Financial Problems of Athletes

Today's professional athletes enjoy luxury amenities while traveling and generous hospitality and entertainment perks while in their hometowns. Surprisingly, even with multimillion dollar, long-term contracts, numerous athletes file bankruptcy during their careers. From the negative consequences of quarterback Michael Vick's personal choices to the unforeseen historical economic downturn that forced wide receiver Rocket Ismail to lose millions, practicing safe spending habits and making conscientious monetary decisions enables individuals to retain income into retirement.

Poor Budgeting

Coming into a significant amount of money at a young age brings unrealistic expectations for future earnings with it. Some athletes fail to prepare a reasonable living budget that includes sound long-term investments, preferring to buy frivolous and luxury goods.

Bad Investments

Seeing as how they receive large amounts of money within short periods of time, athletes are prime targets for greedy, untrustworthy people searching for investors. Athletes will sometimes neglect to conduct substantial research before committing and signing legal agreements to invest in real estate, a new music label, clothing line, fragrance company or restaurant. They fail to research the person bringing the offer to the table to see if past ventures have been successful, or to check out the marketplace for the type of product or service being suggested. Others don't always know how their money is being used or who is controlling it.

Short Careers

An athlete sometimes neglects to take into consideration the likelihood that his career will be relatively short. A sports team is a business, and the people who run the business can decide to replace a player at the end of a contract. Likewise unfortunately, any athlete can get an unexpected injury that permanently altars his career. Some athletes will go bankrupt shortly after their playing days are over because they have made enormous splurge purchases that continue to cost money. For instance, an athlete might buy a mansion without considering that landscapers and pool maintenance staff, housekeepers and drivers all demand monthly salaries. A house that requires a million dollars a year to maintain is going to outlast a five-million dollar contract in five years.