Inside the NFL’s Riches-to-Rags Stereotype

If there’s one thing pro footballers are thinking about during their career, it’s how to maximize their performance and minimize the risk of injury. Financial literacy isn’t usually part of their day-to-day career—especially not when there’s a 300lb cornerback staring them down.

Around the world, elite athletes make handsome salaries for their skills. Not only are they heroes to the general public, but they have the potential to become legends. There’s plenty of risk and reward, equally, regardless of the sport.

So why do many athletes from the NFL end up going broke shortly after retirement? Athletes like Antoine Walker, Warren Sapp, and Vince Young blew through millions. In the case of Sapp, a full $108 million disappeared.

The answer is simple: there’s a lack of financial awareness and education. Following demanding careers in the NCAA, most NFL players don’t have experience handling huge salaries. In fact, it’s a common issue for any person, pro athlete or regular worker, to know how to manage huge fortunes.

For example, lottery winners often find their lives turned upside down by multi-million-dollar wins. Some advice on how to handle a jackpot win includes hiring financial professionals and figuring out tax positions, which is more than some of the NFL’s most promising athletes have done in the past.

Let’s break down the three key reasons that some of the NFL’s most beloved and competitive athletes went from rags to riches… and then back to rags.

Money Management

Most athletes won’t spend their lifetimes playing a sport, especially not in a field as demanding as American football. Baseball players may enjoy longer careers, along with a few lucky basketball and soccer stars. But NFL players on average spend only 3.3 years in the league.

That means all the money they made in their short and lucrative career should be managed closely and funneled toward future endeavors (more on this below). Top players can lose hundreds of thousands, if not millions, to back taxes and other salary-based fines.

Meanwhile, most spend exorbitantly when they see their first paycheck. Many opt for luxury cars and mansions without paying any thought to a savings account. In reality, NFL athletes should be looking into tax strategies and investment while mitigating the number of hand-outs they give to friends and family.

Expensive Taste

As mentioned above, most athletes are excited to be able to spend exorbitantly on themselves as well as those they love. After all, it often takes a community to foster an athlete’s rise—why not pay them back?

One financial advisor with a specialty in athlete asset management, Amy Fontinelle, believes one huge factor in unrealistic spending is age. Most NFL players enter the league in their early and mid-20s, which means many lack the sort of long-term vision that’s necessary to manage six and seven-figure salaries.

A Lack of Long-Term Plans

One great example of how to manage money in the NFL is quarterback Patrick Mahomes. Last year, he made headlines for earning the biggest contract in NFL history: a ten-year term with the Chiefs worth a total of $503 million.

But Mahomes isn’t like other athletes. His father was a professional baseball player, which means he’s no stranger to managing a future on a short-term salary. For this reason, Mahomes has a leg up on other athletes with massive salaries, as he can rely on his family for advice.

The vast majority of NFL players aren’t so lucky. Most lack a long-term plan. These shouldn’t just look to save earnings and increase them through savvy investments, but also build out a future job for a player. Most look for work as consultants, broadcasters, and entrepreneurs related to football, with many finding success.

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