A Wall Street billionaire has one piece of money advice for pro athletes

Marc LasryAP ImagesMarc Lasry, the founder of Avenue Capital and co-owner of the Milwaukee Bucks

Billionaire Marc Lasry, the CEO of $US14 billion hedge fund Avenue Capital and co-owner of the Milwaukee Bucks, has some advice for NBA players: pretend you don’t have any money.

In a recent episode of “Wall Street Week”, Lasry explained that friends and family usually start asking for money when players get signed.

“You’ve got to sort of understand, for them, they’re the only person out of their neighbourhood or out of that whole family structure that has made money. So what ends up happening is the minute they make money everybody is always asking for money,” Lasry said.

“What we try to explain to our players is look, you know, save your money. Everyone is going to tell you: ‘Here is a great investment’. Just save it….you should be saving your money. Also, just tell everyone you have no money. Say: ‘Look I get paid but money goes automatically to here and I don’t have access to that money.'”

Lasry explained that one of the big challenges is being able to say “no.”

Another financial challenge players can face is making their money last, Lasry said.

“Imagine if when you went [to college] somebody said to you: ‘Here is four million dollars. And by the way, I’m going to pay you $US4 million or $US3 million for the next four years.’ That is what rookie contracts are today. And you’re 19 years old. I mean, you know, the world is your oyster. You think you’re going to live forever.”

The problem, though, is that the players tend to focus on the dollar number.

“You’re going to spend that money. And that’s what a lot of the mistakes are. People sort of look and they focus on the dollar number and forget they have got to pay taxes and they have got to pay their agent and they have got to do all these things.”

Some of the players burn through as much of $US195 million in earnings by the time they come to retire, according to Lasry.

“I think as they learn — they do learn it towards the end of their career. By that time, that money has gone away. I know players who’ve made $US200 million over the course of their career and they probably have $US5 million in the bank.”

Watch the full episode of ‘Wall Street Week’ here >

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