“The way a team plays as a whole determines its success.”

– Babe Ruth

Sobering Statistics*:

  • By the time they have been retired for two years, 78% of former NFL players have either gone bankrupt or are under financial distress. The primary reasons are lack of employment and divorce.
  • Within five years of retirement, an estimated 60% of former NBA players are financially destitute and facing or have filed for bankruptcy.
  • In a recent financial services study, more than 80% of 178 athletes polled: each with a minimum net worth of $5 million dollars and two thirds of the athletes being under the age of 30; said that their biggest financial concern was being involved in unjust lawsuits and/or divorce proceedings.
  • By common estimates among athletes and agents, the divorce rate for pro athletes ranges from 60% to 80%. This is between 20% and 60% higher than the general population.

The Problem of Wealth & Athletic Careers:

The financial concerns that professional athletes face are decidedly different than the common issues that surround the general public, or even other celebrities like artists and entertainers. A professional athlete’s career is markedly shorter than the average individual or artist. Further complicating the income needs of the athlete is the fact that while most of the general public’s peak earning years occur in their 50’s, professional athlete’s peak earning years are typically in their 20’s and 30’s. In this respect, an athlete’s income is much more akin to a lottery winner than to a traditional employee. This fact creates a great divide when deciding how to properly invest assets for the long term and when organizing a strategy for having the assets last through a comfortable retirement, as well as the athlete’s golden years.

If It Sounds To Good To Be True…..It Is!

Many athletes face a tremendous amount of peer pressure to live a certain lifestyle, or to have “family and friends” make financial decisions for them, even if the individuals may not be necessarily qualified to do so. Another growing concern for athlete’s are the massive amounts of investment opportunities that are presented to them. Man of these individuals are pitched private equity deals, real estate investments and opportunities to purchase businesses in order to provide investment return and income.

*The fact is that an estimated 1 in 30 private equity deals actually provide the expected return that is promised. These are typically very speculative investments that carry a tremendous amount of risk, a fact that may be hidden from or not properly disclosed during the beginning of the process. Many athlete’s are lured to enticing investments that claim to guarantee double digit returns with little or no risk. The fact is that if the return sounds to good to be true, it is not true. One of the most responsible things that an athlete or agent can do, is to set up a proper financial plan to ensure the long term economic stability of the athlete.

Educate, Advise & Monitor:

At Elysien Private Wealth & Real Property, we help athletes with the following.

  1. Understand how to properly invest their assets for the long term, while mitigating risk and scientifically maximizing return potential.
  2. How to structure assets in a way that will protect our clients from lawsuits, divorcing spouses and taxes, legally and responsibly.
  3. Due to the fact we are a fee only financial advisory firm, we hold a fiduciary liability to our clients at all times and hold true to this standard everyday.
  4. We closely monitor assets and collaborate with the athlete’s other professional advisers to ensure that their best interests are being cared for at all times.
  5. We assist tax planners with the proper information they may need to file multiple state tax returns ans stay in compliance with federal and state tax law.
  6. We educate the client on investing scientifically, not forecasting and peculating on returns, so that we can properly set up long term goals and expectations.
  7. We work with the athlete on a budget and financial plan that considers income needs after retirement and pension concerns.
  8. We assist the athlete with charitable contributions, foundation set up and targeting worthwhile endeavors that are consistent with the athlete’s wishes.
  9. We act as a trusted advisor for the athlete, and will spend time educating and discussing suitable and responsible ways to handle the burden of sudden wealth.
*Statistical information quoted from the article "How and Why Athletes Go Broke" by Pablo S. Torres, Sports Illustrated, March 23, 2009.