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Mindset's Role in Professional Athletes Going Broke
A high percentage of professional athletes are going broke within five years of retiring. See how their mindset contributes to this problem.
One of the same mental problems that undercut many athletes’ careers is also closely related to financial failures: not being able to put their mistakes or failures behind them. Many more careers end prematurely for this reason than most people are aware of. When players dwell on their mistakes, it usually creates more mistakes. A common refrain in athletics is “next play,” meaning forget what just happened and give all your attention to the upcoming play.
I can guarantee any athlete who has their mind on things that have happened in the past, is not performing optimally in the present. Likewise, when a player is making a financial or business decision, their focus needs to be in the present with an eye toward the future as well. In business, just like in sports, you cannot change what has already happened, but you can always make the best of where you are at any given moment and positively affect your future.
In sports there is always an upcoming game, match, etc. which helps the athlete keep his focus forward. Unfortunately, in financial and business matters, there is not usually an impending deal or venture waiting for them to prepare for, in cases where the ones they are in go sour. Consequently, they tend to get consumed in losing propositions they are already in, and try to fix them instead of moving on to the next opportunity.
No one likes to fail, and athletes often take this to the extreme. This is another mindset that can get an athlete into financial trouble. I teach all my clients to learn how to fail successfully. What I mean by that is, we all have comfort circles around us and no matter how large or small your comfort circle is, the only way it will grow larger is by stepping outside of it. All learning comes through trial and error, and I believe that if you are not ever failing, it’s not because you are special, but rather because you are not challenging yourself to get better.
How this hatred of failure can adversely affect athletes in their financial moves, is their inability to cut their losses in businesses and investments. Curt Schilling served as a great example of this in “Broke.” His video game company, 38 Studios, was said to be burning through $5 million a month, but rather than cut their losses and run, he kept throwing good money after bad, eventually filing for bankruptcy this past June. According to the filing, 38 Studios claimed assets of $21.7 million, and liabilities of $150.7 million. For those of you who are not good at math, that’s a loss of $129 million.
Another problem for most athletes is that they spend countless unseen hours training and playing in an effort to make it to the professional level without receiving any financial reward. Then suddenly, they are showered with large sums of money when they sign their first contract. Often, even more comes their way via card deals and shoe contracts and other endorsement opportunities.
The problem with this, is that by going from having nothing to having enormous sums of money in a blink of an eye creates the impression in their mind that getting money like that is easy. When in fact, all of the hours they put in over the years in sweat and training is what got them the money, but their mind fails to equate the money with all of their hard work, leaving them with the false (and damaging) impression that getting more money will be child’s play from now on. This causes athletes to look for “home-run”
One of the most successful former NFL players in his post football career is former Minnesota Viking All-Pro defensive end and current Minnesota Supreme Court Justice, Alan Page. In his book Racing the Sunset: An Athlete’s Quest for Life After Sport, he said “You never really have the opportunity to grow up, it’s like you’re living in a candy store and nobody tells you that you’ll ruin your appetite.”
Human beings have an amazing ability to acclimate to whatever circumstance they find themselves in. For example, a person making $24K a year will think of $10K as a lot of money. But if that person suddenly starts making $1 million a year, the same $10k will often start to be looked at as pocket money. It will still buy the same amount of things as it would buy when you made $24k, but your view of it has changed. When your view changes, your behavior follows, and that’s how so many athletes end up broke.
The average pro athlete’s career is generally measured in years, not decades. So you would think they would want to invest their money in themselves, to prolong the career where their earning power is the highest. Yet, I have had clients who have dropped more in one night at a club than they pay me for a year of service.* As Ahmad Rashad, a former NFL All-Pro receiver said, “Some players with a lot of athletic ability just go out and play. Then after four or five years you don’t hear about them anymore. The smart guys figure it out, and they play ten, twelve years. They do it mentally more than they do it physically.”
Most players have a plan for getting to the professional ranks. However, very few have any kind of plan for the rest of their lives once their playing days are over, and that’s important from both a financial and happiness standpoint.
Former NBA player Jamal Mashburn has worked for ESPN as an analyst, and launched a number of successful business ventures. He owns 34 Outback Steakhouse franchises, 37 Papa John’s franchises, and a number of car dealerships across the state of Kentucky. One thing Mashburn and the above mentioned, Rashad (who later became a top broadcaster for NBC) and Page, all have in common is that they didn’t wait until they hung up their shoes to think and plan for the next phase of their lives.
All three serve as great examples of how the right mindset coupled with good planning can go a long way in helping future pros from falling into the traps that have befallen so many other players.
Do you have the mindset necessary for success in all aspects of your life?
You can follow Sam on Twitter: @SuperTaoInc
*= I’d like to think that my services help their career and earning power more than any single night out in a club.