There are two main ways retirement from the professional athletic world can go.
- You can exit the sport with a positive career behind you and a strong future ahead. You boast a seven-digit nest egg and plenty of opportunities for continued success. With investments, endorsements, licensing, speaking and appearances, books, and other ongoing activities, athletes like Shaquille O’Neal, Jack Nicklaus, Michael Jordan, and David Beckham have grown their wealth beyond when they were the stars of their respective sports.
- In a more common scenario, however, you wash up on the beach of reality with a fistful of dollars and no way to regain or replicate your former shine.
Every star athlete is racing against the clock. Being in the prime of one’s fitness and talent only lasts for so long. Newer, younger talent is always coming up the ranks. Many athletes may not even reach their full earning potential before their career is over.
If a career is short and an athlete doesn’t make enough or save and use his or her earnings wisely, it’s lights out on fame and fortune.
Why Are Retired Athletes Going Broke?
Six out of ten NBA players file bankruptcy within five years of retirement. Almost eight out of ten NFL stars do the same. MLB players file for bankruptcy four times more often than the average American.
There are many reasons this fall from grace happens — bad decision-making, bad advice, overspending and overconfidence in earning power can all contribute.
One of the top reasons for retired athletes going broke, however, is that they tend to be surrounded by manipulators, not mentors. While athletes are ultimately responsible for their actions and inactions, having the right support can make that responsibility easier to bear.
Finding a Solution
Having an individualized approach to discipline, education, mentoring, and commitment makes all the difference. A broad-based program put on by a players’ union or league won’t address the specific needs, capabilities, and circumstances of each athlete. But success isn’t a solo act.
In the same way that leagues have boards of directors to ensure responsibility and accountability, an athlete can and should have a personal board of directors, too.
These directors can be role models, mentors, and advisors, carefully selected to keep the athlete’s best interests in mind while helping guide him or her through the perils of life, business, and finance.
Athletes need to take a big picture view. Life is larger than sport.
They say successful athletes shouldn’t forget where they came from. Sure. But they shouldn’t take their eyes off where they are heading, either.