OTish: does UM have a financial education program for athletes?
Not to sound harsh, but if there was a program offered to athletes, I certainly hope it would be offered to the student body at large. Every student, athlete or not, is getting the same education at Michigan. Athletes aren't the only ones who are going to make money.
Yes, I think a crash course on basic principles of living within your means, saving money for a rainy day, and finding solid, reliable investments are skills every young person should come to understand.
Amen. Most young people need something like this, not just athletes. I've seen several people get their first jobs but have no idea how to budget or plan for the future. I think the taboo we have about talking about finances leaves a lot of young people from every walk of life a little unprepared when they start off on their own.
While it would be great to have a finance course like that available to all students (I remember learning Wash U in St. Louis has a class like that when I visited), the financial challenges faced by athletes who go pro are very different from regular students. No need to make it a fulltime class for the players, as I doubt more than 15 would go pro in a single year across FB,BB, and hockey, but there should be some type of instruction.
Farnn touched this a little, but there's a major difference between what I made coming out of Michigan and Denard is going to. I still don't make enough money to worry about securities, longterm finances with a limited amount of years of earned salary etc. he will need to immediately.
Some might argue that those with the least money would have the most to gain from a financial education class.
For professional athletes, they are going to be making an immense amount of money immediately -- when they are young and impulsive -- that will have to last them after their career ends. A ten year career in the NFL is long and then you have to live on that or find something else to do. There are going to be people looking to get a share from all side -- friends and family and "investors" and "financial advisors."
That's incredibly different than most of us who need to learn that we can't have everything we were raised with in our parents' house when we are first starting out, or how to account for the costs of adult life we took for granted living at home. (Assuming most of the readers are middle class and saw parents writing utility bills and hitting the credit union savings account for unexpected auto repairs.)
But I don't know tat the class has to go beyond what basically the leagues like the NFL offer, and a lot of players ignore: don't spend $40k in one night at a strip clubs; don't pay for everyone you know to live; don't buy 10 of everything; and don't fuck every woman you meet....and if you do, at least wear a condom...particularly after you're already married.
You can't protect athletes, pop stars, actors, or investment bankers from greed and stupidity. Guys who seemed like they had a good head on their shoulders from day 1 like Jamal Mashburn seemed to do ok for themselves. Fuck ups like Andre Rison aren't going to stop being fuck ups because you put them in a nice suit.
You can't teach common sense. Guys who spend four figures at the strip club, or have half a dozen kids aren't going to benefit from a class.
Hello, 1990! Haven't heard that name in over a decade.
Syllabus: Don't be stupid. Boom, now where's my tenure?
You honestly think the players that would benefit from this educational benefit would actually take this class if offered?
I could teach it and it wouldn't take long
"Spend no more than 50% of what you make, don't let friends or relatives invest your money and you don't need more than three cars, two pounds of expensive jewelry and you don't owe your childhood friends your lifestyle."
NCAA needs to make it a requirement for eligibility. Make it a short seminar course offered every year, and they have to take it every year in order to get on the field. The more times they hear the same common sense stuff, the more likely it will eventually enter their subconscious.
What percent of NCAA athletes will ever make a living as a player in their sport, let along make enough money to have the kinds of issues discussed in the 30 for 30 piece? This is best left to the professional leagues where they can, and should, work to educate new players in what lies ahead. I ran track at Michigan. Why would I have to take such a course to be eligible? What would be the point (assuming the athropology major non-athlete is not required to also take the course)?
Well, I think financial planning should be required for everyone, but the information needed for athletes in the lucrative sports is obviously different than the athletes and non-athletes in every other part of the university. Requiring a half day seminar once a year for every football, basketball, baseball and hockey player, even if only a tiny percentage of them will ever have to worry about it, doesn't seem unreasonable to me. I'm not talking about a full 16-week course every semester, or even once in their college career. I'm talking about around 12-16 hours TOTAL over their four years.
No, financial planning should not be required for everyone. Dear God, who's job is it to decide what should be mandated for everyone? When did Universities become places for remedial learning? What about home ec.? Shop class?
And what else should we require them to learn about? This is at issue because of the 30 for 30 piece, but what about other issues. When a 30 for 30 piece comes out documenting something else, should D-I universities add that topic to a mandatory seminar? This is silly.
