I was reading through some news yesterday and I came to this report about Allen Iverson’s financial woes. After reading through this, it wasn’t something that shocked me at all.
In fact, it is so common that athletes have financial issues that none of this is surprising. But despite all that, I have friends who keep telling me that the athletes are dumb for losing all the money.
But it’s not that easy. Realistically, the problem lies within the system that professional athletes are never taught how to handle so much money.
Whether an athlete comes out of high school or college, were there actually any courses that offered them teachings on how to handle millions of dollars? The leagues have tried to mandate rookie camps to help these athletes, but there aren’t really any kind of strict help guidelines afterward.
Athletes that are not used to large amounts of money don’t know how to handle their finances — especially people from poorer neighborhoods. Some of them save up. Others just spend. Some of them like to hand out money to family members while others allow “friends” to leech off of them.
So many times I have heard stories about athletes going broke because they just never were taught how to handle big money contracts. There is no one there to tell them when to spend and when to save.
Some athletes feel that there is an obligation that they have to give back to the people they feel has helped them along the way. But some of those people are bad influences. And it’s hard to turn away childhood friends sometimes.
I’d imagine that even though I grew up with a decent life, I wouldn’t know how to handle millions of dollars. It’s just not something I’d think I would know how to do. And I am sure that people will start showing up and asking for money.
These athletes deal with that all the time. And for athletes like Iverson, sometimes it’s too late before they learn.
I am not saying that Iverson is totally in the clear. He should know better when to not spend all his money. But somehow, I also have to look at the system in place and see that without any real methods of teaching these athletes what to do with their contracts, we have more and more issues like this.
We just can’t expect every person that’s given a million dollar check to know how to wisely spend it.
** I would like to think the solution is simple, but it’s not. Leagues can’t make classes to these mandatory. There isn’t a set structure right now that can make it easier. These athletes don’t get paid in college so they don’t know how to handle themselves while being stars. There’s no preparation. And when they get to the professional level, they are overwhelmed with the dollar signs.
Sometimes these college athletes resort to NCAA violations in accepting gifts and so forth because they are at the stage where they need to have some money to handle their success as college stars. But since there are no such classes like “Successful Athletes Financial Planning 101”, what are these athletes to do?
The agents, the coaches and family members all need to chip in and help get these athletes on the right path. But at the same time, these athletes are not put in any situation that would allow them to succeed with their finances.
Some get lucky and handle their money well. And for some other athletes, they’re not so lucky.