ESPN tweeted the names of some 60 professional athletes who have filed bankruptcy and asked which names surprised the Twittersphere.
Included were Johnny Unitas, Bernie Kosar, Mike Tyson, Dorothy Hamill, Gaylord Perry of my very favorite baseball team, and Roscoe Tanner, from my very favorite university.
While titillating reading, none of them surprised me.
Bankruptcy is not really about not having too little money; it’s about having debts greater than you can pay.
Highly paid athletes filing bankruptcy is just the individual reflection of big corporate bankruptcies by GM, UAL, Trump Entertainment, and Lehman Brothers declaring bankruptcy.
Lots of cash flow doesn’t insulate one from downturns. Financial advisors, MBA management, agents and managers. None of them insure success.
Part of business is the reality that a substantial number of ventures fail.
More Rich and Famous
A favorite book of bankruptcy lawyers is They Went Broke, featuring familiar names who suffered financial setbacks: Walt Disney, Harry Truman, John Wayne, and Gloria Vanderbilt.
Five years into the Great Recession, my clients follow suit. Financial stress is catching up with Silicon Valley residents with substantial, or formerly substantial, incomes. Investments and risks that weren’t out of proportion before the recession are now unsustainable.
Lots of people were caught up in the real estate bubble. The bigger their income, the more likely they bought the dream of retiring on their real estate investments.
While three years ago, I often filed for those who bought a single rental, mortgaging their home, now I’m seeing couples with a string of investment properties who need bankruptcy relief.
What’s the take away, after you are done imagining what these athletes must have done to overspend their grand incomes?
Money troubles happen everywhere, up and down the income ranks. More bills than income isn’t confined to the poorly paid, the uneducated, the foolish.
The real tragedy is when pride or stubbornness keeps the hurting from getting help.
Image courtesy of jp3sketch.