Sunday, February 13, 2011

Nothing Says Successful Investor Like a Diamond Studded Grille


The photo above is a "grille". It was made for the running back of the Seattle Seahawks, Marshawn Lynch. It says "beast mode" on it. Lynch says he has to get into "beast mode" when he starts playing. Here is the famous run that Lynch made in last years playoff game.



Hell of a run, that.

What exactly is a grille? It is a formed mouthpiece that people (usually rappers and athletes) buy that is usually gold, studded with jewels. I don't know who started the grille thing but man, it has to be one of the most worthless investments that a person can possibly make.

It gets me to thinking about one of my favorite topics, athletes going broke. In general, I am more interested in the not so glamorous side of sports - the gambling, the broken bodies, the steroids, the dark side. We don't hear too much about these athletes going broke, but they do at a staggering pace.

Sports Illustrated wrote this fantastic article about the subject of pro athletes squandering their fortunes.

A few staggering stats from the article: By the time they are retired for two years, 78% of NFL players file for bankruptcy or are under financial stress due to divorce or other problems. Within five years, 60% of all NBA players are broke.

Whoa.

So why?

Family problems (divorce/tons of kids by too many mothers)
Letting family/friends take care of their financials
Frivolous spending
Stupid investments

A large part of the article is spent talking about these stupid investments. A restaruant or t-shirt company or auto dealership is much more interesting and tangible than a diversified portfolio of stocks or bonds and that is why many pro athletes are likely to invest (and lose) their money in them. I found that interesting and it was nothing I had ever thought about before.

In a past life, I considered opening up a business that would cater to athletes and others (like lottery winners) to try to educate them on basic investment techniques. Speaking of lottery winners, in the above article, the athletes are frequently compared to lottery winners, who also end up broke pretty quickly after their winning millions of dollars.

That business idea I had wasn't to be, and I am sure that someone has done it. But it isn't really helping much. Athletes, who have such short income earning time continue to spend their money and waste it at a blistering pace. Maybe they, in the end, are actually good for the economy as every dollar they make goes right back into the consumption circle. But the creditors they screw in the end certainly don't feel that way.

6 comments:

Carl from Chicago said...

I saw this article at Shamsports.com. It is from a former NBA player who plays in Europe and was tweeting that if there is a lockout the NBA players all figure they will just traipse to Europe to earn their $ and this is what he has to say about it:

"Yea I might ball in Europe to keep some $ coming in" random NBA guy...stop buying spinning rims and maybe you wouldnt have $ problems

..or how about you take yo punk a** to CVS and buy some condoms so you dont have 11 random kids

stop investing in "Never Gonna Make It Records" and invest in mutual funds and maybe you wouldnt have $ problems #themadhooper

Mr. NBA guy, stop trickin on these chicks..buy The Mack dvd..pick a line off there..use it...repeat...it works everytime fool!!!

Dan from Madison said...

haha sound advice, told in a truthful way.

One thing I failed to mention is that those four reasons I (and the article) listed definitely blend into each other.

Dan from Madison said...

And I still can't believe Pippen blew through ONE HUNDRED AND TWENTY MILLION DOLLARS. That is simply amazing.

Gerry from Valpo said...

N othing
B ut
A sswipes

Dan from Madison said...

N ine
F uture
L iens

Anonymous said...

Met a sports agent from ATL at one of my kids bball game (he was a dad as well, not scouting.) He told me about one ATL Hawk, the best player in their history who let his mom and sister invest his money. Of course, he was broke BEFORE he retired.