June 19, 2024

Why Pro Athletes Go Broke and How One NBA Player Avoided It

Our experts answer readers’ investment questions and write unbiased product reviews (this is how we evaluate investment products). Non-client paid promotion: In some cases, we receive a commission from our partners. Our opinions are always our own.

  • Josh Childress is a former NBA player who has made over $60 million in his career after graduating from Stanford.
  • Childress avoided the financial problems faced by some other athletes.
  • Childress explains that a big mistake players make is to overestimate how much money they get.

Josh Childress, a former NBA player who has made more than $60 million in his career after graduating from Stanford, is now playing professionally in Australia.

During an interview with Media GritChildress was asked how professional athletes went broke.

Although he’s making less money now than when he played in the NBA, Childress says he’s been able to avoid the financial problems some other athletes have faced.

Childress, who was the sixth pick of the 2004 NBA Draft and signed a four-year rookie contract worth $11.7 million, says the number one mistake athletes make is overestimating how much money they have.

“The first mistake is, people say, ‘Okay, I have $ 11 million,'” said Childress. “You have five [million dollars after taxes] over four years. So that million dollar house that you thought you had for $11 million, you had an extra $10 million, that house then becomes more expensive. Most boys buy a house or a car or something for their mother. They buy themselves a car. You have a 2-to-4% agent fee. You got NBA escrow. So that check will be cashed.”

Childress says another big factor is the influence of veteran players who make a lot more money.

“Some of my veterans spent a little more than others,” Childress explained. “If those are the guys who take you under their wing, that’s what you get used to. That’s how you think it has to be, and that’s how you think life is, and you get caught up in that, and you end up spending more than you should.”

Childress says he fell into a similar pattern in his career but was able to keep his spending under control.

This post was originally published in 2020.

Leave a Reply

Your email address will not be published. Required fields are marked *