GOAL!
The Financial Physician™’s
Ultimate
Survival Guide
for The
Professional Athlete
Copyright 2011 Mitch Levin,
All rights reserved.
Published in eBook format by eBookIt.com
ISBN-13: 978-1-4566-0228-4
No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems, without permission in writing from the author. The only exception is by a reviewer, who may quote short excerpts in a review.
Preface
By Mitch Levin, MD, CWPP, CAPP
Sitting in Southern California on a beautiful spring day with several financial advisors who are "old jocks" at heart. We're talking about how sad it was that the journeyman athlete suffers financially. Unlike most careers, the professional athlete earns his or her highest income in the earliest years of your life, and this money usually has to last the rest of your lives. But even though this is directed toward the journeyman athlete, there are famous numerous numbers of athletes who are earning substantial amounts of money and still wind up in financial trouble. There have been books written for celebrities; there have been books written for executives; there have been books written for surgeons, but to our knowledge, there has not been a book written specifically toward the professional athlete. Now I know that the Tiger Woods of the world and the Michael Jordans of the world aren't going to read this book. They're not going to need this book. They have so much money and probably have such great advisors that they'll never be poor. Unfortunately, for the rest of us, that's typically not the case.
Example: Evander Holyfield's child support causes financial problems. The boxer has 11 children and has a $10 million dollar estate that went into foreclosure in 2008. Joe Louis, Mike Tyson, Muhammad Ali - does that sound familiar? They all had financial problems. In fact, Mike Tyson lost almost $400 million dollars. Louis spent his final years running from the IRS. (Maybe it was Mike Tyson squandered $100 million dollars.) So if you're an athlete, get yourself educated. People like Bill Cosby and Oprah Winfrey don't go broke because they make sure they understand where their money is going. If you're an athlete, spend far less than you earn. Your life should be profitable and you should run your financial life like a business just like everybody else.
Scottie Pippin, who was known more for his on-court defense than his off-court business sense, has lost $120 million dollars in career earnings due to bad financial planning and bad business ideas.
Holyfield, who made over $250 million dollars in cash during his boxing career, had a $20 million dollar house of 54,000 square feet.
How about Lenny Dykstra, former baseball star? He had failed car washes, a magazine company, real estate investing, and a stock trading website. Yet, he owed more than $30 million dollars to creditors including $18 million on a house he purchased from Wayne Gretsky.
Latrell Sprewell. He turned down a $21 million dollar contract because he said it wasn't enough money to feed his family. He made over $96 million in his career, but lost his million and a half dollar yacht after the U.S. Marshall seized it for defaulting on the note payment. His $5.5 million dollar house went into foreclosure in 2008.
John Daly. He gambled away $50 to $60 million dollars in career earnings. He had his $1.6 million dollar house foreclosed on.
John Clark. He used to own 18 luxury automobiles including a $700,000 Ferrari and a Rolls Royce. He couldn't make those car payments. He had one of the most publicized bankruptcies in baseball.
What about Eddy Curry? He's currently earning $10.5 million dollars a year. He pays $6,000 a month to his personal chef, $17,000 per month in rent, $30,000 per month in household expenses. He gives his parents and his father-in-law $16,000 a month and has seen 12 of his cars driven off by relatives. In the year 2009, Eddy Curry asked his boss, the New York Knicks for an $8 million dollar advance to help with his financial problems, but the team only gave him $2 million dollars. He also sued a former agent for mishandling his money. His mansion is in foreclosure and he's borrowed almost $4 million dollars against the house already.
Or how about these statistics? The average salary in the NBA is over $5.5 million dollars yet an estimated 60% of players are broke within five years after retiring. Seventy-eight percent of NFL players are bankrupt or under financial stress because of joblessness or divorce within two years after retiring. Many baseball players struggle financially after retiring. In 2009, ten current and former baseball players, including Johnny Damon of the Yankees, Jacoby Ellsbury of the Red Sox, Mike Pelfrey of the Mets, Scott Eyre of the Phillies discovered that at least some of their money was tied up in the $8 billion dollar fraud allegedly perpetrated by Texas financier Robert Allen Stanford. In fact, Pelfrey said that 99% of his fortune is frozen. Eyre admitted last month that he was broke.
So why do things go wrong? First, of course, is the lure of the bright, shiny objects. Don't spend too much money too quickly. You should pay yourself first, and at your rate you should be saving a substantial amount of money. Live like the top 1% of the country, which is the top 0.1% of the world, and live on $350,000 a year or about $30,000 a month. Save the rest if you're making millions of dollars. If, on the other hand, you're not a super athlete and your earnings are more pedestrian on the order of a million dollars a year or a half-million dollars a year, or even $3 million dollars a year, save at least 20 to 60% of your income after tax.
Misplaced trust: There is an entire chapter on trust in this book. I think you'll find it fascinating.
Try to stay married and try not to give too much to your family. Even though they helped you get where you are, you do not owe them your entire life's work. Not only that, you cannot help them if you go broke.
Because your earnings often end earlier than you expect them to end, and you naturally have a short life span of these high earnings, and you've probably given up a lot of your educational opportunities to get where you are, it's absolutely in your best interest to retain as much of your hard earned living as you possibly can.
Let's talk about a little real estate fraud. Former Phoenix Sun player, Grant Gondrezick pleaded guilty to mortgage fraud charges related to transactions involving 24 homes in the suburbs of Houston. He faces up to five years in prison and fines of $250,000 and more than a million in restitution. Houston Rocket, Dirk Minniefield was also charged in the case. Chicago Bulls point guard, Lindsey Hunter was a partner in a company that was investigated by the FBI for mortgage fraud. Former Denver Bronco and New York Giant wide receiver Arthur Marshall was indicted on 22 counts of mortgage fraud and money laundering.
These are some of the reasons why we've decided to write this book for you. When you read this book, you'll learn the secrets to protecting and preserving your wealth for a lifetime, to achieve your financial goals so you can help yourself and help the ones you love. When you read this book, you'll get all kinds of real-life, down-to-earth information with opportunities to contact each of the authors directly and personally. When you read this book, you'll learn how to be certain that you'll never be poor. When you read this book, you'll wish you had read it earlier and you'll likely want to give it to as many of your friends as you can.
You've worked hard to get where you are. The odds were against you from the beginning. Think about this - just getting on to the high school varsity team, whether it was women's golf or men's football; whether it was wrestling or swimming at Indiana; whether it's hockey in Minnesota or lacrosse in Maryland, you had to work hard to get on to the team. And once you were on the team, you had to work hard to stay on the team. You had to navigate the politics of your other players. You had to keep yourself in good financial condition.