I remember hearing that Avant took out a loan to buy a hummer with 22" rims (even the spare) while he was still at Michigan under the assumption he would be getting paid once he got drafted. So, I doubt such a program exists or is taken seriously
Well Avant has done pretty well in his pro career, so maybe he got some good advice.
i don't get why this isn't more common, or at least more commonly discussed. andrew luck, for example, should've taken out loans and an insurance policy when he decided to come back. any bank that wouldn't give him a loan, provided he was insured against loss of future income, is run by morons.
for legit draft picks (I think it's something like players graded by draft boards in the first couple rounds in football and hockey, first for basketball and...ten?for baseball) but taking out a loan against future sports related income is an NCAA violation. Avant would have had to wait until bowl season was over to sign those loan papers.
it really almost defies belief how many class action lawsuits the NCAA deserves to have brought against it
but FWIW here's the NCAA link about disability insurance. It's basically what I was saying, but it's players graded in the first three rounds of NFL and NHL by those draft boards, and first round in NBA, WNBA and MLB. The NCAA acts as a broker to loan students money to pay for up to five million in coverage (your example, Luck, probably got a lot more since his family could, presumably, afford the payments).
Is he still in the league?
Myself and knew this topic would arise here. Bernie Kosar sat in front of you during a hour and a half describing how his family bilked him with bad advice and leveraging guilt for Millions of dollars. Andre Rison gave musicians $30,000 for new equipment, for what I have no idea. Keith McCants bought multiple houses and a yacht. A 3 credit course at any University shouldn't have to lower themselves to tell athletes that they shouldn't "Make It Rain" at the freaking strip club. Bernie Kosar's Dad, who represented Bernie, had a One Million Dollar deal with the Browns in addition to the unpaid loans and paid mortgages at the expense of Bernie. if this was a docu about lotto winners running amok with their money I'm sure many would call them losers and many would laugh at their demise. For an institution to add a service on "How To Be A Millionaire" is a bitch slap to everyone who made it on their own whether Rich, Middle Class, Poor or otherwise.
65% go bankrupt. Are they all "making it rain" because it seems unlikely. It doesn't seem difficult to set up a program for athletes. Why wouldnt we do that and then be able to say we prepare you to be successful longterm?
And the NFL spend time with rookies about the trouble that they inevitably find themselves anyway. A class, as they mention in "Broke" the athletes fall asleep. It was also noted that some athletes never wrote or simply can't write a check. These are societal problems and if there was a class that cured it, there would be.
If Their coaches were involved in this? I'm not saying a 15 week course here. I dont care about nfl rookies, I care about Michigan rookies
I hope Michigan coaches give all players, future Millionaires or not, life lessons. I'm certain they do, Make It Rain!
Why should it be a bitch slap to people who "made it on their own" for there to be a service teaching basic financial skills--something a great many 18-22 year olds lack--targeted at those most likely to need to manage a non-trivial amount of money shortly after graduation? Do you have to be an autodidact, or have parents who think it's important to teach you how to manage your money, to deserve to understand money management? That seems like an awfully weird thing to think. I mean, did your "making it on your own" involve the acquisition of some hard-won basic financial literacy that others shouldn't just be handed, because that would somehow undermine the hard work you had to do in order to become minimally financially literate? I really don't see what plausible idea is behind this.
That class would be more useful in the ESS EE CEE
Zero to bankrupt in SPEEEEEED!!
They go from poor to middling salary to rich
They go from poor to really rich to rich to poor again.
Junior Hemingway says "No"
The course: Not squandering million of dollars, probably applies to 1-2% of Michigan varsity athletes. The athletic department might be able to offer seminars but a university currriculum doesn't usually include "basic life skills" courses.
Maybe a course that would help a larger group of students: How to find a spouse who truly loves you and will be a great life partner- not a gold digger!
This topic doesn't really have anything to do with college athletes who, presumably, are all unpaid amatuers. Prepping the star kids for the big money contracts is really more of an NBA/NFL thing.
If this is going to be available for college athletes, then it shoud be available to all students and at that point, quite frankly, is probably worth pointing out that university is not really the place for teaching basic life skills that can be learned practically anywhere with a bit of self-initiative.
UofM you are literally surrounded by hundreds of people who will be very succesful in their financial careers one day. Not to mention the thousands of UM grads who would be willing to provide financial advice to said athletes.
Its really an individual thing, and its up to everyone to take responsibility for thier own financial future. The biggest problem I see today is people are not modest about their lives. They all the want the big houses, flashy cars and party, party, party lifestyle. Even being just a little modest could save people thousands over the long term. And that's not just athletes, every day people are absolutely horrible at basic finance.
One of the biggies for me is people buying expensive SUV's and wondering why they spend so much on gas. You litterally save yourself several thousand a year buying a midsize sedan that gets 10-20 MPG better fuel milage with a much lower payment.
But honestly with as horrible a job that our schools have done for the past 3 decades just teaching basic finance stuff, it really should not be surprising that people run into trouble. We could use a nationwide class on finance.
how do schools get the blame for that?
Dude was just about the only guy sure to be getting paid for playing football (the only way he wasn't was a severe accident, for which he was probably insured), and yet he still took an off season externship and keeps his financial business skills ready to go at a moments notice. He knows how to handle it, and some day, he will live like the Russian Billionaire we all know and love.
