Friday, June 29, 2012

Now What? Part III

"Now What" has been a series of articles concerning the financial woes and successes of professional athletes after retiring from sports.  Let's recap.  Part I focused on athletes who lost it all, spent/invested unwisely, and could have considered burning their money as a better alternative.  Part II went down the other path, exploring the post-athletic careers of Magic Johnson, Mo Vaughn, and others.  These men put their millions to good use, helping communities and turning a profit at the same time.  The third and final installment focuses on the future.  Will former athletes continue to make headline news with their financial blunderings, or will something change?

Professional athletes make incredible amounts of money.  With average salaries going up every year, being drafted gives athletes the opportunity to make more money than many Americans will make in their lives.  Although most people rightly see this as a blessing, it has also become a curse.  Athletes are seen as rich playboys who spend their money on all sorts of frivolous and unconscionable mansions, cars, and other toys.  Few people see the likes of Warren Buffet, Bill Gates, or Michael Bloomberg in a similar light.  Instead these billionaires transcend their own money, seen as smart and prudent instead of vacuous.  So far, I have delved into the many causes of this irresponsible spending and investing on the part of former professional athletes, but I have not given a forecast for the future or a comprehensive way to solve these issues (education being the only solution I previously referenced).  

Athletes, like presidents, should have both a keen mind and good advisors.  To expect every professional athlete to be schooled in post-keynesian economics, or how global trade effects their annual salaries is a futile task.  On the other hand, it would not be unreasonable for every professional athlete to read a chapter of "Freakonomics" or "Personal Finances for Dummies" every week.  Professional athletes, who have just entered the world of the upper class, should have a rudimentary understanding of taxes, investments, and banking.

We all have certain predispositions from our childhoods, whether we were originally dirt poor or wealthy, that cause us to make certain decisions.  Situations arrise, such as the poor black basketball star who wants to buy his mother the house she could never afford, or the Yale graduate who uses his money to set up trusts for the children he hasn't borne and the wife he has yet to marry.  Both scenarios have validity and neither necessarily constitutes a bad decision.  An athlete should be able to buy his mother a mansion, but simultaneously understand that he cannot buy every friend from his neighborhood one as well.  Limits exist, and as the old adage goes, everything in moderation.  These are lessons every athlete should learn.  Not only should these newly minted millionaires have at least a minor knowledge of money, they should hire the right people to oversee their wealth on a day-to-day basis.  Making your best friend your financial advisor probably won't work unless he recently received his MBA from Wharton.  Hire a team of financial advisors to manage your considerable wealth, it's exactly what most upper-middle class and upper-class Americans do.

Luke Skywalker
In Star Wars, Luke Skywalker is depicted as the only remaining hope to save everyone from the evil empire.  George Lucas' first film is titled "A New Hope".  Don't worry, I don't think I've found the one athlete who will save the rest from financial ruin, but I do think Andrew Luck should be the next poster child for "best financial decisions made in a career".  Nothing has been written in stone, much of this is speculation. 

Andrew Luck, son of Oliver and Kathy, brother of Addison, Mary Ellen, and Emily Luck, and the most recent quarterback to be chosen number one overall in the NFL draft, possesses immense talent, intelligence, and upside.  When the Indianapolis Colts selected Luck no.1 overall in the 2012 NFL draft, they knew what they were getting.  They wanted the next Peyton Manning, and from most accounts and predictions, Luck may be a Manning look alike.  He stands 6 foot 4 inches tall, weighs about 230 pounds, throws a football at the speed of an intercontinental ballistic missile with the accuracy of a skilled marksman.  His athletic abilities are only matched by his gifted mind.  Luck was co-valedictorian of his high school class, entertained scholarships to Northwestern, Rice, and the University of Virginia, and chose to attend Stanford University.  

Andrew Luck
By all accounts, the 22-year old is athletic, smart, and a soon to be inductee into the select group of professional athlete millionaires.  Will Luck be smart with his money?  He comes from solid stock.  Luck's father, Oliver, played quarterback in the NFL for the Houston Oilers.  After retiring, the senior Luck received his law degree from the University of Texas, and moved to Germany to practice law.  Following an unsuccessful run at a seat in the United States Congress, Oliver Luck was named the CEO of the Houston Sports Authority.  Next, he took a position as the athletics director of his alma mater West Virginia University.  So, it seems young Andrew has a pretty good role model to look to for guidance in both his athletic and post-athletic pursuits.  Luck has a good advisor, but how about his personality?  According to an article in USA Today, Luck rode his bicycle around the Stanford campus instead of toting an expensive car.  He decided to forgo the NFL after his junior year of college to return for his senior year.  Luck graduated with a bachelors degree in architecture, carrying a 3.48 GPA while studying his other major, football.  

So it seems like this young man has the makings of someone who will not only succeed on the field but off of it as well.  He has a good head on his shoulders, strong role models, a great arm, and most importantly a solid attitude.  If ever there was someone whom young athletes should emulate, it is Andrew Luck.  I predict that, no matter the direction his football career takes, Luck will be successful in many spheres, especially financially. 

Well, folks, this trilogy has now come to an end.  I've profiled financial dunces like Curt Schilling and Allen Iverson, movers & shakers like Magic Johnson and Mo Vaughn, and the star of the future, Andrew Luck.  All of these men have one thing in common.  They all played or will play professional sports.  In fact, they have succeeded or most likely will succeed in their given sport.  The X-factor with these men, and all professional athletes, remains the manner in which they treat their status of "wealthy".  Education, solid role models, and above all else a strong attitude constitute the most important factors of financial success, even for those with the most money.   

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