During this week’s NFL Draft, many young men will achieve their dream of becoming a professional athlete. Some of them will also become instant millionaires.
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There’s no shortage of stories out there about professional athletes who make — and lose — millions of dollars. MarketWatch spoke with several current and former NFL players, as well as an accountant who advises professional athletes, and asked them what financial advice they’d give the 2017 crop of NFL rookies to help prevent them from being another cautionary tale.
“One minute you’re bouncing a check at Pizza Hut, and the next you’re cashing a check for $11 million,” says former No. 2 NFL draft pick Ryan Leaf, describing how ill-prepared he was to handle the fame and fortune of being a professional athlete.
Leaf, who was drafted right after NFL legend Peyton Manning in 1998, struggled and wasn’t the star in the NFL that he was in college. His rookie contract was the largest ever at the time: $31.25 million, with an $11.25 million signing bonus with the San Diego Chargers.
But two days before the 2017 NFL Draft, he said, “I left prison two years ago and couldn’t rub two pennies together.”
Drug addiction and burglary landed him in jail. Since he was released he has been doing well and is now the program ambassador and part owner of Transcend Recovery Community, a sober environment he calls transitional living — between treatment and living on your own.
He is thankful that years ago his dad put some of his money away and he can’t touch it until he is 65. And he also has money saved in the NFL’s generous 401(k) and pension plans.
“Don’t imprison your future self by getting used to an expensive lifestyle. You’ll end up a financial ‘has-been’ working at a job you hate for much longer than you ever imagined,” said Patrick Kerney, who played in the NFL for 11 seasons and was NFC Defensive Player of the Year in 2007 as a member of the Seattle Seahawks. Kerney, now 40, is director of business development at National Fire & Casualty Investments. He got his M.B.A. at Columbia University after he retired from the NFL and was also vice president of player benefits at the NFL.
Leaf, 40, recommends players take advantage of the NFL’s 401(k) plan. For every $10,000 a player puts in, his team and the league each put in $10,000, for a total of $30,000 — what he calls a “two-times match.”
He says a lot of rookies don’t want to set money aside for retirement though. “You feel invincible when you’re that age. You don’t get perspective until it’s too late.”