What should young NFL players consider about money? Plenty. Former players and others connected to pro football weigh in:
"If you can save 25% of your money, you're doing well. One of the major pitfalls is that a lot of guys are not content with putting money away and earning a return of, say, 8%. And then you've seen people starting businesses in things in which they have no expertise. A music business. A rim shop. A T-shirt printing business. Independent restaurants. Nightclubs. Cash businesses. That's where you can get in a lot of trouble." - Former NFL star and current ESPN analyst Keyshawn Johnson
"Do the math. I ask them if they can divide by two." - Carolina Panthers owner Jerry Richardson, pondering the impact of divorce
"An NFL parking lot is a lot like an exotic car shop." - Former NFL star and current NFL Network analyst Deion Sanders, on the pressure to keep up with the Joneses
"A lot of guys don't know what a swap is. They can't tell you anything about a hedge fund. But if someone says, 'I can take $1 million and turn it into $10 million for you,' it's like, 'It sounds good to me.' " - Consultant Rodd Newhouse of 44 management, on financially inexperienced players putting trust in financial advisors
"There's no quicker way to siphon wealth than to pay child-support at $5,000 a month for three or four kids. That's almost $250,000 a year. I've seen it." - Bryan Cave attorney Roy Hadley, on the impact of lifestyle choices
"You don't need to shoot for the moon. Stay conservative. You don't need a lottery. As soon as you can, own your house outright, because a pro football player's earning power is backward, compared to the average American." - Former NFL standout Ken Ruettgers, founder of GamesOver.org, on advice for young players
"You can talk about the Peyton Mannings and LaDainian Tomlinsons, but for the majority of the guys, after 3 1/2 years, their careers are over and they spend another four years trying to get back in. By then, they're 28, 29. They didn't take school seriously and they've got the rest of their lives. That's the normal story." - Former NFL lineman N.D. Kalu, on career longevity and preparation
Compiled by Jarrett Bell
Or maybe not.
As they begin life in the NFL, rookies also can ponder sobering fine print that tempers the allure of becoming rich and famous.
They could also wind up broke.
"I hope they save their money," says Keyshawn Johnson, former No. 1 pick, "and realize the NFL means Not For Long."
The average NFL career is just 3½ years. Yet the sweat equity routinely produces instant millionaires. The league's average salary in 2009 was $1.9 million. The $325,000 rookie minimum? That's seven times the average starting salary for a college graduate.
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Despite such cash flow, there is no shortage of current and former NFL players — like examples in other sports — stung by financial distress. Some have blown millions, even while aligned with financial advisors. Indulgent spending, poor investments, off-the-field transgressions and unscrupulous business practices are typical factors.
With the NFL's labor deal set to expire in March, the players' union has sharpened focus on financial education while urging members to prepare for a lockout. The league has programs, too, including a financial workshop as part of the annual rookie symposium held in June in Carlsbad, Calif.
"The greatest trap is trying to live up to the expectation of the NFL," says Troy Vincent, the former cornerback and union president who recently became the league's vice president of player development. "The perception has been built up over the years with video games, commercials and the glitz of the NFL. And for so many guys, once they get here, they think, 'I've arrived.'
"Well, the average salary might be $1.9 million, but that's including Peyton Manning, Donovan McNabb and Tom Brady. Most of the players earn a lot less."
Many pitfalls for rookies
As the neophytes learn playbooks, adjust to new cities and try to prove capability at a higher level, Vincent and others warn that money management strategies — transposed over a vague career timeline — should not be underestimated in the transition.
"Playing in the NFL and making a lot of money is like a dream come true," says Carl Carey, agent for Chicago Bears defensive end Julius Peppers, who signed a six-year deal that could be worth $91.5 million in March. "They're probably not wanting to hear about pitfalls, but they should."
Listen to Ken Ruettgers, who played 12 seasons with the Green Bay Packers after being drafted in the first round in 1985 and founded GamesOver.org, which assists retired players. Mindful of post-football hardships, he is wary as new players arrive.
"When I see guys introduced at the draft, I think of all the hands trying to get into his pockets," he says. "There are agents, advisors, fitness gurus, nutritionists, family, friends, neighbors. Anybody trying to sell something. It can be overwhelming."
