"Why Athletes Go Broke"
Capital Investments and Wealth Preservation
In this world of uncertainty and financial dynamics, investors need sound capital management and investment strategies.
We are orientated toward professional athletes given their unique earnings profile. Athletes have their strongest earning's power soon after they exit college. This is a time in their lives when they are young. As recent 'cash-strapped' college students, they experience an extreme change in their financial situations - finding themselves with lots of money. In most cases they earn significantly more money ($millions more) than they or their parents have ever earned. To add to this volatile mix, they operate in a highly volatile profession that requires extreme confidence and high risk taking. Competing in sports at a world class level requires great confidence and a 'go-for-broke' mentality. If this aggressive approach is carried over into managing finances - we have a recipe for disaster. Youth, lots of money, high risk mentality - there is no wonder so many athletes 'go broke'.
There is an answer. You don't have to be Michael Jordan or Magic Johnson (athletes who earned at the top of their sport and supported by long time apparel endorsements) to preserve wealth. Both made smart investment choices - but let's be honest, these two made much more money than their teammates and played for many more years.
The answer is - to simply counter the highly volatile and uncertain sports business with solid, sound moderate - risk investments and capital preservation strategies. This includes combining highly predictable, boring investments with, evaluating life decisions that significantly affect a player's wealth. This approach has a long-term focus. The challenge will and always has been convincing our clients that the 'sexy', quick hitting investments that salesman make sound sooooo great - should in mostly all cases be avoided. Anytime a pitch involves "the next Apple", "Google" or "can't loose", "can't miss", "the smart money" and so on - the athlete/investor should politely but quickly run the other way.
As a son of a professional athlete and financial professional for over 20 years, Craig has heard it all and seen it all. Although challenging, breaking the cycle of athlete 'bad money managing' is possible with the proper approach.
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