Why Athletes Lose Their Millions

While Curt Schilling, Mike Tyson and Allen Iverson are all known for their great athleticism at the pinnacle of their respective sports, these star athletes also made and lost fortunes.  Unfortunately, they are not alone.  It is all too common for superstar athletes to earn millions of dollars from their contracts and the attendant business and merchandising opportunities only to have their wealth vanish. 

According to experts who have conducted extensive research on why athletes lose their fortunes, “there are three key reasons why [athletes] can go from top earners to flat broke in a very short timeframe: overspending, poor and exploitive financial advice, and an insidious combination of the two.” 

Athlete overspending is a reason that attracts the most attention from the media.  What at first may seem like a never-ending supply of money soon leads to over extending oneself on cars, jewelry, houses and other highly-visible and highly desirable symbols of wealth. 

Although overspending leads athletes down a slippery slope, it is not the primary reason why the majority of professional athletes lose significant wealth.  Unsound or intentionally deceptive financial advice is a precursor to many of the problems plaguing high-earning athletes.

With some advanced planning expertise and a team of attorneys, most athletes can prevent the derailment of finances that can occur so quickly.

See Russ Alan Prince, Why Star Athletes Lose Their Fortunes, Forbes, Sept. 23, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.