Former NFL player Phillip Buchanon has been using his experience to help teach young NFL players how to handle their money.
Buchanon released his book, “New Money: Staying Rich” earlier this year, and has been active in promoting the book and helping future players avoid financial strains and bankruptcy.
Buchanon, who made over $US20 million in his career, has stressed the importance of managing money when it comes to family members. He has often told the story of his mother, who he says demanded $US1 million from him after he was drafted as a price for raising him.
On his personal blog, Buchanon explained that he felt “obligated” to just give his money away:
“When I talk about this, people sometimes ask what kind of bad financial decisions I made. I’d say blowing $US1.5 million in one business deal was pretty bad. I would say giving a lot of money away — $US50,000 here, $US20,000 there — was not a smart move. When you are a young player with new money, you feel obligated to just give your money away because of the pressure that you feel, especially from your own family.”
In the same blog, he wrote about the three tips he tells young players:
“First, when they come into getting a lot of money, I want them to make sure it’s permanent money. I don’t want them to blow it all, and next thing you know, it’s gone. Determine the difference between wants and needs for yourself and wants and needs from your family. The second is making sure that they have people that they trust and talk to on a daily basis who can actually help them to be successful financially. And third, find mentors. If you have the right mentor(s), you’ll have a lot more success and a lot less headaches…trust me!”
Buchanon recently spoke at the NFL Rookies Symposium to advise players on how to adjust to their newfound wealth.
In an excerpt of his book that he provided to Fox Sports, Buchanon says he didn’t give his mother the $US1 million, but he did buy her a new house, which began the financial strain:
I bought my mother a house. I also advised her to sell the old one I grew up in when I put a new roof over her head, but my mother had other plans. Instead of selling my childhood home, she decided to rent it to my aunt. So I had to finance my mother, the budding landlord. Only this wasn’t an investment. It was an encumbrance, because I didn’t share in my mother’s profit-making scheme. For the next seven years, I continued to make mortgage and maintenance payments on both homes.
I learned from this expensive lesson that big-ticket purchases for family members, such as houses and cars, should be evaluated with the following questions in mind: If you were unable to make payments for these purchases, would that particular family member be able to make the payments? Twenty years from now, who will be paying the upkeep on the house? You or your family member?
Buchanon also said that he often found family members asking him for money so they could fix things. He wrote in his book, “So I’d write them a check; of course, the problem never got fixed. The check, however, always got cashed.”
On an appearance on MSNBC, he said he hasn’t spoken with his mother since his book came out.
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