http://blogs.wsj.com/economics/2015/04/14/one-in-six-nfl-players-goes-ba...
Sad to see so many people who earn good money for at least a few years don't understand how to take care of it. How important it is to stay in college as long as possible and that NFL jobs are not lifetime jobs.
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I'm not trying to be a cynic here, but I'm honestly a bit surprised it's not higher than 17%
But to "retire" you have to meet the requirements to even get to that point. Depending on the source I've seen one season on active roster or three. Not sure what it currently is, not a subject a lot of players or writers want to talk about.
To be fair I'm four years into college and the only money management I've learned has been from my parents, and Boy Scouts, Virginia Tech hasn't directly taught me anything about money management. Many if not most NFL players weren't as privileged as I was growing up and so they didn't have the lessons that I had because their parents probably weren't around as much as mine, and probably didn't know as much about money management as my parents do. Also, if you're not taught to be thrifty, pop culture takes over the same one that teaches kids to spend money and not be thrifty because that makes you look poor, which is something that our culture shames.
I took a class at Tech, I think called Personal Financial Planning or Family Financial Planning or something along those lines. I think it would be a good idea to make it a 1 credit hour required course, can even be online only. It was really helpful with budgeting, planning for the future, etc.
I'm pretty sure all Engineers have to take Engineering Economics. While it doesn't teach financial responsibility, it does go over the basics of understanding savings and interest over time to help realize value of current money in the future. If used outside of a business perspective, it's very effective for personal financial planning.
But after your short NFL career you would have a degree to fall back on.
Or you could still leave early, get a fat contract before possible injury, don't blow it all on silly investments, and then go back to school if you feel you need a professional career in a field that requires it.
How often do you think that happens? I believe last year not even all players who left early got drafted.
Edit: 36 didn't get drafted last year.
http://www.cbssports.com/collegefootball/writer/dennis-dodd/24559565/lea...
I don't think you should leave early unless you know you're going to be drafted and stick to a team, I dont know what those 36 were thinking
I think getting better financial advise is what's needed, not necessarily staying in school for every case. The bankruptcy isn't from making so much money, it's the lack of preparing for the eventual drop off in income. And I feel like going from even the NFL minimum to an average bachelor's degree salary is like jumping off a bridge into a puddle and saying "well, at least it wasn't just pavement"
and are you then paying for your education? if you just filled bankruptcy and your not on scholarship I would imagine your not going to be able to afford to go back to Virginia tech and I doubt youll see many ex NFL players in community college.
Some schools still honor their scholarship. The bigger point is most, not all, players should be waiting around in college as long as they can. Also getting sound financial advice is a must.
Not if you went to UNC.
Same here with how I learned money management from my parents then I took things upon myself at took personal financing classes outside of college to prepare for all the decisions we face as adult and money.
My opinion, based on how society is today, I believe the format of our education could offer more flexibility for students in the high school. Along with the core classes, students should also be taught personal finances, basic maintenance skills, and job seeking development course. These skills are lacking and could be really help develop student transition to the real world at a younger age.
There needs to be a high school level class on the basics of financial management to include budgeting, how debt works, and the very basics of investing. Colleges should require a slightly more advanced course.
I think all high schools should have a mandatory money management class. I have heard mine does now.
I thought that this was a thing for Virginia. At least that's what my school told me my senior year. We had a week long set of seminars that were about 2 hours a day about finances and other "adult" things like how the law changes when you turn 18. The latter wasn't said to be mandatory but the former was supposedly mandated by the state.
I graduated high school in 2007 and we didn't have any kind of finance class offered.
I'd like to see a 1-2 hour finance course that prospective students are required to take, that review the "finances" of higher education. A huge number of students are graduating with student loan debt that they'll struggle to pay off. Many of them went to private schools or attended college out of state, so they are generating $30K or more of debt, each year, for 4 or more years. Unless they are entering careers like engineering or IT, their salaries simply won't support paying the equivalent of a mortgage payment while trying to also pay for life expenses like rent.