Johnson knows. After 11 seasons in which he earned more than $50 million, he landed as an ESPN analyst and is invested in ventures including real estate and franchise restaurants. He's also a man who dropped $100,000 for his post-draft bash in 1996 at the House of Blues. Over the years, he has warned young players of how quickly a $1 million bonus check can shrink.
"After Uncle Sam comes first, your agent is going to get his cut," says Johnson. "Then there's your wife, girlfriend or baby's mama. You're going to hook up your family and homeboys, and get yourself some nice things, like jewelry or some sweet tire rims.
"By the time you've done all of that, you'd be lucky to have $320,000 left."
Trent Williams shudders at the thought of squandering assets. A left tackle from Oklahoma drafted fourth overall by the Washington Redskins in April, Williams' first contract will likely have at least $30 million guaranteed.
Like many rookies, Williams pledges to reward his parents. But he maintains he won't go overboard with spending, and will use meticulous caution for major financial moves.
"I can learn from mistakes that other people in this situation made, learn what not to do," Williams says. "Obviously, I don't want to go broke. We'll see."
According to a Sports Illustrated report published last year, 78% of NFL players will become bankrupt, divorced or unemployed within two years of retirement. League and union officials say they can't verify that staggering figure. Yet mindful that many patterns that lead to financial ruin begin early — it's not uncommon for draft picks to accumulate six-figure debt before signing their first contract — they acknowledge concern.
Says Vincent, "If they knew better, they'd do better."
Luther Elliss remembers hearing cautionary statistics at a financial seminar, shortly after being drafted in the first round by the Detroit Lions in 1995. No matter.
"There were a few of us, myself included," Elliss says, "who looked around and said, 'Not me. I'm too smart for that.' "
Now Elliss — who played 10 seasons and earned more than $11 million from 2000-2004 as one of the NFL's highest-paid defensive tackles — is broke.
Elliss and his wife, Rebecca, filed for Chapter 7 bankruptcy last year and in January walked away from their suburban Detroit home. The couple, which adopted six of their 11 children, also foreclosed on a home in Utah.
"It's not always drugs, gambling, the high life or women," Elliss says. "In my case, it was, 'Why did I get involved in these risky businesses?' "
Elliss says he guaranteed money for several ventures, supporting partners he hadn't known for more than a couple of years. When the businesses failed, he absorbed massive losses.
In recent months, Elliss has shared his experiences at the union's financial advisor's conference and as part of a financial education video package for players — hoping that his efforts can help others avoid mishaps.
How pressing is the need for better financial education? Dana Hammonds, the union's director of financial programs, says that in addition to some players entering the league unaware of basics such as a requirement to pay social security taxes, she has witnessed too many cases of misinformed financial moves.
Hammonds says that numerous players, for example, have invested heavily in annuities without realizing funds couldn't be withdrawn without paying surrender fees as high as 50%.
"You get these young guys," Hammonds says, "and they have no idea what they've gotten themselves into."
Although about 450 financial advisors (who passed background checks and are required to attend seminars on a biennial basis) are registered through the union, Elliss says finding a trustworthy advisor is a daunting task for suddenly wealthy players.
"And there's a dichotomy," he added. "They get paid when they invest your money."
During the NFLPA's advisors conference in Hollywood, Fla., in May, Elliss, urged advisors to involve spouses more and suggested they tailor presentations for better financial education.
"I stressed to them that you can't come in a three-piece suit, talking over our heads with all these fancy charts," Elliss said. "We really need someone to be real and come down to our level. Teach us how to fish."
"My advice?" offers Deion Sanders, the former all-pro cornerback, "Find someone to mentor you who doesn't have their hands in your pocket."
Players must balance risk with reward
Then there's the psychology. Several former players point to ego as a factor. In some cases, that is reflected with a reluctance to admit lack of financial acumen when needing to make informed decisions. Other times, it fuels over-confidence that triggers risky choices.
"If your uncle is getting into the restaurant business, you support him," Elliss said. "That's our nature. We're willing to take a risk."
That same mind-set might also leave financially inexperienced players vulnerable to scams. Carey contends that Peppers, drafted No. 2 overall in 2002, was targeted early in his career by an unidentified rap group. A few weeks after Peppers became part of the group's entourage, traveling to concerts and video shoots, Carey says Peppers was approached about entering a financial arrangement.
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