Robert G. Yetman, Jr. Editor At Large
Sports fans will recognize the name Vin Baker, a one-time NBA star who earned his way on to four All-Star teams during tenures with the Milwaukee Bucks and Seattle SuperSonics. Baker was also paid like a top-shelf player, as well, earning just under $100 million over the course of his career. However, like so many (too many) pro athletes, Baker has found himself at odds with his fortune, losing it all, and is now in training as a Starbucks barista in Rhode Island.
Baker’s is an all-too-familiar story; according to Sports Illustrated:
“• By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.
• Within five years of retirement, an estimated 60% of former NBA players are broke.”
While there has been some dispute over the accuracy of the figures cited by Sports Illustrated, we know, informally, that there is no shortage of riches-to-rags stories in the realm of pro athletes.
It’s an ugly picture, and one attributable to the usual amalgamation of factors – failed investments, along with a litany of poor lifestyle choices. When I worked in the investment industry, I came into contact with numerous, highly-compensated professionals who were essentially living paycheck to paycheck – as a young adviser, I remember being surprised by that, at first, but as I spent more time in the industry, I saw how “normal” it truly was; I came to realize that there really is no sum of money so great that it serves as a permanent indemnifier against unfortunate behavioral choices.
Vin Baker’s circumstances are more proof that earning a substantial sum of money is no guarantee against financial calamity unless you are making sound financial decisions. I wish him the very best, and appreciate the value that his cautionary tale offers to so many.