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Almost everyone dreams of being rich, or at least of having the financial resources to live comfortably. The pathway to wealth envisioned by many people involves becoming famous, either as a pro athlete or entertainer. The odds are long, even for the most talented individuals, but the dream persists.
Sadly, many of the people who attain that much sought after level of success and wealth end up in financial ruin. Athletes are particularly vulnerable. According to Sports Illustrated:
- By the time they have been retired for two years, 78% of former NFL (National Football League) players have gone bankrupt or are under financial stress because of joblessness or divorce.
- Within five years of retirement, an estimated 60% of former NBA (National Basketball Association) players are broke.
- Numerous retired MLB (Major League Baseball) players have been similarly ruined, and the recent economic crisis is taking a toll on some active players as well.
This is even more shocking when you look at the minimum salary for each league:
MLB: $500,000
NBA: $507,336
NFL: $420,000
That’s 10 times the median personal income in the United States. The average NFL career is three and a half years. In the NBA it is four and a half and in baseball it’s a little over five and a half. At the low end, the average NFL player will earn over a million dollars in his career. It would take the average worker 35 years to earn that much. Yet for many athletes and entertainers, as soon as the money comes in it’s gone. Here are just a few examples:
Jack Johnson, NHL player
Currently a defenseman for the Columbus Blue Jackets of the National Hockey League, Jack Johnson filed for bankruptcy two days before that start of the 2014/2015 season, according to The Columbus Dispatch. Though he has earned over $18 million in his nine-year career, he is broke. The Dispatch reports that Johnson’s parents squandered the money – although he did drive to his bankruptcy hearing in a BMW, leaving his Ferrari at home.
Thomas “Hollywood” Henderson, former NFL player
This player’s story goes from riches to rags and back to riches. Dallas Cowboys great Thomas “Hollywood” Henderson saw his post-football life spiral out of control, leading to a 1983 arrest on drug charges. After serving eight months in jail, he turned his life around. In 2000 he hit the Texas lottery for $28 million. He used the money to start a charitable organization and now tours the country as a motivational speaker.
Scottie Pippen, former NBA player
Along with Michael Jordan, Pippen helped the Chicago Bulls win six NBA championships. He earned over $120 million during his career, but a series of bad investments doomed him financially. Among his unwise purchases was a jet that cost $4 million. He had to pay an additional $1 million to get it back into flying condition.
Vince Young, former NFL player
As the third overall pick in the 2006 NFL draft, Vince Young went on to earn over $26 million, after taxes, and wound up broke. According to Fox Sports, the former Tennessee Titans quarterback spent $5,000 a week at the Cheesecake Factory and ran up a $6,000 tab in just one night at T.G.I. Fridays.
John Daly, pro golfer
John Daly’s outlandish lifestyle was his undoing. Between 1991 and 2006 he gambled away over $50 million, according to ThePostGame.com. This, along with four failed marriages and child support payments, helped erase the rest of his fortune. He’s more fortunate than some other athletes, though, as he is still able to play. He currently makes about $150,000 a year.
MC Hammer, rapper
After borrowing money from several members of the Oakland A’s baseball team to start his own recording label, Hammer went on to sell over 50 million records worldwide and was once worth $30 million. But living large and employing a big staff left him $13 million in the hole.
Burt Reynolds, actor
One of the biggest movie stars of the 1970s and 1980s, Reynolds once was part owner of a pro football team. Divorce, a failed restaurant chain, and other bad investments led to him to file for Chapter 11 bankruptcy protection in 1996.
Tia Carrere, actress
With a steady gig on the hit soap opera General Hospital, this young Hawaiian native landed a role in the hit motion picture Wayne’s World, which really heated up her career. To get out of her General Hospital contract, according to Business Insider, she filed for bankruptcy and claimed that her salary wasn’t keeping pace with her movie star lifestyle. She lost the suit and squandered her movie earnings while doing so.
On the other hand, there are a lot of athletes and entertainers who leave the playing field and the spotlight and go on to live comfortably. Among them:
Wayne Rogers, actor
A star on M*A*S*H*, one of the most successful sitcoms of all time, Rogers left the series after only three seasons. He appeared in a few other shows, but none as successful as M*A*S*H. During his time on that show, he began to invest in the stock market and in real estate. Now a very successful investor, he hasn’t acted since 2003.
Rick Mirer, football player
In his nine-season career, Rick Mirer played quarterback for five different teams – none of which had a winning record. He founded a successful winery once his playing days were over. With nearly half a million dollars in annual sales, the winery also helps support The Mirer Family Foundation – a charity that supports youth education and health programs.
Nick Lowe, rock singer
His name might not ring a bell, but you may have heard some of Nick Lowe’s songs. His two most famous are “Cruel to be Kind,” which earned him his only appearance on the U.S. top 40 (#12) and “(What’s so Funny ‘Bout) Peace, Love, and Understanding,” most famously recorded by Elvis Costello. Though that song wasn’t even released as a single, it has made Lowe millions.
That’s because a version by Curtis Stigers appeared on the soundtrack for the 1992 film The Bodyguard, selling 17 million copies in the U.S. alone. The song has been covered by dozens of other artists too, as have other songs by
Lowe, but the royalties from The Bodyguard netted him almost $1.5 million.
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Since I’m a Filipino, I should add Manny Pacquiao. I saw his life movie when he started to be famous, he had also a problem like abusing drugs, girls and others. Thankfully, he came back on the right track and now he keeps on shining and owns different companies.
Goes to show how one can change attitude and be on a right track. Very relevant to personal finance realm. Thanks for sharing!
It’s interesting how many lottery winners, well paid entertainers and athletes manage to go broke. I think they over estimate how far their money will go. I think I’d rather plod along with my frugal life style and quiet life.
Many of them do lose money in a bad investment or business as well. partly due to lack of oversight and lack of drive. Money can come after hard work but it can vanish by the lack of it.
It’s crazy to see people who make this much money still end up broke. Just when I thought my student debt was bad.
Well said! Habit is the only thing that can go bad. Your finances turn around if you take care of habits.
I have read many stories of people who mismanaged their money and ended up having to file for bankruptcy. Perhaps some of them got blinded by the sudden wealth that they just went buying everything they couldn’t afford before and indulged themselves too much, not understanding the implications their new lifestyles would have on their finances. It’s really important to learn how to be wise with finances. It’s good to note too, that you should surround yourself with people who are not just interested in your money or what they can get from you.