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A million dollars a year won’t keep you out of bankruptcy

On Behalf of | Apr 15, 2015 | Chapter 7

We all have imagined how great it would be to have an income like that of a professional athlete. Earning millions per year, we probably believe that it is like winning a “golden ticket” and that with that kind of income, life would indeed become “easy street.”

Well, facts and statistics have a way of deflating many of life’s fantasies, and this one is no different. While the average NFL player may earn more in one year of their short careers than the average Tennessean earns in their entire lifetime, a recent study found that for those drafted between 1996 and 2003, 16 percent filed for bankruptcy within 12 years of retirement.

How is this possible? One report attributes it to a couple of common factors. A short earning career; the average NFL player’s career only lasts 3.5 years. They often manage their money poorly, from taking bad financial advice and choosing risky investments.

They often have poor spending habits and never learned to be careful with their money, so when it stops coming in, they may not recognize they cannot keep spending at their previous rate.

And injuries. They are often subjected to concussions, which can cause traumatic brain injuries, and may leave them impaired and perhaps unable to think clearly. In the worst cases, it may lead to substance abuse, addiction, depression and an early death.

They also suffer the wear and tear of tremendous physical abuse, which can leave them with chronic pain, another cause of substance abuse. This can severely limit their ability to find employment after football.

Clearly, some football players need better financial advice and more conservative spending habits if they are to stretch three years of income over 30 or 40 years.

The teaching lesson for us all is that high income does not immunize one from bankruptcy. For many people in Tennessee, the trigger that causes a bankruptcy are job loss, a catastrophic illness or an accident, which can cause large medical expenses and destroy your ability to work and earn income or family trauma like divorce. 


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