March 25, 2023

Managing Money Is as Important because Making It: The Sad Case of Athletes Going Shattered

Inept administration of finances is the easiest strategy for losing wealth.

Lacking a solid team is a recipe for company failure, and those intending to excel in business— or any various other sector— must invest in management. Considering that many professional sports athletes encounter bankruptcy shortly after retiring, they are a demographic which could greatly benefit from quality economic management teams.

Elite sports athletes earn millions of dollars during a limited time, but few succeed from multiplying their earnings to generate wealth. An investigation by the  Global Financial Literacy Center   found that 16 percent of National Football League (NFL) players declare bankruptcy within twelve years of retirement. Quite surprising is that some athletes record bankruptcy as early as two years right after retirement.

The final results of the study also showed that NFL stars were just as likely to experience personal bankruptcy as other NFL gamers. Bankruptcy figures are equally daunting for basketball gamers.   Research   reveals that National Basketball Association (NBA) gamers who file for bankruptcy do so inside 7. 3 years after pension, and 6. 1 percent of most NBA players go broke within fifteen years of exiting their profession. The emotional trauma of bankruptcy can lead to distress. Research indicates that will 78 percent of NFL players experience financial problems two years after  retirement .

Inefficient management of finances is the easiest strategy for losing prosperity. Professional athletes can avoid financial calamities by investing in a much better management team. There is a stark difference between managing a younger athlete and managing a superstar who earns millions of dollars yearly. A professional who manages a junior athlete could be an superb manager for a player at that stage, but the changeover to elite status needs people with greater expertise.

In business, a manager should possess the relevant skills. They don’t have to be your friend. Elite athletes need elite managers to help them get around stratospheric wealth. If a supervisor doesn’t have expertise in controlling successful athletes or companies, then he is unfit to manage an elite athlete. Athletes whom succeed at expanding their own empires are reluctant to rely on the services of amateurs.

Magic Johnson credits his success to investing in capable people rather than to the “ wisdom” of family members and old friends. Pablo S. Torre paints Manley as a serious  business person   in a piece highlighting the failures of professional athletes:

Johnson started out by admitting he knew absolutely nothing about business and wanted counsel from.  .  . men such as Hollywood real estate agent Michael Ovitzand and Peter Guber. Now, Johnson says, he gets calls from star players “ each day”.  .  . plus cuts them short when they propose relying on family and friends.

Johnson’s technique is even more relevant in light of the recent financial scandal involving the disappearance of more than twelve million dollars held by sprinting legend Usain Bolt in Jamaican  investment   firm Stock and Securities Restricted (SSL). Venting to reporters, Bolt’s attorney Linton Gordon argues that the Financial Services Commission rate (FSC) should be held responsible for the mishap because the agency lapsed in providing proper oversight:

They should bear responsibility to some degree, if not entirely, because all of the along they kept quiet and did not alert the public, including Mr. Bolt, to the fact that the company was not operating in ways compliant with the law. It’s 10 years now they say they have been red flagging this company. Acquired he known that he could have withdrawn his money and would not have lodged any longer.

Blaming the regulator is easy, but the debacle reveals deficits within Bolt’s management team. Usain Bolt did not need to know that SSL was deemed  unsound   years ago because his management group should have furnished him with this information. Some years ago, I was at an event where fellow investors argued that SSL was irredeemable. Bolt’s managers were out of the loop. Moreover, Jamaica is known for  institutional   some weakness and  fraud , so it’s a bit weird that a man of Bolt’s stature would have so much money kept in a Jamaican institution to begin with.

Some declare the FSC must be responsible for the misappropriation of Bolt’s money, but the FSC composed a report that Bolt’s supervisors would have seen if they had been doing research. Moreover, inside a country where agencies are often compromised by  politics , there is a possibility that this FSC did not suspend the particular operations of SSL because it was constrained by fake actors. Bolt’s managers should have shown some insight by recommending that the superstar restrict his Jamaican investments and by soliciting the services of leading wealth management firms like UBS Wealth Management or Baird.

The case research of Usain Bolt shows that even athletes with good managers should never hesitate to upgrade when their particular employees are not equipped designed for bigger challenges. Money is hard to make, but with a bad supervisor, it’s easy to lose. Therefore , sports athletes interested in keeping their money must invest in the right group or face the consequences.

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