“Activity is expensive think longterm” Benjamin Graham
I am so proud right now. You should see the big phat smile on my face.
Look on the news media you will see lots of negative stories about entertainers and athletes.
Today we are going to focus on sportsman that are making good and bad investment moves with their money as contradictory as I might sound based on my opening words.
Kobe Bryant the former Los Angeles Lakers super star 5 time NBAChampion is making headlines on my blog today along with a few others .
Not only will I be talking about him I will also be talking about another basket ball great Michael Jordan .
These two guys are very good examples of ex players that continue to receive income off the court.
We know of plenty sportsman that amassed wealth only to throw it down the drain .
These problems arise when the individual is no longer active in the arena and the checks stop coming in.
Mike Tyson blew it after earning hundreds of millions over the lifespan of his career.
Antwan Walker made some silly moves too costing him the millions he had accumulated in the NBA.
Allen Iverson is another one that went belly up .Luckily for him he has a life time deal with Reebok but still is afar off financially from when he was the seventy sixers hit man.
Allen is no longer the center stage as far as sports is concerned however he is deeply embedded in the hearts of many in Philadelphia.
I think what happened with Iverson and Mike Tyson was that they loved living lavish lifestyles but didn’t have checks and balances in place.
I mean when you have big entourages a financial advisor and accountants without any oversight you will run into problems.
Kevin Garnett is not broke but based on what I have viewed he loss like 70 plus million dollars .
The sad situation with him is that he did not have the proper checks and balances in place.
Hence why you should always make sure you have accountants being audited. Oversight is a must.
You can learn big lessons from this . There is no way you can continue to live lavishly without having the income to sustain you.
This is where these guys fail .The moment they retire and the checks stop coming in the spending continues.
This is how they dig a bigger deficit because many of them have outstanding loans for flashy cars and high-end mansions.
So I take my hat off to Kobe Bryant and Michael Jordan for investing their money into income producing assets.
http://www.espn.com/nba/story/_/id/24384862/kobe-bryant-6m-investment-sports-drink-now-worth-200m
MJ is the owner of the Charlotte Hornets and Kobe has a big stake in a sports drink which appreciated from 6 million to 200 million. I will elaborate a bit more about this shortly.
Kobe and Michael are smart.
Even though both of them have retired they still have capital appreciating.
I think that more stars should take a page or 2 out of their books.
And Like I said before I am very proud of them .
This Shows me that they have a longterm outlook .It doesn’t take a genius to do what they are doing however it is the lesson that is the most important.
Shaquille O’Neil is doing well too. You can find him doing commercials and he was working as a sports analysis the last time I checked.
Other wise I feel blessed to bring this story to your attention to enlighten you about the importance of financial literacy .
Now I am going to outline 10 ways that you can emulate what Kobe and Michael are doing.
- Take investment classes
You can take seminar courses. Robert kiyosaki is a stock market and real estate investor , you can do a quick search or email him directly to get more info .
Oh and off course he authored the famous book rich dad poor dad. Robert also has a book about how to find profitable oil companies too.
Shop for it on Amazon.
2. Read
I did advise you to get Roberts book but I didn’t tell you why .
The reason being is that you get first hand experience from a person who has been in the trenches vs some one giving you practical advice which does very little for you outside of the doors of the classroom.
On to the other books I recommend
- Intelligent investor
- security analysis
- Common stocks uncommon profits
The first two books that I listed are Benjamin Graham’s teachings the third one is Written By Phillip A Fisher .
3. Think longterm
There is life beyond the basketball court,soccer field so therefore you need to start preparing yourself .
You need to have concrete plans but first you must shift your mindset.
This means you have to monitor, cutback even when the checks are coming in .
So by the time you do retire you are structured ,disciplined enough to manage your capital better.
In other words you need a budget a realistic one. Get in the habit of operating on a tight shoe string budget.
Cut back on that big entourage before you run into hard times.A prevention is better than a cure hey ?
3.Learn
You are going to make mistakes but some are avoidable .Earlier I spoke about a few athletes that suffered painful losses.
So why not learn from them ?
At least you would be aware and prepared to combat an oncoming depression.
4. Nothing is wrong with buying nice things
You know throughout your career what it is like when the payroll is flowing like an endless river stream you can afford to qualify for a loan .
Now Instead of buying that mansion or expensive car why not open up a business that can cover the cost of that car or house ?
5 Taking up bad loans
You know what it is like when the banks are ringing your phone off of the hook asking if you want to take up a loan .
All that is fine and dandy for the bank because they make money off of the interest and can repossess your property if you forfeit.
