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NFL Players taking out HUGE LOANS - CBS Sports - The Falcon Jedi - 05-19-2011 12:25 AM
Players taking out ridiculously huge loans
Posted on: May 18, 2011 11:31 am
Score: 120
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Posted by Josh Katzowitz
More (scary) news about how the lockout is affecting those players who didn’t think to save their money when they had the chance.
This news comes from the Twitter account of Rich “Big Daddy’ Salgado of Coastal Advisors, an insurance consultant company that counts NFL players (and other pro athletes) as part of its clientele.
NFL Labor
On Tuesday, Salgado tweeted that he knew of an NFL player who just took out a $500,000 loan with an astronomical interest rate of 23 percent.
We’ve posted stories like this before, but a loan of a half million dollars with such a huge interest rate might tell you a tale of where some players’ financials currently are situated.*
*In the toilet.
The biggest problem with this: many players wouldn’t be getting paid much at this point anyway. It’s still the offseason, and though some players receive workout and roster bonuses, it’s not like players receive the bulk of their money at this point of the year.
Which means, once September rolls around and players still aren’t cashing checks (during a time in which they normally are), there might be some real trouble out there.
For more NFL news, rumors and analysis, follow @cbssportsnfl on Twitter and subscribe to our RSS Feed.
RE: NFL Players taking out HUGE LOANS - CBS Sports - The Falcon Jedi - 05-19-2011 12:26 AM
This is funny to me. Just shows you how financially responsible players are. Taking out half-million dollar loans???? I wish a bank would give me that kind of loan.
RE: NFL Players taking out HUGE LOANS - CBS Sports - mdrake34 - 05-19-2011 09:27 AM
(05-19-2011 12:26 AM)The Falcon Jedi Wrote: This is funny to me. Just shows you how financially responsible players are. Taking out half-million dollar loans???? I wish a bank would give me that kind of loan.
They probably would, and you would probably get a better interest rate. 23%? Jeez.
RE: NFL Players taking out HUGE LOANS - CBS Sports - papachaz - 05-19-2011 09:58 AM
I'm going to bet that when Beef reads this, he'll just about crap in his pants....
wonder what player this is, isn't 23% illegal? i really doubt the honesty of this story
RE: NFL Players taking out HUGE LOANS - CBS Sports - Dale4Saul2Red0 - 05-19-2011 11:32 AM
I don't get how people don't know how to balance their money? If anything put some in a fund and let it grow some. I mean damn how stupid can some people be.
RE: NFL Players taking out HUGE LOANS - CBS Sports - Shnikies - 05-19-2011 11:46 AM
(05-19-2011 11:32 AM)Dale4Saul2Red0 Wrote: I don't get how people don't know how to balance their money? If anything put some in a fund and let it grow some. I mean damn how stupid can some people be.
As much money as there bringing in you would think they would have some sort of financial adviser. I know I would.
RE: NFL Players taking out HUGE LOANS - CBS Sports - phalcon phil - 05-19-2011 11:51 AM
(05-19-2011 11:46 AM)Shnikies Wrote: As much money as there bringing in you would think they would have some sort of financial adviser. I know I would.
Some of these "advisers" are leeches or yes men. Either way a lot of these guys are either not getting good advice or simply ignoring it.
RE: NFL Players taking out HUGE LOANS - CBS Sports - Beef - 05-19-2011 01:21 PM
(05-19-2011 11:51 AM)phalcon phil Wrote: Some of these "advisers" are leeches or yes men. Either way a lot of these guys are either not getting good advice or simply ignoring it.
This is actually what I do for a living. My team manages money for several pro athletes, but mostly young guys just coming out of college and mostly baseball players. Although we do have an old Falcons coach as a client (hint: late 1970's) and a couple obscure NFL players (no Falcons), but they aren't of the "I gotz ta haz my bling bling" mentality if you catch my meaning. One of my partners is an ex-NFL player and another is an ex-MLB player.
That said, you are somewhat correct, there are droves of "leeches" out there who gamble with these guy's money and put them in investments that pay huge commissions and they don't really care about the person.
We have several kids who have signed big league contracts with MLB teams and are in their farm leagues working their ways up, but got anywhere from $1 million to like $3 million signing bonuses. We're a full service high-level estate planning and portfolio managment team. We sit down with these kids and their parents and educate them on how to NOT be taken advantage of and why it's not always smart to pay 100% cash for certain things. We get the kids money in properly allocated diversified portfolios and "advise" them on a regular basis about budgeting and conserving.
We've had some clients that just wouldn't listen too and we've essentially fired them. They'd get a couple million, we'd setup a great portfolio, then we'd get the calls... "I need $150k for this car and $110k for this other car and will probably need more as I'm looking at like 2 or 3 other cars I want.", "I need $50k for this jewelry.", "I bought my best friend a car, need $80k. Oh and $50k for his girlfriend's car too.", "I'm paying cash for this house, need $750k. My brother's house is $400k, need that too." and it would go on and on and on. They'd get down to $0 in their portfolio and shoot the financial plan we built for them out of the water and it would never stop. Every paycheck they'd spend like 90% of it immediately. We'd tell them they're only going to have this career for between 5-10 years if they're lucky, but they wouldn't listen. So we don't take on those types of clients anymore. You simply can't help fools.
And it's not about being "yes men" either. The SEC/government and the regulated investment account contracts don't allow us to say "no". We try by explaining things and giving advice, but they just don't listen.
We got good kids now who understand what we teach them and they do the right things and let their money grow so when they can't play the game anymore, they're set for life with a very good lifestyle. Doing our planning sessions with the parents involved really helps too. I would venture to say though, this type of person is far from the norm. Most of the athlets we know have no discipline and blow all their money like idiots.
RE: NFL Players taking out HUGE LOANS - CBS Sports - mdrake34 - 05-19-2011 01:29 PM
The vast majority of these athletes came from absolutely nothing. It's still not a valid excuse to be an idiot with their money, but it's just their natural tendency to immediately blow it all. If more of them hired guys like Beef and actually listened to him, they wouldn't all go into bankruptcy after 2 years.
RE: NFL Players taking out HUGE LOANS - CBS Sports - Beef - 05-19-2011 01:30 PM
(05-19-2011 09:58 AM)papachaz Wrote: I'm going to bet that when Beef reads this, he'll just about crap in his pants....
wonder what player this is, isn't 23% illegal? i really doubt the honesty of this story
It's outrageous but not illegal. These guys are out or nearly out of money because like I said, they have no discipline and spend it all immediately without considering the future.
Whoever this is, they needed an un-collateralized loan apparently so 23% on $500k is about right. It's an ultra-high risk investment for whoever gave the money out, it diserves a large reward. Whoever the player is, he's obviously thinking he'll have a paycheck within a couple months and can simply pay the $500k back in full with only a month or two of interest. Hopefully he's right. If not, holy shit is he going to regret it.