How To Win The Money Game: A Former NBA Star Shares Financial Advice

Transcript

ARUN RATH, HOST:

Generating sympathy for professional athletes isn't easy. But consider this. A lot of these guys are raised without much money, some in abject poverty. Then, all of a sudden, they're given paychecks that lift them into the top tier of earners. This isn't just life-changing money. It could change generations of lives. But according to Sports Illustrated, more than half of all NBA players are broke within five years of retirement. It's worse in the NFL. Almost 80 percent are broke within two years. Most of these guys come into pro sports totally unequipped to handle their own windfalls. My next guest is trying to help. Adonal Foyle played in the NBA for 13 years, mostly with the NBA champion Golden State Warriors. Congratulations on that.

ADONAL FOYLE: (Laughter) Thank you very much.

RATH: He's written a new book called "Winning The Money Game." Adonal Foyle, welcome to the program.

FOYLE: Thank you for having me.

RATH: So talk us through the mindset of a kid leaving school and entering a league like the NBA. I mean, that - I can't get my head around that kind of a drastic change.

FOYLE: So part of - when I got my masters in sport psychology, my thesis was on retirement experiences of NBA players. And I went out and spoke to about 10 to 12 different players, and I talked to them about their transition. And one of the things we talked about was if you were to do it over again, you know, what are some of the things would you do differently? And almost all of them talk about, you know, financial literacy and financial education.

And one guy said, you know, I saw my parents. They didn't have any money. I grew up poor, and then I was given all this money. And I had no idea what to do with it, and I was so silly, I didn't ask questions because I was afraid that people would think that I wasn't smart. And I think that that is indicative of many of the players is that many of them come from backgrounds where they haven't been exposed to a lot of financial literacy or financial education, and then they get to this level. And there is so many people around them, and they want different things from them. And I think players continue to make really bad decisions in part because they're afraid to ask question and in part because people just take advantage of them.

RATH: The NBA provides players with things like medical advice, nutritional advice. What about financial advice?

FOYLE: Both the NBA and the union do some education around this issue, but I contend that by the time a player gets to the league, that they have to at least be exposed to some level of financial training. And I think it really falls on colleges, high school, and it falls on parents. The NBA and the union can do a lot, but by the time a player get to that level, I think it's a little late.

RATH: You know, I think there's this popular perception that athletes are blowing their money on things like, you know, cars or luxury items. How are they really draining these huge bank accounts though? Where does the money go?

FOYLE: Well, I think it's a combination of a lot of things. One is how they choose to have - bring children into the world. A second is luxury items - houses that sometime they cannot afford or not really taken into consideration how many they're buying. So they're buying houses for the family, which is admirable, but they haven't really set aside money to pay for the taxes and all the different amenities that you're going to need in that house. They spend it on jewelry, clothing and numerous stuff.

But it's also about taxes. I think one of the biggest issue that I've seen is that as a professional athlete, you have to pay taxes in almost every state that you play in. And players are really ill-equipped. So if you don't have a really good financial consultant or a CPA very early, you can get yourself in a really big hole where it's very hard to get out of. And the average career for an NBA player is 4.7 years, so it's very important that you get them early and that they start making really good decision right off the bat, right in the first year in the league.

RATH: Now, you don't seem to suffer from this mindset. You write in this book about how when you got your very first NBA contract, you thought immediately, treat this like my last contract, plan my financial life accordingly. Where did you get your smarts from in that?

FOYLE: I don't know if I - if it necessarily was smarts. I grew up on an island with a donkey. So I usually tell people is that the need for cars doesn't seem to be one of those desire that is burning within me (laughter). And I've always tried to be really simple. I never let money be the determinant of how I see my future. I remember leaving almost $19 million on the table to go to another team because I thought playing was more important to me than money that I didn't make. And I remember people were absolutely outraged by that. And I said, you know, I didn't earn it. And part of what I've learned very early in my career - it's not what you make; It's really what you keep and really the respect that you show for money.

I remember my - you know, growing up poor in the Caribbean, and my grandmother - and never really had anything to eat, it seems like, every day. And somehow, during the course of the day, she would find a way to put food on the table. And for me, that has had such a profound effect on my worldview and how I see the world, that money cannot be the determinant of who you are. You really have to put money in its proper place. And I think if we do that, then we'll respect it but not give it too much power over us.

RATH: After your playing career, you served as the director of player development for the Orlando Magic. Could you tell if any of your messages were getting through to the young men you were working with?

FOYLE: You know, I did. I remember the three guys that I took out and really gave them my first angry financial lesson. And I remember I was out of the league, and I was in another city. One of the players was traded, and I was in another arena. And one of them, you known, ran up to me, and he says, thank you so much; you've changed my life; I'm going to be richer than you.

RATH: (Laughter).

FOYLE: And I said, thank you, thank you for at least acknowledging that there - that you can get this done. And I think that did more for me than any amount of many that he could've given me because he took the knowledge that I was able to pass on. And I remember saying to him, now you need to pass it on to the next person. We need to really change the cycle. And I hope that, you know, he goes out and do that because I think that's how that conversation gets thought. It is that we have to share our mistakes and really help lift the next person up.

RATH: Adonal Foyle played in the NBA for 13 years. His new book is a guide to long-term financial security for his fellow athletes, and it's kind of universal advice, really. It's called "Winning The Money Game." Adonal Foyle, thanks very much - pleasure speaking with you.

FOYLE: Thank you for having me. The pleasure's mine. Transcript provided by NPR, Copyright NPR.