Athletes are some of the wealthiest people in the country. So why do so many of them end up bankrupt?
Athletes like Allen Iverson, who went broke after earning $154 million in the NBA, and Mike Tyson, who was once worth about $400 million and later had less than $700, are examples of a large number of professional athletes who have filed for bankruptcy, according to Investopedia.
Athletes have a smaller earnings window compared to a traditional career where a typical person works 30 to 50 years.
A smaller earning period combined with a lack of financial knowledge usually means athletes are burning money just as fast as they are earning without saving for the future.
Iverson, for example, lived based on his peak earnings, but didn’t save money for later in life.
Extravagant living often leads many athletes to bankruptcy as well. Investopedia recommends living a lifestyle that doesn’t exceed your budget, unlike most professional athletes.