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Stories of retired professional athletes falling on hard times have become so common that ESPN created a documentary called “Broke” to shine a light on their plight. Former NBA All-Star Jamal Mashburn knows he won’t be among the retired athletes who’ve gone broke. Benzinga looks at how he bucked the grim trend.
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A toxic combination leads to financial problems
The irony of NBA or NFL draft day is that most people watching, and even the players themselves, believe they are set for life after their name is called. Unfortunately, far too many players discover that life is a marathon, not a sprint. This means that getting an early head start in the race for lifelong wealth does not guarantee that young professional athletes will end up there.
Despite earning millions of dollars, many players are plagued by a toxic combination of circumstances that ruin them financially. First, there’s the brutality of youth. Combine that with the reality that many professional athletes come from financially disadvantaged backgrounds, leaving them the breadwinners for themselves and their extended families.
Then there’s the fact that many young professional athletes lack financial literacy, which most young people suffer from. However, most young people don’t have millions of dollars at their disposal, and when they do become so wealthy, it’s usually much later in life when they’ve learned about things like debt service and planning for the future.
Bad business decisions
Many professional athletes do try to build their future, but a lack of financial literacy leads many of them to invest in the worst types of businesses. By participating in risky operations or letting family members manage their finances, you often burn through millions of dollars in capital that could be better invested in traditional or alternative offerings.
Sadly, many more professional athletes are ripped off by their agents or “financial advisors” who work with agents to rob their clients blind. Combine this with lavish spending on depreciating assets like car collections and jewelry, and you end up with dozens of former players who don’t realize they’re in desperate financial straits until it’s too late.
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How Jamal Mashburn Broke the Trend
When he left the University of Kentucky in 1993, Jamal Mashburn was one of the most sought-after players in basketball. At 6’9″, he had the size of a power forward but the offensive skills of a guard. This made him nearly impossible to defend and he scored at will for most of his career before it was cut short by a series of injuries.
He retired in 2006 with a very solid 19.1 ppg career average, but a much shorter career than he expected on draft night. This is where many former pros fall short, but Mashburn had spent years preparing for his post-NBA career. He put his money where his mouth was and built an incredibly diversified portfolio that includes:
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A real estate agency
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Five car dealers
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40 Papa John’s Pizza Locations
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38 Outback Steakhouse Locations
He also sits on the board of Fairbridge Hotels International and is an advisor to cannabis brand Revolution Global. Today, the website Celebrity Net Worth estimates Mashburn’s fortune at $100 million. According to HoopsHype, Mashburn earned $75 million during his career. However, taxes and agent commissions ate up considerably more than half of that.
That means Mashburn has turned $35 million into $100 million, and he’s still profiting from his various business interests. It’s a rare off-the-field success story that has earned Mashburn as much respect in the C-Suite as he has on the field. While you may not start with as much capital as Mashburn did, you can still learn from his example. Jamal Mashburn realized that the key to investing is planning for the marathon, not the sprint.
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This article Former NBA Sharpshooter Jamal Mashburn Scored Even More During His Retirement originally appeared on Benzinga.com
