We post stories about athletes and their financial problems as a warning to everyone that capital preservation is the first thing you should be thinking about when you are investing. You want a return on your investments, but you need to avoid risking all of your savings.
Pro athletes often make a ton of money. With most of it, they should be focused on ultra-safe investments that give them a decent return. They should not be risking it in new businesses. Same goes for anyone else who makes a lot of money.
Mark Brunell made a ton of mistakes:
Action News Jacksonville reports the current Jets backup and former Jaguars hero has managed to run through $50 million as an active player and will have to start a 9-to-5 job as soon as his NFL career is over.
And that will be soon. Brunell plans to retire from the Jets after this season and, because of his financial misfortunes, will have to become a regular working stiff. Bankruptcy filings show Brunell has a job lined up to work as a medical sales representative after he’s done holding a clipboard in New York.
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Brunell, 40, blew all his money with lousy investments into nine businesses — more than half of which are already closed. His most ponderous financial disaster was in Champion LLC, a company that invested in high-end real estate properties. That may have worked out great had the housing market not soured over the course of Brunell’s NFL career. He also invested in a Whataburger fast-food franchise, and ended up losing every penny he invested and even more according to financial documents. Brunell attempted to cover the loans with his own cash.If that’s not harsh enough, the three-time Pro Bowl quarterback is facing six lawsuits. Brunell is on the hook for a whopping $24.7 million, according to the litigation.
Don’t make the same mistakes. Even on a smaller scale, you need to make sure you protect what you have already earned. Work with a financial planner to construct a balanced portfolio of investments. Diversification helps to mitigate financial risk.
