Kareem Abdul-Jabbar Shares His Personal Finance Regrets

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Dick Raphael/NBAE via Getty Images circa 1977
Basketball legend Kareem Abdul-Jabbar has a fascinating piece at Esquire.com this week in which he shares some of the advice he wishes he could give to his 30-year-old self. There are a lot of great nuggets of wisdom from the NBA's all-time leading scorer, including an admonition to learn French and to cook more often. What caught our eye, though, were his suggestions that he wished he'd become financially literate at a younger age.

"I chose my financial manager, who I later discovered had no financial training, because a number of other athletes I knew were using him," he recounts. "Consequently, I neglected to investigate his background or what qualified him to be a financial manager. He placed us in some real estate investments that went belly up and I came close to losing some serious coin."
As Abdul-Jabbar acknowledges, his experience is not unusual among athletes. Countless professional athletes have gone bankrupt after making tens of millions of dollars over the course of their careers; baseball star Lenny Dykstra and NFL quarterback Mark Brunell, for instance, were done in by unwise investments.

Why pro athletes seem to have a greater tendency to get taken in by such schemes is unclear. In his Esquire article, Abdul-Jabbar puts forth one theory: Athletes are used to trusting their teammates, so when one of them recommends a financial advisor, they take the recommendation at face value.

Whether you're a basketball star or an average Joe, you obviously want to do more serious vetting before you sign on with a financial advisor. There are lots of things you should know before choosing a money manager -- foremost among them, whether the person you are hiring is a broker (who only makes investments with your explicit approval) or an investment advisor, who may ask you to sign a contract agreeing to let him or her make investments without first consulting you.

One you've decided between a broker and an investment advisor, you'll want to ask your potential money managers some key questions and do a bit of research. For a rundown of what you'll want to know, see our guide to vetting an investment advisor. Then, consider whether he or she has the 10 habits of a good financial advisor.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.


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13 Comments

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clyogi

It is easy to explain why so many athletes lose their money. They have one talent, that is, the sport they have spent their whole life playing. Otherwise, most of them are morons who can barely read. The ones who aren't morons, are bullies with an insatiable appetite for intimidating others. Actually, some are both, morons and bullies. I can give you real life examples of professional ballplayers who fall into these categories, but I am too kind to embarass them.

May 02 2013 at 8:56 PM Report abuse -1 rate up rate down Reply
barryismooslem

Screw Jabber!!

May 02 2013 at 2:11 PM Report abuse -1 rate up rate down Reply
jwallstrom

I have had several financial advisors, some of them fairly costly. All of them lost money. I have done much better reading up and managing things myself.

May 01 2013 at 4:43 PM Report abuse +1 rate up rate down Reply
Cate

If you make 20 million dollars, you don't need to invest it. The thieves of these planners are the ones stealing your money. What can't you buy with 20 million that you feel you need more ? GREED

May 01 2013 at 4:03 PM Report abuse rate up rate down Reply
steinfam

Worthless article with common sense no-brainers.

May 01 2013 at 4:03 PM Report abuse -1 rate up rate down Reply
ferrariqx

I own a financial services firm. I can tell you that every single person has a different idea on how to handle their money. No two people are the same. Further, the vast majority of people are financially ignorant. I don't mean this in a negative way, but few people understand how to prepare for retirement. Most work for a company and socked away money through a 401K but they don't understand or have any knowledge of the investment mechanisms or what the money is invested in.

One problem people face is when they leave their companies, now it's time for them to handle their own funds. Their question or problem is who can they trust? Where should one put their money? Securities? Bonds? Annuities? Banks? Who’s advice is the best? Who’s actively managing their portfolios and whose passively handling their portfolios? Experience certainly is helpful, but can they be trusted too? Sure, you can get referrals. People trusted and referred others to Bernie Madoff and Enron. It’s difficult for even experienced investors. For a young athlete who has never had any money, it’s very, very tough and a difficult road to navigate through.

May 01 2013 at 3:08 PM Report abuse rate up rate down Reply
1 reply to ferrariqx's comment
dfoster

If the public weren't "financially ignorant" they wouldn't hire consultants and financial services firms. Those people are supposed to be the investor's advocate. The public is also pretty "surgically ignorant" and rely on a doctor to take out their appendix, but at least the doctor has some responsibility for the outcome.

May 01 2013 at 4:05 PM Report abuse +2 rate up rate down Reply
1 reply to dfoster's comment
Mike

Nope...these counsultants and financial investors are in it for the money too...the more they make the merrier they become. They don't give a rat's ass how a portfolio is doing for the most part, unless it is making THEM a lot of money,,,not the ivestors.

May 01 2013 at 8:21 PM Report abuse rate up rate down
joed523joseph

I wonder how Lew Al Cinder is doing financially.

May 01 2013 at 2:53 PM Report abuse -1 rate up rate down Reply
malachi31619

LIFE IS HARD BUT IS HARDER IF YOU ARE STUPID

May 01 2013 at 2:36 PM Report abuse rate up rate down Reply
socioeconomist1

Here is a novel idea.... just save your money and live in a moderately priced home like Roger Staubach did... and guess what, he turned his mediocre 1970's NFL money into a bigger fortune than he ever made playng football.... Sometimes doing nothing is the most productive thing you can do. Especially when it comes to a windfall of cash... Warren Buffett is one of the greatest financial minds on the planet and his home only cost him $80,000... go figure

May 01 2013 at 1:55 PM Report abuse +2 rate up rate down Reply
1 reply to socioeconomist1's comment
Mike

The thing about pro athletes is that they think they are so awesome that their careers will last all theirl lives, and that endorsement deals will roll in until they go to the grave. How sad to be so stupid and delusional....

May 01 2013 at 8:23 PM Report abuse rate up rate down Reply
Joey

This is an extremely important subject for young professional athletes. Too many of them think only of 'getting stuff' they've always wanted - like $200,000 cars and houses with ten bedrooms, pools, gyms, media rooms, etc. While all of that is great, what they don't seem to consider is the fact that their careers are short and when it does come to an end, they still have the expense of maintaining this stuff and their income decreases dramatically.

May 01 2013 at 10:55 AM Report abuse rate up rate down Reply