But thanks to his personal bankruptcy filing after he went to jail, he will also be playing for BMW Financial Services, Dodson Pest Control, Summertime Pool and the Monticello Woods Homeowners Association. They are not sponsors. Instead, they and many others have a claim on his future earnings.
Bankrupt professional athletes are a sad fixture on the sports scene, and Mr. Vick isn’t even alone among quarterbacks who have hit the financially injured reserve list. The former Cleveland Browns star Bernie Kosar and the current New York Jets backup, Mark Brunell, have had their brushes with bankruptcy, too.
Sports stars may or may not mess up more often than the average person who earns a lot of money really fast, but their troubles seem outsize because of their fame and the pathetic schemes they fall for. The stakes are high for football players in particular, since their average professional career lasts just four seasons or so and may leave lingering injuries and the health costs or physical limitations that come with them.
Mr. Vick is the rare athlete who is getting a second chance. His lucrative new contract with the Eagles should allow him to pay all of his creditors in full.
Most people don’t get another shot at making things right this quickly. In recent weeks, I’ve written about physicians and their financial sins and the mistakes that widows make.
While most of us will never sign a seven-figure deal to play ball of any sort, the financial plight of the professional athlete offers three lessons that almost anyone can put to work, whether you are a new college graduate getting a four-figure paycheck for the first time or you have suddenly inherited, earned or won a pile of money.
SLOW Steve Young has done pretty well for himself. He laid the groundwork for fiscal sanity by majoring in finance at Brigham Young University, won the most valuable player award after leading the San Francisco 49ers to victory in Super Bowl XXIX and is now a managing director at Huntsman Gay Global Capital, a private equity firm.
So how well did he do with his money when he started his professional career? “I wasn’t ready to deal with it,” he said. “Just take the driving analogy. Very few people would be able to handle going zero to 100. Good luck. It’s a lot, and it’s very fast.”
His advice for rookies is to deliberately slow down, way down, something echoed by the National Football League’s Players Association, their union. “ ‘Give yourself a time out’ is what I tell them,” said Dana Hammonds, the director of player services and development for the association. “Focus on football, and after you go through the season, you’ll have time to figure it all out. There is absolutely no need to get involved in any kind of investments. The only thing they need to do is figure out cash flow in their first couple of years.”
That turns out to be tough advice for many players to follow. By the time Mr. Vick had to lay his affairs bare before the bankruptcy judge, he was up to his ears in all sorts of expensive investments. There was the Payless rental car franchise, not one but two janitorial services operations, a horse farm, a restaurant, something called Airport MD and those poor pit bulls.
This laundry list typifies the questionable schemes that self-appointed experts pitch to people who have suddenly become wealthy. “Don’t think there is some secret society out there that has the investment knowledge, and you’re not in the know,” said Mr. Young, chuckling as he recalled the Mexican cat farm that someone once presented to him with a straight face. “There is nothing that is that unique.”
Instead, he made a plea for the dull. “Triple-A bonds,” he said. “A simple ladder. Go find someone who can help you do that.”
SMALL Eventually, athletes and people similar to them may want (or need) a higher rate of return than bonds can provide. Others will want to put down roots and take care of family members who helped them along the way.
Former professional athletes and those who advise the players don’t necessarily have any problem with this. But psychologists have a field day with the professionals’ tendency toward outsize financial gestures, attributing it to an odd sort of mind-set that develops when they are suddenly in a different financial world than longtime friends and family.
“Your animal brain goes into a panic, because you’ve just gotten thrown out of the tribe,” said Brad Klontz, co-author of the book, “Mind Over Money“ (Crown Business, 2009) and a clinical psychologist. “And your brother who has been there for you wants to borrow money to start a business. So athletes have a tendency to give away money. When you no longer have money, you aren’t put into that situation anymore.”
It doesn’t make much rational sense, but here we have Mr. Vick’s bankruptcy filing, complete with his somewhat vague recollection of spending between $120,000 and $150,000 on jewelry for his brother.
As to houses, Reggie Wilkes, a Merrill Lynch financial adviser who played linebacker for the Eagles in the late 1970s and part of the 1980s, would just as soon have his clients in a starter home, not a trophy one. “Get yourself a townhouse,” he said. “Or maybe even rent. Learn what it means to live in an independent building away from college or your parents.”
Alain Delaqueriere and Jack Styczynski contributed reporting.
Article source: http://feeds.nytimes.com/click.phdo?i=f2c291c570f7aec511e8b994629953c1