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Athletes That Go Broke

Have you ever stopped and looked at the contracts that athletes are getting these days to play professional sports? They are ridiculous! Salaries have been known to get up to $250 million over the course of 10 years. Most athletes make at least $1 million a year, which is not a bad living by any means. With that being said, it has always been a mystery why athletes go broke. How can someone who makes more money than most Americans will ever see lose everything they have? It appears that debt can hit even those with the highest incomes. The following are reasons why they might face debt in their lives.

Assuming the Money Will Always Be There

Unfortunately when you sign a contract for millions and millions of dollars you can face the notion that the money will always be there. You begin to throw money away on homes and cars, while helping out those you care about. After a while you can only buy so many cars before the money disappears. Sounds like a difficult thing to do right? Well, people who make millions and millions of dollars have a different world view than most. When they get all that money they will assume that it will never leave them. This is not the case. Those big contracts have to stop sometime.

Coming From Poor Backgrounds

A lot of athletes tend to come from humble backgrounds where they did not have a lot of money. This is a new experience, so they want to make up for lost time. They never had money so it was hard for them to learn the value of saving for a rainy day. Finally, the checks are coming in so they decide they need to spend. They want to catch up on all the things that they might have missed, while the bank accounts run dryer and dryer. It is hard for them to focus on saving money when their whole life was spent trying to earn it.

Poor Money Management!

This is where athletes and “normal” people face the same issues. If you have poor money management then it does not matter how much money you make. You will begin to run yourself into trouble. Make sure that there is always a budget that will let you know where you stand. If you have a lot of money then you might want to hire a financial advisor that can be the one to keep track of all that you have going on. Just because you make millions does not mean that you are immune to poor money management. Take your time and make sure it works out.

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