In all seriousness, I don't expect my wife and I to ever exceed a median or even low-end middle class income. We took the classes we wanted and are becoming what we want to be, and what we want to be doesn't get rich. None the less, we have a 401K, Two Roth IRAs and a Pension set up and accumulating. We're 28. It really blows my mind that a guy earning millions can't find a way to put away 5 or 10% per year.
There are definitely some resources out there at Michigan, at least now that financial literacy is a going concern generally -
As for classes that I am aware of anyway, I have a cousin who is taking Economics 101 on the Ann Arbor campus, and one of the workshops that you can sign up for concurrently with the class, according to him, is personal finance (one of the microeconomics workshop selections supposedly), so evidently such a class exists for everyone then. I believe the Business School also had "Financial Literacy" as the theme of the Elliott Initiative, and personal finance classes were offered in Ann Arboras well as Dearborn. I think there is also a student group that was recently formed as well - "Students Promoting Financial Literacy"- which also promotes various resources offered by the Office Of Financial Aid, so there is that as well.
I honestly wish that these sorts of resources / classes had been around when I was an undergraduate in the mid / late 90s. That would have been an ideal time.
A big part of the problem is that most people don't think and act with long term considerations in mind. I was asked how big of an office space I needed at my new job. Tongue in cheek, I responded with, "how big of a space do you have?" Regardless of the size of my workspace, my stuff tends to cover every surface. Most people take the same approach to budgeting. They put 5-10% away and then spend the rest. For the average Joe making ~$50k/year, this is ok because he's working long term (let's just say 40 years).* So let's just say he puts 10% away ($5000/year) and makes a healthy interest rate (10%). After 40 years he has $2.2 million. Now he can retire and live off of the interest (about $200,000 a year). Ok, so what is my point? After all, I've just given you the same speech any financial planner would give to you, sans cheap suit. My point is this: The model we describe doesn't work for pro athletes. At least, not very well. Think about this. Most pro athletes make ~$1 million/year, but only have 5 year careers. If they invest $100 k every year, at the end of their career, they'll have ~$600k invested (assuming the same 10% return). This means that the athlete will have to DRASTICALLY SLASH his** lifestyle from spending $900k/year to $60k/year. Can you say, "recipe for disaster?" I sure can. Something more sustainable would be to tell them to put 50% away each year. That way they are putting $500k away each year and have a $3 million nest egg ($3,052,550) after their career. Going from spending $500k to $300k is more reasonable.
One last point. Warren Buffet lives in a ~$250k house, and he is far richer than any of these pro athletes. (See this article as citation/food for thought. Ignore the long rambling comment.)
* Note, these are just simple numbers. I'm not going to do a sophisticated analysis. I think that this makes my point.
** I know, not PC to say his instead of his/her. Cuz girls are people too. But this pro sports model doesn't work in the ladies pro sports.
I used to teach a 12th grade Economics / Finance class through Junior Achievement -- taught it in numerous places around the country including inner city schools in NYC, the "Fame" school in NYC, and schools in middle-to-upper-middle-class areas in Texas. It was always disappointing to me regarding how low a level of financial literacy these kids had. And, for the record, that was pretty consistent across all the schools and income levels. This is a more fundamental societal issue (we have become an instant gratification culture) that would require more than a short-course at Michigan to rectify.
In the end, however, regardless of what income bracket you are in is not how much you make, but how much you can save. And, coupled with that, is what you do with savings.
The athletes going broke that we hear about tend to fall into two camps -- they either didn't save anything or they turned over their investment decisions to the wrong person (e.g., their uncle instead of Fidelity).
As a number of people already noted, this isn't rocket science.
I agree, the lack of common-sense financial education is appalling. I know that many college students have never balanced a check book. Sadly common sense, when it comes to personal finance, isn't so common.
Pro athletes are just like lotto winners. They suddenly have more money than they, their family, or their former peer group has ever had in their lives, and supplicants appear as if by magic.
Everyone they have ever known suddenly wants a piece of their bank accounts. Distant relatives become "close relatives," and acquaintances suddenly become "best friends." And, of course, the golddiggers line up for a chance to "state their cases" in the sack.
I don't think there is really a way to prepare anyone for that; there are some things that only experience can teach.
And agents can be money-suckers, too. I worked with a woman whose husband was a good enough basketball player to get into the European league. She came back from meetings with prospective agents shaking her head over the services they were offering. She said they would pay all bills--even send your mortgage check in every month; very basic normal easy things. But all for a fee, of course.
Lifestyle is one of the many reasons that sucks many athletes up like a vacuum. The lifestyle I’m referring to is maintaining the appearance of being wealthy and keeping up with the Joneses. This mentality lends itself to reckless spending. On top of wild spending habits, it is really important to have a proper education on financial management. This will help our athletes to take the steps to the road of financial wellness.