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Going for broke: Many pro athletes still struggling with finances

Ryan Dorfman, Cronkite News on

Published in Home and Consumer News

Carlos Dias Jr., a wealth manager for MVP Wealth Management Group in the Orlando, Fla., area, who works with a variety of professional athletes, believes mismanagement is a problem and that many athletes work with the same wealth manager or financial advisor their whole career.

"They don't know how they're invested. They don't know what they're doing. They don't know if they're being overcharged on fees. They have no clue," Dias said. "They just have somebody that's 'their guy."

Many accountants exist that also call themselves "business managers," Dias said. In the last year alone, he has seen at least two big-name "business managers" that celebrities and athletes have sued.

"There's a lot of mismanagement in this business," Dias said.

What people read about an athlete's salary isn't what the player is taking home. Many don't realize that Giancarlo Stanton will receive about half of his $325 million mega-deal.

It's not only taxes but money to agents, financial advisers and others that cut into paychecks.

Another thing former players say is hurting athletes' financial health is marriages that end.

"Early in my career, I heard a league official say that once they retire, there is an 87 percent divorce rate among NBA players," former NBA player Adonal Foyle wrote in "Winning the Money Game: Lessons Learned From the Financial Fouls of Pro Athletes." "Although I haven't verified this number, based on what I've witnessed, it seems about right."

Dudley believes that "the number one thing for going broke is obviously divorce. Off the rip, you lose half your money to that. The second thing is kids. Especially out of wedlock, you have two or three kids to different women; you're paying all that child support. So, I think guys are smarter when it comes to that than they were 10 years ago."

He also believes athletes are starting to make "wiser choices. Fewer cars, less jewelry, buying smart homes. I don't think guys are going for the hotel and restaurant things. They're smarter than that, and I think the NBA now puts money into your account to help you get to your 401(k) and pension."

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