You're right, of course.

But often there are obvious and "easy" answers that are anything but easy for the person who needs those answers.

"Just cheer up, depressed person!"

"Just eat less and exercise more, fat person!"

"Just stop shooting up, heroin addict!"

"Don't accept generic lifestyle creep, pro athlete who's teammates are all living it up like they live in a gangsta rap music video!"

I'm sure there are lots of pro sports players that get and heed advice just like yours, and finish out their short and bright sports career well financially set for their remaining 60-ish years when they're no longer capable of earning half a mil plus a year being athletes.

But I'm also fairly sure the career and lifestyle, and the managers, hangers on, and sycophants they're surrounded with push then hard the other direction.

I'm not from the US, so I don't have a real understanding of US pro sports and the way people end up there, but I have this impression that it's "one of the ways out of the ghetto" for at least some of them. People who won the genetic lottery, but lost the birth demographics lottery. They've never had generation wealth or even a middle class safety net. They don't have family or friends who have experience or advice about what to do with suddenly having way more money that anybody the have even known. They don't have family or close friends who can recommend trusted financial advisors or lawyers. Any advice they're getting risks coming from people they ane not certain they can trust to have their own interests at heart, and aren't trying to skim their own percentage off the top.

I don't exactly pity someone who earns 500k+ a year in a short pro sports career, and blows it all ending up poor. But I think I can understand how the system is set up - if not to actively encourage that outcome, at the very least that system probably doesn't do as much to protect against it as they could.

> "Don't accept generic lifestyle creep, pro athlete who's teammates are all living it up like they live in a gangsta rap music video!"

I'm not sure lifestyle creep is actually the main problem that celebrities going broke suffer from. Stereotypically the lifestyle is something they can afford, but they make bad investments.

> Just

I often think this is the biggest word in the English language.

Similar to how I think "might as well" may be the most expensive phrase.

I call this "justing".

Justing trivializes life entirely.

Can you expand on that? I feel like it’s the most misused and overused word in my vocabulary and one I wish I could just get rid of a lot of the time and never seem to manage. It just creeps in.

Just in the usage being complained about argues that whatever it is modifying does not need or benefit from analysis.

It just creeps in, but why? Why does it creep in? Often because we do not want to do the complicated analysis as to why things are the way they are because then it does not validate our preferences which are often emotional and not movable by logic anyway.

Just exercise more, fatty, says that the problem of being a fatty has a simple solution that anyone can see and there is no need to argue the point here. Start jogging!!

Just in the rather archaic meaning nowadays as being right and proper and what should happen in a fair and balanced universe is tangentially related, the archaic meaning of Just is memetically echoed in the assertive mode of Just doing things. If the world was fair and balanced and most of all really simple then Just jogging would cure the fatty, but it doesn't.

on edit: changed than to then.

You are both right. Yes it’s very easy to just eat less or spend less. But it’s also nearly impossible for the obese or the athlete respectively. Because we need to recognize people don’t really have free will to do what they know is best. If we recognized that and acted accordingly then the world would be so much more reasonable to live in.

I think there's an even simpler point that people who make fun of athletes for blowing their paychecks instead of saving them miss:

* These are elite athletes at the top of their pyramid, which means they have an absolutely bonikers elite competitive drive that got them where they had so far.

They were probably the best player on every team they've been since kindergarten. They've made it to the top of the pyramid and most want to keep going. Championships, all-stars, MVPs, all of these are things they are USED to getting at every level so far, and they want to keep going.

So when they sign there $X00,000 rookie deal they're not thinking "OK how do i save the most of this for my retirement", they're thinking "how do i get $Y,000,000 deal next? And the $WZ,000,000 deal after that?" And of course then I'll be set for life, and it will be easy to save and retire cuz i'll be rich.

This is just human nature.

> Spend (a lot) less than you make. At 500k/year anywhere in the US, you should easily be saving 200k / year.

$500k/year sounds like a lot, but that's enough that taxes are going to take a large bite. Only the biggest stars can get their income deferred beyond their career. Because of the nature of the job, you're going to have larger housing costs: when you get traded, you need to find somewhere to live quickly and you might be on the hook for the old lease for some time; depending on the league, off-season training may happen in a different part of the country than the regular season, so you might need housing there too... Moving costs probably add up, because trades are immediate.

If you're only in the league for 5 years, chances are you're spending some time in the minors and you're typically not earning at your headling contract rate then... Also, a lot of the headline rates include bonuses for winning the championship which statistically few teams and players do.

There's also the problem that yes, these people need financial advice because they don't always have financial skills, but they also have trouble picking financial advisers because they don't always have financial skills.

Also, young people of all income levels get themselves into trouble with finance; higher income probably makes it easier.

I certainly agree that $500k/year for 5 years should leave you well off after, but it's not that surprising that it often doesn't.

I think we’re mostly agreeing, but I feel this is a little misleading:

> $500k/year sounds like a lot, but that's enough that taxes are going to take a large bite.

