Athletes blowing millions of dollars and going broke seems to happen far too often.
Eddie Johnson, who played in the NBA for 17 seasons and who is now a commentator for the Phoenix Suns, a motivational speaker, and the author of a book, “You Big Dummy,” a guide for athletes to have a successful career, both on and off the court, recently did a short video for USA Today. Johnson outlines the five most important things every young professional athlete should do to keep from going broke.
These are the 5 most important things to do according to Johnson.
1. Hire a team of financial advisors.
Specifically, Johnson says every player should hire a “dream team” that includes a reputable agent, a great accountant, and a great financial company. Johnson was emphatic that the last one be a company and not a single person.
Johnson also says it is better if the three parts of the dream team do not know each other. This way, they can police each other and the player will have less to worry about.
However, Johnson makes it clear that with the financial advisors, a player should never sign a power of attorney, noting that Kareem Abdul-Jabbar lost millions in his career after giving somebody else control of his finances.
2. Pay your own bills.
Johnson urges athletes to “take out a checkbook and pay your own bills” rather than giving somebody else that responsibility.
This is important because when a player is accountable for their own affairs they will have a better understanding of just how much money they are spending.
3. Don’t buy an abundance of toys, especially toys that depreciate.
Johnson talks about players that have “6, 7, 8 cars” and notes that they can only drive one at a time and an athlete can only live in one house.
4. Focus on your kids’ education.
Johnson says it is important for athletes to focus on the education of their children because for most they will be retired when their kids are ready to go to college.
If an athlete starts focusing on the education early, they won’t be surprised how much a college education can cost, especially at private schools.
5. Just learn to say “no.”
Johnson notes that it is hard to say no, “especially when it comes to family and friends.” However, the sooner an athlete learns to say “no,” the better off a player’s bank account will be.
Here is the full video.
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