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Why athletes and the rich go broke

June 10th, 2008 · No Comments

Shaq face
Shaquille O’Neal is a big man, with an even bigger budget

The Cuban Revolution has a very interesting article on the reasons the rich and famous (particularly athletes, musicians, and the like) go broke, often spectacularly like Michael Jackson, Mike Tyson, Johnny Unitas, and most recently Evander Holyfield. The Toronto Star recently wrote about the financial mishaps most NBA players encounter, estimating that 60% of NBA players go broke five years after retiring from the NBA. Now no one is shedding tears for most highly paid athletes, but they do often encounter financial problems, losing their expensive houses and fleets of cars. After all is said and done, what is the primary cause of this? Poor money management (obviously), particularly becoming accustomed to spending tremendous amounts of money without paying attention to the fact that for these men and women (musicians, athletes, lottery winners), the flow of money will dry up and soon reality will set in. Previously we wrote about how Shaq spends nearly $1 million a month, so the fact that many athletes “go broke” is starting to make some sense…

[The Cuban Revolution] via [Freakonomics]

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