Why do so many athletes go broke?
It's one of the most well documented, researched, and speculated questions regarding athletes and the riches they generate through lucrative contracts and endorsements.
Is it truly because of the lazy trope that athletes don't know how to manage their money?
The lack of financial knowledge is a reason, but it isn't because athletes need to save better. It's because they are expecting and trusting people who only know how to extract money from them to help them grow it, which isn't something they know how to do.
We fill up a balloon by increasing the air inside, not by slowing the escape of it.
This is interesting since all have agents and financial advisors. The stark reality is that many athletes find themselves facing financial hardship because their entrusted advisors lack the acumen to generate wealth.
The secret to printing money is the most protected information in the universe.
This information is impossible to obtain through 3rd parties, materials, or mentors and is only handed down through heirs.
There only 4 ways to generate more money
- Become a money printer
- Marry a money printer
- Be the heir of a money printer
- Provide value to a money printer
This is the only way to not go broke.
Athletes are highly paid due to #4 by providing value to the team owning money printers, but this value has an expiration date. Prior to this expiration date, athletes must utilize their skills and network to transition to #1.
Billionaires don't sell courses.
Athletes are able to get rich due to possessing a very coveted and specialized skill set. This skillset isn't in generating wealth, but is one that can generate riches that make athletes appear wealthy. But, viewing the relationship between Michael Jordan and Phil Knight (founder of Nike), Phil Knight's money printing knowledge combined with Michael Jordan's global influence made both rich, but Phil made out exponentially better.
Who made out better?
It's not even close. Michael Jordan's fame made him a few $3 billion, Phil's netted him ~$40 billion.
They are the closest in proximity to the money printing team owners because they are able to assist the team owners in generating more money. They are some of the wealthiest employees on the planet, but despite their salaries their income pales in comparison to what the team owners take home.
The highest paid professional athletes can only rent superyachts, team owners buy them.
These representatives, whose earnings are predominantly derived from extracting a portion of the athlete's income, often lack the expertise to actively grow and generate more money. This stands in stark contrast to the ultra-wealthy, who understand the vital importance of growth and revenue generation.
When athletes retire, they experience significant income reductions, mirroring the financial struggles of individuals who lose their jobs. Unlike the world's wealthiest individuals, who focus on active wealth generation, conventional money managers are adept at wealth preservation, but not at transformative financial success.
Moreover, athletes possess unique opportunities to network with the true money printing titans of the world. These connections open doors to genuine partnerships founded on equity and mutually aligned incentives (printing more money together than they would alone) rather than mere endorsements or sponsorships, avenues through which agents extract their own profits.
Yet, alarmingly, many athletes are represented by agents who, unable to directly monetize non-cash opportunities, miss out on potentially game-changing ventures. It’s a stark contrast to the select few athletes and companies that navigate these intricate operations.
The cautionary tale of Spencer Haywood serves as a poignant example. When Nike offered him a choice between $100,000 in cash or a 10 percent ownership stake in the budding company, his agent, driven by the allure of a commission, advocated for the cash. Today, that ownership would be valued in the billions, an enduring testament to the monumental impact of strategic equity partnerships.
The Solution? Partner with Money Printers, not Money Extractors
Rather than focusing on retaining a lump sum, which also serves as the lifeblood of agents, managers, and various stakeholders, the path to financial prosperity involves adopting the blueprint of the world's financial titans.
This entails seeking partnerships, equity stakes, and ownership opportunities that promise long-term growth and prosperity. By aligning with the true wealth creators, athletes can transcend the conventional trajectory and elevate their financial standing to VIP status, ensuring a legacy of financial abundance that endures far beyond their playing days.
Even worse, it is impossible for anyone who isn't a money printer to actually know how to create more money.
Often, athletes unwittingly fall into the trap of entrusting agents whose interests can never entirely align with their own long-term wealth accumulation.
Agents primarily earn their fees as a percentage of contracts and sponsorships, which can inadvertently steer them away from equity opportunities the very vehicles of wealth creation favored by the ultra-wealthy. This misalignment of interests can lead to athletes missing out on transformative investment opportunities, perpetuating a cycle of wealth preservation rather than active wealth creation.
Similarly, athletes sometimes make the mistake of relying on financial advisors who derive their income from managing assets, rather than prioritizing wealth growth. While traditional financial advisors excel at safeguarding wealth, they may not possess the expertise needed to generate substantial returns.
Their compensation structures are often tied to the total assets they manage, creating an inherent bias towards wealth preservation rather than aggressive wealth creation. As a result, athletes may find themselves guided by professionals adept at protecting wealth, but lacking the insights required to truly "print money" and catalyze transformative financial success.
Everyone else is just a bill.