It seems to imply that taxes are going to make the $500k income life surprisingly hard, but let’s do the math. In California, with $500k income, your effective taxation rate is 41%, looking here: https://smartasset.com/taxes/california-tax-calculator#M0SXJ.... So you’re going to take home about $300k after tax!! I think that’s still _so much money_. I would struggle to spend that even if I tried to. Ya, the taxes are higher. But it’s not that big of an issue, once you’re making a ton of money it just doesn’t hurt much. That’s why graduated tax rates are tolerable to begin with, imo.

$300k net and you want them to save $200k. $100k net goes a long way, but they're probably renting at least two places, a lot of eating away from home (much of which I'm sure gets covered by the team, but probably not all of it) a lot of excess transportation. Excess tax prep cause of all the working in multiple jurisdictions, etc. Things will add up; thankfully I have all the coordination of a newspaper so I don't have to deal with the accounting problems ;p

Idk, maybe I’m out of touch, i still think 100k for loving expenses is more than enough. A nice apartment in Mountainview is like $3500-$4000/month. If you have to rent two apartments, presumably you’re not renting both in such an expensive area. I’d think housing can be covered by 60k/year pretty comfortably.

You need a certain kind of personality to be responsible financially, and it doesn't overlap with the personality required of a pop star or sports star.

Quite a few stars get scammed. "Our accountant/manager stole all the money" is not an uncommon thing.

Music and sports both have shady links to organised crime, so it's not a given that stars are going to be surrounded with the kindest and most professional people.

I know nothing about pro sports, but:

To be a good "team player", it's good to be liked by your teammates. If you want to be friends with your teammates, who all spend money like there's no tomorrow, it probably helps if you do the same.

I'm not saying you can't save up as an athlete, but it's probably harder than we think.

Seems unlikely to me. At that level (minimum salaries in NBA are around $1~3m, depnding on years of experience), even a 10% savings rate could ensure you're never totally "broke." I would find it hard to believe that the difference between spending 100% and 90% could be at all noticeable externally.

Logistics are a nice guard rail for the pro-sport wealth management conversation. Let's presume rates of success are still low. Why.

Consciousness. We all have a wealth consciousness.

>They do often go broke after their career. That is sad. It is also completely avoidable with _very_ basic financial planning. I think feeling sorry for them is a disservice, because it makes it seem that this outcome is hard to avoid. It's not hard when they're making 500k+/year:

this is a good point and also I believe obviously wrong.

What are the stats on people making 500k a year on losing that going broke? Do they outperform sports stars etc.?

If it is the same then that implies that on the average people do not handle 500k basic financial planning well, or two that basic financial planning won't do what you say with that amount of money (for what, 5 years?). At any rate it would mean that generally people suffer this way and thus it is doing a disservice to point out how dumb they were for not doing basic financial planning.

If it is not the same then it implies that there may be something about the career that makes it harder then it does for other people in which case you are doing even more of a disservice.

I believe it is actually there is something about the career that makes it harder (this belief is formed by just thinking about it and doing absolutely no data analysis because I just do not have the time to devote to it past this HN post)

But I think we can create a thought experiment that shows why it is different

Many of us here are familiar with careers the top of which make 500k a year, there are a few engineers who could make that much. Or management at tech firms, it doesn't matter. There are people who can make that much.

Now if you lose your 500k job in tech what happens? You probably fall down a level to a lower paying job in tech. Let's say 390,000. That's a significant drop, but it's still a pretty nice wage.

The reason for this is because the tech career is a pyramid, 500k at or near top. And a pyramid means that the levels lower than the higher levels are wider (this being an analogy) and being wider has more entries for you to fall into.

Sports is also a pyramid. Or really several pyramids. There is the small pyramid of multi-million dollar players who can fall into single millions and then into the hundreds of thousands. But mainly the pyramid you are dealing with is an inverted pyramid. That is to say the sports career chart is top = player, most players, when you fall out of player level you fall into a level with fewer slots - coaches, commentators, agents, recruiters. If you can't fall into one of these slots and perform adequately (perhaps because you are doing a high paying job that also has high risks of causing brain damage [depending on sport obviously]) then when you lose your 500k sports job you are probably significantly worse off than most of us are when we lose our 500k programming jobs (obviously counterexamples abound, like if you lose job due to illness that means you won't get 390000 programming job either)

Anyway I believe your point that these people should not be pitied over much because they could handle their problems with basic financial playing probably is a bit mean, and one I often hear around here.

as it the case with most analogies, the pyramid analogy is severely flawed, but I do think it makes the one point clearly which is that when you loose a 500k programming job there are more lower paying jobs in the same industry you can fall into, when you lose a 500k sports job you might not have a lower paying job you can fall into because there just aren't that many in the sports industry.

Your ideas are intriguing and I wish to subscribe to your newsletter.

Do you really? I keep a blog here[1], but it’s very sporadic and not very focused — i mostly write to satisfy myself

[1] https://bagelpour.wordpress.com