good buck doing endorsements or other acting related work, but the vast majority of analysts and color guys make way less than players. And if you go into something less renown, even coaching - all but the top coaches are paid a pittance. So yeah, I think fundamentally players need to understand their spending vs. their earning and have a plan to get those aligned.
Once the income side of things has been figured out, I'd lean towards a safer investment bent. One of the biggest other sources of major financial loss is doing something like investing in a business without understanding the risks. So, I'd personally just go into a broad stock/bond market investment. Something like a 70% stock 30% bond seems fairly safe and performs fairly well in most historical scenarios. That's enough to make sure I'm not going to suddenly lose everything due to another Enron or the like while still having upside. There's probably a lot of tricks I could work with a CPA to do to make it work out better from a tax perspective, but something like that would be my simple starting point.
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