Advertisement
investing

NFL Superstars' Financial Fumbles Hold Lessons for Rest of Us

Just because you're rich doesn't mean you don't make money mistakes. In fact, it may mean you make bigger ones.

It isn’t much of a surprise anymore when you hear that a former NFL star is suffering from serious financial woes.

It used to be you’d wonder how someone who made millions of dollars every year could lose it all so fast. Now we know: They spend too much. They have expensive divorces. They get bad advice and make terrible deals.

Advertisement - Article continues below

And for many, their careers are short — just three to six years.

Some epic fails by NFL stars

But even seasoned superstars can run into trouble. In 2010, John Elway, the Denver Broncos’ Super Bowl-winning quarterback and current general manager, was among dozens of investors who got caught up in a Ponzi scheme and lost millions. When Cleveland Browns quarterback Bernie Kosar filed for bankruptcy in 2009, he owed $9.7 million to the bank for failed real estate deals, $3 million to his ex-wife, and thousands more in personal loans. Even the late, great quarterback Johnny Unitas, beloved in Baltimore, filed for bankruptcy in 1991. And just last fall, 60 Minutes reported that several players — including Ray Lewis and Terrell Owens — had lost millions after investing in a failed electronic-bingo-casino-and-entertainment complex in Alabama.

In other words, these guys make mistakes just like the average Joes who fill up stadiums to watch them. They just do it on a much grander scale.

Where they go wrong

Just like doctors, dentists and construction workers, athletes hang with their own, and they tend to invest in the same ways. They tend to like businesses that bear their names, raise their profiles and feed their egos — and when they do make an investment, they tend to go big, putting all their money into car dealerships, restaurants and sports franchises. Some of those work out … but a lot of them don’t.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

Pro football players are good at what they do, but clearly many aren’t getting the right advice when it comes to planning for the future. If an NFL star walked into my office today and asked me for help, I’d sit him down and start asking questions.

  • Have you worked out a plan for protecting your assets as well as growing them?
  • Have you put together a trust?
  • Have you thought about your future medical expenses and all those injuries that may have taken a toll on your body and your brain?
  • Do you look at the real returns of investments versus what a friend or the stock market ticker is telling you?

And while we were chatting, I’d put the focus on these three points:

  • Inflation: This is a particularly important factor for someone who has become accustomed to and hopes to maintain an upscale lifestyle. To keep up, he’ll have to double his income every 10 to 15 years, which won’t be easy once those big paychecks stop. But there are things we can put in place to make it happen.
  • Taxes: It’s imperative to take taxes into consideration when planning for the long term, especially when so much money is involved. I’d suggest creating a family foundation, with money the player can tap into while he’s alive but that also goes on into perpetuity to support philanthropic causes he believes in. He can involve his family members, giving his kids a chance to learn about giving. And he can give the foundation his name!
  • Guaranteed income: Restaurants fold, stocks drop and endorsement deals can dry up, but there are ways to be sure his money lasts as long as he does, including different kinds of annuities.
Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

These are tough topics for young men who’ve dreamed of laying down cash for a new car or helping friends and family get past their money problems. They certainly aren’t designed to inflate an already healthy ego. But if these guys want to come out of their careers with more than memories, they’d be wise to find an adviser who will help them tackle a plan that’s less about risk and more about long-term rewards.

Lessons for the rest of us

Fans can learn some lessons from their favorite superstars’ high-profile fumbles. After all, they’re not the only ones who have to overcome setbacks. And we’ll all have to deal with similar issues in retirement.

Find a coach you can trust: Your adviser can help you put together a game plan that addresses inflation, taxes and income needs on your level of play.

Kim Franke-Folstad contributed to this article.

Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims-paying ability of the issuing company and are not offered by Global Financial Private Capital.

This material is for informational purposes only. It is not intended to provide tax, accounting or legal advice or to serve as the basis for any financial decisions. Individuals are advised to consult with their own accountant and/or attorney regarding all tax, accounting and legal matters.

Advertisement

About the Author

Donald B. Bergis, Investment Adviser

Founder and President, Regent Wealth Management

Don B. Bergis is the founder and president of Regent Wealth Management. He has spent more than 15 years as an adviser, specializing in preserving the wealth his clients have accumulated and growing it responsibly. Don is the co-author of "Victory: The World's Leading Experts Reveal Their Secrets for Winning in Health, Wealth & Success in the New Economy," and he can be heard on the nationally syndicated "Financial Symphony" radio broadcast. Investment advisory services offered through Global Financial Private Capital, an SEC-Registered Investment Adviser. SEC registration does not imply a certain level of skill or training. Regent Wealth Management and GFPC are not affiliated entities. One or more individuals at Regent Wealth Management are investment adviser representatives of GFPC and [may] receive[s] [JA1] compensation in exchange for soliciting investment advisory services provided by GFPC on behalf of Regent Wealth Management clients.

Advertisement

Most Popular

18 Things You Can't Return to Amazon
Smart Buying

18 Things You Can't Return to Amazon

Before tossing these items into your virtual shopping cart, be sure to read Amazon's return policy first.
September 17, 2020
Election 2020: Joe Biden's Tax Plans
taxes

Election 2020: Joe Biden's Tax Plans

With the economy in trouble, tax policy takes on added importance in the 2020 presidential election. So, let's take a look at what Joe Biden has said …
September 18, 2020
7 Foreign Countries Luring Americans to Work Abroad During the Pandemic
careers

7 Foreign Countries Luring Americans to Work Abroad During the Pandemic

Work remotely – really remotely – in these appealing destinations offering special visas for American workers.
September 18, 2020

Recommended

HSA Limits and Minimums
health savings accounts

HSA Limits and Minimums

Annually adjusted contribution limits and other requirements must be met if you're covering health care costs with a Health Savings Account.
September 21, 2020
Don’t Be Paralyzed by Uncertainty
retirement planning

Don’t Be Paralyzed by Uncertainty

You definitely need a plan, because what’s ahead could be scarier than what’s behind us.
September 21, 2020
Insurance for Long-Term Care at Home
retirement

Insurance for Long-Term Care at Home

In the wake of COVID-wracked nursing homes, increasingly more people are looking at options to age in place with long-term care insurance.
September 17, 2020
A Step-by-Step Guide to Being an Estate Executor
retirement

A Step-by-Step Guide to Being an Estate Executor

Whether you’re planning ahead for your own heirs or have been asked to serve as an executor of an estate for someone else, it pays to understand what …
September 17, 2020