SportsProf

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Friday, July 30, 2010

NFL Rookies and Their Money

This article in USA Today talks about how the NFL is trying to teach its rookies how to be careful with their money. The simple truth is that these are young men with a lot of money, and, as such, become targets of people who want it for all sorts of reasons -- many of them bad, even if well-intentioned. I had read somewhere (perhaps it was in the Sports Illustrated article last year) that someone -- and it might have been Torii Hunter, the centerfielder for the Los Angeles Angels of Anaheim -- invested about $80,000 in a company that was designing a floating sofa for people who lived in or near flood zones. Just because these players have come into a lot of money at a young age doesn't mean that they know what to do with it or, alternatively, that they are destined to do stupid things with it.

What's the answer? To those "elders" who try to give advice to a young player not to take his entourage to the local Louis Vuitton outlet and blow $60,000 on stuff that the consumers won't appreciate 10 minutes after buying it, my guess is that the player might answer, "well, it's a free country, and I owe these guys, they've had my back since first grade." What do you say to that? How can you make putting 80% of the signing bonus into a variety of no-load mutual funds at The Vanguard Group, to buy only one car (and not spend $100,000 on it), to rent, and to live modestly.

As the article says, "NFL" means "not for long", as most careers are very short. Most players will not make enough money to retire on, let alone to live for a year or two after their careers are over without a job.

Read the whole thing. It's instructive about how easy it is to throw away money and how many people there are out there who will help you do just that.

Let the players beware.

And, remember, if you're a player or someone close to one, this -- the word "no" is the biggest stress reliever.

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