On the flip side you have never had any luxurious items before you signed that big deal. So now you are eager to make off like a bandit.
Shop around for the best rates you can find because you have the leverage availability and cash .
And no do not be fooled or tricked into zero down payments because you will pay more.
It easy when things are going good but excessive leverage can and will bite you in the ass.
5. Stay out of harms way
Kobe has had his brush up with the law when he was accused of sexually assaulting a woman but Other then that he has remained focused.
This is not to take anything from him either.
He his a good steward of money and a role model .
What Bryant achieved with his recent accumulation in his share value is nothing short of spectacular.
This just goes to show that some former players are making smart moves.
Now I do not know where Floyd May-weather will be in a few years time because he is a bit reckless but he claims to have made smart investment moves.
However I would not write him off though . Floyd is a branding genius and could very well use those skills to start a media company.
Before I go on to my next few points I want to clarify something with you.
My purpose of sharing this message is to enlighten you so that you can learn from your peers.
Maybe you are balling buying up expensive watches,you have a private jet which is cool because there is nothing wrong with having nice things.
On the other hand if you know fully well that you can free up some cash either by auctioning ,selling some of those items so that some of the extra cash can be used to build more wealth.
Why not do it ?
There is life after your contract expires so you had better start thinking ahead.
Where do you want to be 5 years or 10 years down the road ?
Bankrupt ?
Homeless ?
I can assure you if and when that time comes most of those people around you will vanish .
Do you want to leave yourself in a bad position after the years you spent building your career ?
It is high time that you elevate your thinking. Forward thinking that is.
You know your state better than I do . If there are areas you can cut back do it.
Maybe you have too much staff or shiny Cars sitting around your mansion depreciating .
Even though the value goes down on assets like that the bank and the IRS still want their money.
I want you to know that this isn’t something you need to be embarrassed about. Reign things in before they spiral out of control.
And you know how it is when a high public figure goes broke,the news gets highly publicized and that is when things get humiliating if you allow them.
With all that being said I have great confidence that you will take heed and proceed .
I am doing my part and that is to get my message out to players like yourself and others that need the encouragement.
Further more you didn’t come this far to squander it . You would be better off donating the bulk of the money to charities or your loved ones.
Now I will jump into my next few points.
6 Think ownership
Right now you are playing for a team and as a member you have a relationship of some sort with in the organization
Maybe you can make an investment in the team or another one after you do a more thoro background check.
Why not make money in an area that is profitable and which you are passionate about ?
7 Start an agency
I know that your season schedule is busy .You might be spending a lot of time travelling, making appearances at press conferences etc.
I am sure you do have some down time for extra circular activities. You can use this time to build an agency . It doesn’t have to be the arena you are in .It could be boxing .
8 Negotiate
Learn from hip hop icon Master p . He negotiated the very first deal he signed. He was not about to give up rights to his name and publishing for short-term gains.
Any contract that you sign should be negotiated. Maybe you can opt for ownership of the company as part of the deal.
Floyd May-Weather does well in the negotiation area. He promotes his own fights and gets a large percentage of the paper views.
So do not give up the right to your name. Bargain every aspect of your deal to the bone.
Instead of signing a longterm clothing contract with Nike ,form a partner ship or develop your own brand . You can leverage others in and out of the leagues to model your brand .
James Bubba Stewart is the first African-American to win supercross and motocross championships . He owns a gear line.
In addition to that he puts on annual events and riders wear his gear at the races .
Look what being different got Colin Kaepernick because he chose not to knee .He picked up a sponsorship from Nike.
So start thinking outside of the box and prepare yourself for retirement.
You have to picture yourself doing these things.
Put in the work now so that you can live lavish when you retire.
9 Network
Reach out to your comrades ,bounce some ideas off of them.
Do not be afraid to reach out to Kobe ,Michael Jordan either.
You never know what the three of you can brainstorm .
Maybe you could be one of the main suppliers for sporting equipment in the leagues.
10 Stream line
Get into the habit of monitoring income and expenses .Do not solely rely on accountants .This would eliminate you having to suffer a big loss like Garnett.
Those weekend expenses can mount sharply and catch you off guard too.
Conclusion
No matter which way you go the onus is on you.Mistakes are bound to happen . Reckless behavior can only be curtailed by way of habit.
How do you feel about today’s story ?
What are your viewpoints on athletes managing their finances ?
Is there anything in this message that pertains to you ?
I know that I have learned a few things .
Over all I feel that this commentary has been my best in a long time .
But I need your input and ideas to help me to come up with the next few topics.
Shout out to me in the comments section below.