And Yet Another Example

It’s almost become a hobby of mine to “collect” stories of people who spend more than they make (or close to it) even though they have high incomes. For some examples, see Now $1 Million is Not Enough to Live On , Seven Costly Pro Athlete Screw-ups , and Stars Who Have Lost Fortunes . Yes, there’s no shortage of people who make a bundle of money and then spend it all (and even more!) Today’s addition to my collection centers on NFL players. They are, by the way, in the midst of negotiating a new labor agreement with the NFL owners. Well, it turns out many of them won’t be able to survive long if there’s a lockout and they stop getting paid. The details : Though a lockout has been threatened for years — and despite an apparent rise in the number of football stars safeguarding their millions — roughly 380 of the NFL’s near 1,700 players still live paycheck to paycheck, according to financial experts familiar with the league. While this may seem like a high percentage of highly-paid people, 22% actually isn’t bad. As a population, 54% of people live paycheck to paycheck (and another 15% go further into debt each month). Then again, the average person doesn’t have such a high salary either. Just how much do they make? It’s what you’d expect — they do pretty well: There is a wide variation in NFL players’ salaries. The average player salary for the 2009-10 season using USA Today’s numbers is $1,870,998. But the number isn’t particularly meaningful since superstars can earn far more and second- or third-stringers far less. The league rookie minimum salary is $320,000. As a reality check, $320k per year for playing a game isn’t bad. Do that for five years, and you’ve earned more than many people make in their lifetimes. Now I’m sure it’s difficult to “only” make $320k when some around you are making millions. But still — you have to control your spending no matter how much you earn (even multi-millionaires can spend it all), take responsibility for yourself, and forget what others are earning. Those 22% living paycheck to paycheck are going to be in a world of hurt if there is a lockout. And to add salt to the wound, they will be losing another precious commodity as well — time. A person’s athletic ability only lasts so long. So if they miss a year or so of their peak-earning years, it’s something that can’t be replaced. Ouch. So this is for those 22% of NFL players living paycheck to paycheck: When you get back to earning a salary (whether that’s tomorrow or a year from now), follow these two simple equations that will lead you to financial success  And if that is too hard, just focus on making your gap as large as possible, and you’ll be fine. Or, you can send your money to me, and I’ll manage it for you…

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And Yet Another Example