Posted on 04/16/2015 5:20:28 AM PDT by SeekAndFind
The stat comes from a new paper from the National Bureau of Economic Research.
It may be hard to believe that professional athletes, who earn so much money at such a young age, could possibly end up bankrupt. But nearly 16% of those in the National Football League dojust not right away.
According to a new working paper from the National Bureau of Economic Research (NBER), 15.7% of NFL players have filed for bankruptcy 12 years after they retired.
The paper, entitled Bankruptcy Rates Among NFL Players with Short-Lived Income Spikes, examines the traditional model of consumption smoothing (save money when income is high for later on, when income is low) in the context of athletes, who undergo what is really the opposite income path of most people. Athletes hit their earnings peak almost immediately after school, while young. Then they retire young, and in the vast majority of cases, never again earn at the same levels. Because of that model, it can be difficult for them to save. They are often taken advantage of financially, or simply havent had any guidance preparing for managing their money after retirement.
NFL players have an income profile, says a précis to the NBER paper, that does not just gradually rise then fall, as it does for most workers, but rather has a very large spike lasting only a few years. The paper uses data on all players drafted to NFL teams from 1996 to 2003. The data finds that bankruptcy filings begin very soon after retirement (but just 1.9% of retirees have filed after two years) and continue at a substantial rate through at least the first 12 years of retirement.
(Excerpt) Read more at fortune.com ...
Indeed. ONLY 16%? Perhaps its a narrow definition of those who literally file for bankruptcy protection. I would assume its closer to 50% who wind up spending every cent they ever made
Now, $40 K a year is good money, especially if you have another job, but it's hardly a life changing sum. You can't buy expensive cars, big houses, recreational drugs, and expensive dinners out for the rest of your life on it. Yet, it seems like that's what most NFL players become known for. I'm surprised the number is as low as stated in the article.
There was a saying when I was a kid ... “easy come, easy go”.
Welcome to this Obamanation. Thanks for your help.
The lawyer responding to the criticism of the player for not giving his mother enough to get off welfare said the general public knew very little of the spending habits of pro players. He said a great many of them spent every last penny they earned as soon as they got their money. No thought for tomorrow much less when they retired.
That’s an improvement from the last wave of numbers. Used to be around 30% in 5 years, half that in more than twice as long would seem to indicate their rookie symposiums on how to manage their money and life could be having an effect.
I think I remember Dave Ramsey saying he was involved in this.
Thought you might enjoy this...a few years ago we had a serious discussion in my parish as to if it was a good thing to give money to those begging/panhandling..usually for food on street corners..some felt that even thought the money was likely going to drugs/alcohol..it was still somehow our obligation to give. I never give to beggars..I donate to food pantries and the like. Our priest suggested this experiment..as they’re mostly found at major intersections..maximum traffic...and there is almost always a fast food place on one or more corners..he said don’t give them money..but tell them to meet you at, say, the McD..and you’ll buy them a meal, and talk to them while they eat and see if you can help....he gave us print outs of all the social service and outreach agencies for the homeless in the area..I did it for 30 days...and kept score..I made the offer to 83 men, 28 women...10 men accepted...12 women did..I think I might have helped a few of the 22 I met with..gave them info on shelters..and money for bus fare..but overall it shows you that the vast majority aren’t really “hungry”..at least NOT for food..
They should also have to take a class by senior year of hs about free-market economics and how it has benefited the world and made America great.
Amen. I could foresee a big problem though in that there would not be enough people available who could teach the needed courses. I took a course several years ago at one of our local junior colleges on economics. Taught by a Vietnamese fellow who had taken $25 given to him by his parents when he was a teen and turned it into a substantial amount of money by bottling and selling orange juice. Best teacher I ever had and certainly a whole lot better than any I had through my 6 years of college. Interestingly this instructor did not have a college degree of any kind so he would not be permitted to teach in the public school system. Life’s lessons are often the best teachers.
N***er rich
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