It’s a story we’ve heard too many times. Successful NBA player filed for bankruptcy. Then you google his earnings and wonder “how do hell do you make so much money and go broke???” Turns out it’s easier than we think.
That’s why Chris Paul started speaking up about it, Tracy McGrady started a program to help young athletes, Charles Barkley tells young kids they’ve “got a better chance of being a doctor than playing in the NBA, and Antoine Walker wrote a book about his story.
A part of it is the circumstance someone comes from. These guys often provide for a large number of people, take care of their livelihoods. Add a lack of education, particularly financial literacy, and things get under you quickly.
But a part of it is human nature. It’s the same thing that caused the housing bubble. You buy stuff you can’t really afford right now because you believe you’ll get that promotion, that pay bump – that next contract. That’s exactly the way of thinking Jose Calderon saw too often.
“The problem with some of the guys is they think too much about the second contract. ‘When I sign the second contract, I’ll be set.’ You have to be living by what you have in your first contract. That’s all you have. There is nothing else signed.”Jose Calderon
Just think of Isaiah Thomas. In Boston, he was The King of the Fourth, putting up some of the wildest numbers in playoffs history. Thomas was looking at a max contract, talking about Brinks trucks. Now he’s out of the league with career earnings of XY. Future contracts are fools gold.
The NBA and NBPA have done a great job of helping NBA players learn about the traps of debt and how to properly manage their money. Veteran players have also done a lot to openly talk about their mistakes and mentor young players on how not to make them.
That’s how you get guys like Jayson Tatum who doesn’t spend his Celtics money and only lives off what he can earn through endorsements and similar gigs. Calderon did the same thing.
“That was my key – I was always low profile, trying to save as much money as I could.”Jose Calderon
That’s what we hope all NBA players are doing. Hell, that’s what we hope everyone is doing – living within your means, so we don’t have to make pt.2 of this list.