Will I be using this to my advantage? You bet I will.
Here’s my strategy for teaching him a financial lesson: I plan to tell my son about the recent post on TheSportsCommentary.com that said, “While the life of a professional athlete seems like one of overflowing luxury and rock-solid fame, it has been well documented that within five years of retirement, as a result of divorce, unemployment, or bad business decisions 60% of NBA players and 78% of NFL players find themselves on the brink of bankruptcy or flat broke.
Next, I plan to use the strategy suggested by Dr. Robert Lawson, a youth financial wellness expert. He wants us to teach our teens that it’s not how much you make that ultimately determines your financial success in life but rather, what you do with what you make. (As an added bonus, as part of this lesson, I plan to dig up a photo of a destitute athlete standing by the side of the road in his former uniform with a “Will Work For Food” sign.)
Mr. Lawson tells of a professional athlete who had earned over $52 million in his career. However, because of poor investment decisions and real estate deals gone bad, this player was on the verge of filing for bankruptcy.
I’m not sure who Lawson is referring to but there are lots of other examples: Baseball slugger Jack Clark had 18 cars and owed money on 17 when he went broke. Scottie Pippen lost $120 million in career earnings due to poor financial planning and bad business ideas. Former New York Mets and Philadelphia Phillies star Lenny “Nails” Dykstra was a success on the baseball diamond, but in his 2009 bankruptcy filing, he owed more than $30 million to creditors.
As part of my strategy, I will show my son the recent reports about the $7.6 million home LeBron plans to buy and the rumors of a $49 million home, and I will hint that LeBron could become broke some time in the future.
Then, I will follow Lawson’s advice and tell my kid that a person who earns an average salary say of $40,000 a year and invests wisely and develops a good savings habit can wind up with more money in the end than a multi-millionaire NBA star who doesn’t handle his finances wisely.
Lawson offers a few more tips to teach your teen to handle money.
- Cash is king—not credit.
- Learn to set aside a portion of everything you earn. Always pay yourself first.
- When you pay cash for something that means you won’t have to worry about bills and interest payments that come due each month.
- When you miss a payment, it just makes things worse because you get charged additional fees and adds to your debt liability.
- When you put something on a credit card that means you’re going to pay more for it in the long run.
The next time my son heads outside to shoot hoops, I’m ready with my offense. Do you think my strategy will work?