At ESPN.com, the Sports Guy – Bill Simmons – wrote:
Quick tangent: You’re asking yourself, “Wait, how can a dude making $8-10 million a year live paycheck to paycheck?” Easy. First, he’s only banking 40 percent once the IRS and agents are done with him. Second, he’s probably overpaying for multiple houses and luxury cars just to keep up with everyone else. Third, he’s buying expensive clothes and dinners, chartering planes, buying expensive TVs, going to casinos, and paying for friends and family at every turn. Fourth, there’s a decent chance he’s supporting a bunch of people back home — family and extended family — and not just that, but he might have gotten roped into funding at least one dumb “investment” by a loser family member. (“Uncle Lenny, I thought you told me this nightclub couldn’t miss?”) Fifth, he is, um, “dating” frequently — even if he’s married — and if you “date” frequently, mistakes might happen that lead to hospital bills and child support payments. (If you catch my drift.) And sixth, he’s not adding these numbers up in his head because he’s thinking, “I don’t need to worry about money, I’m making $10 mil a year!” I know it sounds farfetched, but I’ve heard the Inexplicable Tale Of Financial Woe with NBA stars too many times to count … and that doesn’t include stars such as Scottie Pippen who were screwed by their financial advisers. It’s a long and inglorious list, and if you don’t think we’re headed for 15 “Real Sports” segments in the next decade with Bernie Goldberg catching up with Broke Former NBA Superstar X, you’re kidding yourself. Remember the lessons of the ’99 lockout — the players HAD to come back. And it wasn’t because they missed playing.
I have shook my head sadly at this phenomenon for almost twenty years. It is a lessons that applies equally well to black entertainers generally as well as entreprenuers in illegal activities (see The Wire or American Gangster). Worse, it works on a smaller scale for African American professionals (like my colleagues in higher education, both professors and administrators). This financial irresponsibility also applies to many white professionals (less so to white entertainers), but the macroeconomic racial consequences are less severe.
President Obama’s economic plan presents a series of opportunities to eliminate many of these racial barriers in net worth over the next ten years, but its effectiveness accepted a terrible blow with the financial ignorance these athletes, entertainers, entreprenuers, and professionals maintained over the last twenty-five years.