Look at the lower half of this salary table and think about trying to pay $850/mth ($120K @ 4% over 15 years) for student loan debt before you pay for food, rent, utilities, etc.
Salary Table by Degree
Which is why more and more students need to know about things like Income Based Repayment plans for federal loans. They will help you to pay off your loan at a rate you can actually afford and even offer forgiveness incentives. Yes, you will take longer to pay it off and yes you will pay more in total due to interest over the life of the loan. Also, yes, it will increase as your income increases, but you aren't forced to hand over most of your take-home pay to cover a loan payment. More Information Here
Agreed. The scary part for many students is that they are taking private loans, for out of state or private school tuition, which don't have features like Income Based Repayment plans, but carry the same commitments (e.g., they can't be expunged via a bankruptcy filing).
Sad to read about. Luckily my parents taught me growing up to always pay yourself before you pay anyone so even going back to my paper route and lawn mowing days I always put some away for a rainy day. Now I have had a few economic setbacks over the years (spelled wife and kids) but I still save some from every paycheck, even if it is only a little because you never know when you might need it. I would think they would have planning for the future 101 as part of the annual rookie forum?
I thought that there was a financial management component to the rookie forum before each season.
My concern is, what about the agents and the like that have their hooks in these kids before they even get to the draft, let alone the rookie forum? I get it, these guys are adults and responsible for their own decisions coming out of college, but "being an adult" doesn't necessarily you know how the world works in every way. They have a ton of people whispering in their ear about "investment opportunities", and unscrupulous financial advisors (interesting story, the Professional Athlete division for Northern Trust in Phoenix is located a couple of floors up in my building. Working here for 7 years, I've developed conversational relationships with a few of the consultants there when I see them in the elevator, parking garage, etc. They all seem on the up and up, but some of the horror stories I have heard about some in that industry just strip these kids of as much monetary value as they can with their suggested financial "management")
I've actually had this discussion, and it's the one class I think should be taught in school leading up to college above many things. It is probably the most useful class you can take that actually applies to everybody, and something you'll use the rest of your life.
I really think the NFL should require all rookies to attend a class with a Certified Financial Planner to cover with them how to save. It will be up to them to save, but force them to at least take a class to talk about after.
I'm pretty sure they do that now.
http://www.benefitspro.com/2012/09/26/nfl-financial-advisor-program-help...
But as the article mentions, this isn't a fix all. One of the hedge fund managers the NFL had on their Approved list of advisors was convicted of 47 cases of fraud, for example.
Wow. They are so incompetent
You could probably find the same statistics on lottery winners who won between 1 and 10 million. I hope not if you won 100 million in Powerball but who knows. People can't manage money regardless.
As they say, most people only know to live to their income. If they make $20,000 a year, they will usually spend it all. If the next year they make $10 million, they will usually find a way to spend it all. And they will keep doing that until they are back making $20,000 a year.
The difference is NFL Players especially players who leave early had a chance to make life altering decisions while someone else was paying for them to enhance their life, by getting a degree.
These guys aren't recruited to get a degree, they're recruited to play football. The head of the math department doesn't come to their home. So for many of these guys college is minor league NFL. They get coaching "taught" to mold their craft, room and board, the college sells tickets and tv rights. The colleges enable these guys in many cases to stay eligible, and are complicit in just being a minor league farm system to the NFL
This article says that it is 80%, scary stuff
http://blog.futureadvisor.com/nfl-players-must-go-long-on-retirement/
When I worked in the exec offices for the Redskins we had a 3 day symposium for all rookies (required) and anyone else who wanted to come on life IN and AFTER the NFL. It was a life course on NFL rigors, celebrity, and with a lot of financial guidance.
One of the things we stated was "Get 2 accountants and 1 really good lawyer. One accountant for you and the other to watch the other accountant." The lawyer goes without saying...
