Bankrupt millionaires: Protecting the income of the wealthyBlog added by Mike McGlothlin CFP®, CLU, ChFC, LUTCF on August 20, 2014
Mike McGlothlin

Mike McGlothlin CFP®, CLU, ChFC, LUTCF

Fort Wayne, IN

Joined: March 06, 2014

Many people dream of living a lifestyle with millions of dollars of income, having people standing ready for your every move, and performing in front of thousands of people live – not to mention in front of millions via television. What’s important, however, is how those millions of dollars are leveraged and positioned for the future. The worst seems to happen to the people with most.

See also: What do professional athletes and producers have in common?

Recently, many young men became instant millionaires due to their athletic abilities on the football field. Highly drafted NFL players can receive millions in bonuses and guaranteed salaries. Clearly, this seems like a lot for playing a game. Unfortunately, these young men do very little to protect themselves and their investments. A staggering 78 percent of NFL players file for bankruptcy within five years of retirement. The numbers are equally high for other professional athletes. The bankruptcy rate remains at 60 percent for NBA players.

Professional athletes represent a microcosm of the American public. A lack of understanding about finances creates the opportunity for poor decisions while we are employed. A discussion on the future and the need to protect what you have continues to be absent in most financial planning conversations. And finally, we fail to protect our clients against their own irrational behavior.

See also: Even the invincible: when athletes need disability insurance

It’s time to rethink how we educate individuals, advisors and the general public. We have to prevent even our wealthiest clients from failure with protection from the unthinkable, guaranteed income for the future, and advice for how to use the blessings of today.
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