Many people think that having money means that they aren’t going to ever run into financial troubles. This isn’t anywhere close to the case. Think about professional athletes. These individuals make millions of dollars to play ball, but many of them end up having to file for bankruptcy protection.
From 1996 to 2003, 16 percent of professional athletes filed for bankruptcy within 12 years after they retired. One reason why this occurs is because of the lack of financial education. They might see the money coming in and think of it as an infinite resource instead of a finite resource.
Many professional athletes haven’t had to deal with that level of money in the past, so they don’t really think about what they are doing. There is an important lesson to learn here. You have to budget your money and plan carefully for what you want to do. Without budgeting and planning, there is a good chance that your needs and wants will outlast the money you have available.
Another thing that claims some of the money from these professional athletes is family law issues. Not getting a prenuptial agreement and some child support issues can also claim a hefty chunk of the money these athletes make.
Taxes and mismanagement of funds by the people who are hired to oversee the professional’s money can also lead to financial challenges. All of these factors combined can lead the athlete to have to file for bankruptcy protections, even when they should have enough money to make ends meet and more.
The same thing can happen to anyone who is in debt. In all cases, the bankruptcy option isn’t something to be ashamed of. Instead, it is a responsible way to regain control of your finances when you are overwhelmed.
Source: Arizona Sports, “Going for broke: Many pro athletes still struggling with finances,” Ryan Dorfman, Oct. 08, 2017