For anyone interested in this subject with 80 minutes to kill, the Broke 30 for 30 is a fantastic watch.
Yes, recommend this, it's very interesting.
Advice straight from the horse's mouth
Not to get on a soap box, but an overwhelming percentage of Americans graduate from high school (even college) not knowing how 401k's work, how insurance works, how to file taxes, apply for loans, write a resume, etc. Typically, this stuff is never taught in high school, unless your school offers business specific courses.
This issue is further compounded for NFL players given their typical demographic: Athletes from lower class families suddenly get everything free when they go to college, then go to the NFL making minimum of 6 figures annually without any understanding of how a basic savings' account works, much less retirement savings or insurance. They go through college without building a resume/cover letter/interviewing, so they have no idea how to apply for a 'real' job (in the event their career doesn't work out).
While I don't think a change in high school curriculum would largely curb NFL player bankruptcy problems (which are largely the result of the unusual socio-economic path players take to the NFL), I do believe it could make a small difference for professional athletes, and a large difference in the rest of the country.
The smart ones buy or rent a reasonable home while in the NFL and save every scrap. John Engleberger.
Those are the smart ones... the not so smart one's don't even know how to deposit a check (literally - this was mentioned in the documentary Broke)
A great example of this lack of knowledge was in the show Hard Knocks (first time they were at the Bengals training camp). Marvin Lewis had to explain to Chad Ochocinco how a simple savings account and interest works.
The season that the show went back to Bengals camp, Gio Bernards' teammates were making fun of him for driving a beat-up old minivan. In ten years, he'll have the last laugh.
True. I mean, college athletes aren't even differentiated from regular college students here:
This graph from the article says it all. It's a huge sum for 3-10 years. You buy a huge house, you buy a Maserati or two, you eat at expensive restaurants, and you have money left over, so you buy your mom a house. When the NFL career ends, you go back to making 30-100K + annuities. But you still have a mortgage for a huge house, a mortgage for your mother's house, and car payments for your Maserati. However, your annual income better fits a moderate detached house to share with your mom and a Honda Accord.
The major problem is not that NFL players do not know how to save, but they have to learn to NOT live a life of luxury during their NFL career. They're making hundreds of thousands, to millions per year. However, to prevent future bankruptcy, they must live on ~1/4 or so of their actual income.
And then you read the story about the millionaire pro baseball player who lives in a van down by the river...
http://www.theplaidzebra.com/21-year-old-pro-baseball-player-vw-camper-v...
I've seen this story before, it makes me want guys like that on my team.
My wife was going to be able to go through all high school and 11 years of university undergraduate and post graduate to achieve her doctorate without having once taken an economics class of any kind, until I found out her last year of undergrad and made her take a basic economics class.
I just found that amazing, not so much of a basic household economics or intro to ec or anything.
to be fair my intro to Economics course at VT was highly disappointing and nothing close to useful. Big lecture hall with too many distractions and a prof just getting the lessons done.
My Real Estate course on the other hand was one of the most informative economics class I had. People complained the professor was too old and had too many tangents but that dude would explain precisely how he made bank in real estate and how to use money to make money. You just had to listen and ask the right questions. What made it hard though was he tested from the book which he NEVER taught. haha..
Engineering Econ was so basic that I was floating a 100+ average (yeah they gave bonuses) going into the final. When I asked if I could skip the final they told me no. As it would have dropped my grade an whole letter, I spent the 23 minutes required to complete the final.
To be fair the introductory economics classes are so basic it's ridiculous. I took ECON 2005 and we spent the first couple weeks of the semester learning how to read graphs and calculate slopes. Then the whole class boiled down can you figure out where two lines intersect and can you remember a couple definitions.
I don't really see how those classes can help with personal finance at all.
They let us skip the final in 03. I remember not taking it because I would have had to score a 98 to improve my solid B average to even an A-.
I spent that time studying for another final in my dorm.