1. Not everyone can live like an NBA star. The first mistake that most new-signees make is trying to treat everyone in their ‘circle’ like they’re in the same tax bracket. Purchasing homes, clothes, and cars for friends and family is a common practice, with players sometimes supporting multiple households. “You buy this big house for those people, and they no longer want to drive the low-end car to go with the big house,” Raptors guard Jason Kapono told TheStar.com. “So the big house leads to the big car, to the better clothes, to the better restaurants and stuff. It’s a snowball effect.”
2. Overspending isn’t the only financial pitfall that young NBA players face. Many young, naïve multimillionaire athletes get taken advantage of by unscrupulous tax preparers, business managers and other service providers who overcharge for their services. Not watching your books can lead to being fleeced by those who are supposed to be working for you.
3. Investing is a powerful tool for generating more income and more long-term income for the young player who’s not going to get his own shoe or his face on a box of Wheaties®. “For a lot of guys, investing their money is the only way left to really build their income[s] further,” sports agent Len Elmore told bnet.com. “Their salary is already set with the rookie scales, and very few of them have the persona to command endorsement dollars. That’s naturally created more demand and more interest in investing.” – todd williams
