When most California residents think about the lives of professional athletes, it is the fame, glory and wealth that immediately come to mind. Players can earn incredible salaries during the course of their careers, and many also amass a great deal of wealth from endorsements and appearances. It may be a surprise to many to learn that a high percentage of these players will file for personal bankruptcy in the years after they retire. That fact demonstrates that anyone can encounter financial difficulty, no matter what level of success they may have achieved.
In regard to players with the National Football League, it is estimated that as many as 16 percent of players will file for bankruptcy in the first 12 years following retirement. The reasons behind that statistic are varied, but there are certain factors that all professional athletes share. One involves the age and maturity level a player has achieved when his earnings peak.
Many NFL players begin their professional careers just as they finish college, if not before. This means that they will begin making money at a young age, when they may not have the financial savvy to manage their wealth properly. The average NFL player earns a yearly income of $1.9 million, although many are able to bring in considerably more. In addition to lacking money management skills, many of these young players become caught up in a very expensive lifestyle. Their career longevity is short, however, and many will retire when they are still relatively young.
In addition, many NFL players fail to hire a trusted advisor to manage their wealth. Instead, they either take on that role themselves, or hand their finances over to a friend or family member. Without a comprehensive understanding of tax obligations, investment strategies or other financial matters, it is difficult for the average person to fill the role of financial advisor. The end result is often a loss of wealth, or a failure to make the player's assets grow.
For California residents considering bankruptcy, it may be helpful to know that even highly paid athletes can encounter financial difficulties. Personal bankruptcy protection is a tool available to anyone, regardless of their level of wealth or fame. People from all walks of life find themselves in need of a financial fresh start, and choosing to file for bankruptcy is one of the most expedient and effective means of gaining that new beginning.
Source: deseretnews.com, "What the American family can learn from the NFL bankruptcy crisis", Tyler Stahle, April 17, 2015