Big %@$*& Money | The Rich, Invested Athlete and The Rest Who've Bankrupt
- Adam Herod
- Aug 5, 2018
- 6 min read
Updated: Aug 15, 2018
Here's a look at some of the best and worst money management stories from the world of pro sports. #thewealthmap #money #personalfinance
Whether you agree with it it or not, there are some athletes out there making big %@$*& money. Often, people will comment that because of their impact on society, doctors and teachers should earn more.
Yet...
Consider Kirk Cousins of the NFL's Minnesota Vikings, who inked the first fully guaranteed contract at $84 million. Regardless of how he plays over the next three years, he will have $84 million sitting in his bank account.
Or how about Floyd "Money" Mayweather, who in one bout with Conor McGregor earned $275 million, putting him atop the Forbe's list of the highest earning athletes for 2017.
Better yet, LeBron James's new contract with the Los Angeles Lakers puts him at $38.5 million per season, $469,512 per game or $9,781 per minute.
Certainly, not all contracts are multi-million dollar contracts. But in a seeming instant the destiny of an athlete's entire family can change with the swoop of a pen.
The inspiration for this blog post comes from the recent announcement by New York Giants rookie running back Saquon Barkley, who stated that he would invest his entire $31 million contract and only spend his endorsement money from Nike, Pepsi and Panera America.
The one big purchase he made was buying his parents a new home, which was something he had promised them since he was a young football star.
Saquon's financial picture is only starting to come into form, but it is looking pretty bright. If his $31 million earned 7% compounded annually over the next 30 years he would have...
Over $235 million!
That is assuming he does not add any more to his investment account and refuses to touch a single penny.
This is the inspiring part. Athletes have a short window of time in order to make their money. Certainly, not all contracts are multi-million dollar contracts, but in a seeming instant the destiny of an athlete's entire family can change with the swoop of a pen.
Let's find out how other athletes have fared with their millions.
The Good | Tom Brady | Net Worth (2018): $180 million
The GOAT.
Thomas Edward Patrick Brady Jr.
Never before has a blog post lost its readership so quickly, but if you've made it this far hear me out.
Current estimates put Tom Brady at a net worth of $180 million. He has been able to amass his fortune through multi-million dollar contract negotiations with the New England Patriots, and endorsement deals with Aston Martin, UGGs, Tag Heuer and Under Armour.
Those who are fans of the NFL would be able to tell you that, for his greatness, his millions have come at a slow trickle compared to other - how do you say - less capable players at his position.
Here's where Tom beats the rest of the pack: his wife and model Gisele Bündchen.
What is her net worth? As of 2018 it is upwards of $360 million!
It is difficult to gather how they split their finances; however, it is easy enough to consider that their financial freedom is much more powerful as a couple than it is separately.
Once again, we have a financial picture that has not been fully formed. What we do know is that it can be considerably harder for the rest of us to make it in America on a single income.
Nobody should get married for the money, because there are far too many other criteria to consider, but it goes without saying that a retirement plan can be much more bountiful with two wage earners flooding the accounts.
Lesson to be learned: Do not underestimate the power of a dual-income household. A king is only as strong as his queen, and together they can rule the galaxy.
Bonus: Lesson to be learned: Diversify your assets and your future earning power. With tragic good looks and dominance in varied markets, these two will have multiple sources of income for years to come.
The Bad | Curt Schilling | Current Net Worth (2018): $1 million
During his 20 years of professional baseball, Curt Schilling earned $115 million.
Now? His estimated net worth is closer to $1 million.
Where did the other $114 million go, you ask? Don't ask him!
Schilling lost the majority of his earnings when he invested in a video game business named 38 Studios. Schilling's goal was to create jobs and grow his wealth; however, it didn't take long and the company was laying off 379 of its employees and filing bankruptcy with the state of Rhode Island.
Reportedly, Schilling had dumped $50 million of his own money into the business.
At the time of the bankruptcy hearing he admitted that he was "tapped out" and out of a potential $75 million case that Rhode Island put up against 38 Studios, the failing company only ended up paying back a $2.5 million settlement.
Lesson to be learned: This goes back to the classic Warren Buffett quote, "Never test the depth of the river with both feet." Investing is risky no matter where you put your money, but no intelligent investor has said to go all in. Considering Buffet's wisdom, we can see here that it's far too easy to sink once you go head first.
The Good | Daniel Norris | Current Net Worth (2018): Estimated at $3 million
Detroit Tigers relief pitcher Daniel Norris may not be famous for being a millionaire. Norris has earned almost $4 million as a MLB pitcher, earning the majority of his money with his first contract in Toronto.
No. What Norris is most famous for is not his abs, either.
Dubbed "The Man in the Van," Norris may be better known for his paltry living room - a 1978 Volkswagen Van parked outside of a Wal-Mart.
When Norris originally signed with the Toronto Blue Jays in 2011, he earned a $2 million signing bonus. The van was his first purchase, costing him $10,000, and represented his own personal way of disconnecting from the pressures of the league.
He didn't slight either. Each morning he made French pressed coffee and ate organic foods. With six figures in the bank and time off during the offseason, he even committed 40 hours a week to work at an outdoor store.
Lesson to be learned: Live below your means, enjoy the splendor around you and don't conform to the crowds. Norris would have had plenty of opportunities to spend his wad, but instead he has understood the value of the dollar in his account - as opposed to being in someone else's hand.
The Bad | Evander Holifield | Current Net Worth (2018): $500,000
Evander Holyfield lost more than just his ear throughout his career in boxing. Some would say he lost the shirt off his back.
Holyfield earned over $560 million over his long boxing career, including $34 million for what will forever be known as "The Bite Fight."
Besides mounting child support and alimony payments, it was evident his excessive 54,000 square foot mansion put him under. The 109-room Atlanta home, if you will, would have had a substantial mortgage, tax base, and electric bill.
The mansion covered 105 acres and included all sorts of courts and gyms, a horse stall barn, a 135-seat theatre and one of the largest private swimming pools in America.
Upkeep? Try $1 million per year.
Holyfield has cleared the air about his finances, stating that he is indeed broke.
Lesson to be learned: Calculate your income potential, expenses and burn rate, and consider the seasons of your life in the equation. Even $1 million will leave some retirees shorthanded, simply due to inflation and medical costs. You have to know how much money you will need once your working life comes to a close.
As Dwight Eisenhower once said, "...plans are useless, but planning is indispensable."
The Good | Serena Williams | Current Net Worth (2018): $180 million
Serena Williams is without a doubt the top female in tennis. She also happens to be the top female in net worth, with an estimated $180 million to her name.
The story around Serena is her diversification. Much of her net worth has been gained in endorsements, including: Nike, Wilson, Beats by Dre, and Delta Airlines.
She's not done, yet, folks.
Williams also has an equity stake in The Home Shopping Network and owns a piece of the Miami Dolphins football team.
But wait...
Williams has also invested in companies such as Mayvenn, The Daily Harvest, and LOLA, which are all lifestyle companies catering to women and the health-conscious.
Lesson to be learned: Create multiple streams of income and build out adding layer upon layer of wealth security. The best theme we can pull from our stories of "The Good" has to do with the realization that there is life after sport. For you, that means there is life after work - should you choose to plan for it.
Conclusion
I'm going to throw this one up to Spencer Strasmore, played by Dwayne "The Rock" Johnson on HBO's Hit Series "Ballers." Thanks for reading!
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You can message Adam at wealthmapblog@gmail.com.
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