Antoine Walker was one of the most famous stars in the NBA, so it should come as no surprise to learn that his stardom came with corresponding compensation. In total, he made more than $ 100 million throughout his NBA career, but had to file for Chapter 7 bankruptcy in 2010. (1) For reference, this means that Walker filed for bankruptcy within 2 years of his retirement, since how had that happened in 2008.
That said, Walker had filed for bankruptcy for the same reason that most people file for bankruptcy, that is, his expenses so far exceeded his income that he lacked the time needed to make the necessary changes to his portfolio with in order to stay afloat. . In his particular case, he claims it was the Great Recession that brought him down by sinking his Chicago-based real estate company, which had many undeveloped properties with overdue associated mortgages, resulting in banks collecting his financial portfolio. which had been made available as collateral.
Unfortunately, Walker is far from alone when it comes to former NBA players or other former professional athletes, which is why he now spends much of his time talking to the younger generation about their history so they can avoid making the same mistakes. .
Why are so many former NBA players going broke?
According to Sports Illustrated, a staggering 60 percent of former NBA players file bankruptcy within 5 years of retirement, which is actually not particularly unusual among former professional athletes. Here are some of the most common reasons behind this problem:
Professional athletes tend to have expensive lifestyles. In Walker’s case, he was spending large sums of money on fast cars, expensive jewelry, and pretty houses, which is not particularly unusual among people who have suddenly acquired great wealth. Furthermore, it is interesting to note that Walker was also spending large sums of money on other people helping them move into new homes and assisting them with all kinds of matters, which, again, is not particularly unusual among people who have suddenly arrived. to great wealth.
Unfortunately, the high amount of consumption by professional athletes means that unless they can keep making money at the same rate, they are doomed to burn out without making serious changes to their lifestyles. This is particularly troublesome for them because they tend to have much shorter income periods than other celebrities, unless they can successfully transition into some other field like music and film, which is quite rare and extremely rare.
Trust in investment “professionals”
Naturally, most professional athletes are smart enough to put their money into investments, which are designed to generate enough income for them over the course of their retirement to support them in the way they have become accustomed. Unfortunately, earning enough from investments to do that is much easier said than done for the simple reason that investments with higher rates of return also carry higher levels of risk.
Since most professional athletes lack the experience and expertise they need to make the right investments, this makes them totally and utterly dependent on those they choose to look after their financial interests, especially since most professional athletes also do not. they are interested in collecting that expertise and experience as they go along. In this way, they are not particularly different from most consumers when it comes to investments, but it affects them much more due to their need for high income due to their high expenses.
Finally, it is important to note that professional athletes are popular targets for malicious people seeking to enrich themselves at the expense of others. In part, this is because professional athletes are so dependent on those they have chosen to look out for their financial interests, which means that there is much that such individuals can do to abuse the trust placed in them.
However, it should also be noted that professional athletes’ lack of understanding of business, generosity in distributing their money, and their continued need for high income after retirement make them particularly susceptible to scammers, who they often succeed in making outlandish promises about rates …