Let me start out by saying that I never would have thought I would be writing a blog about Jeff Foster. Yes that Jeff Foster. The guy who has somehow managed to play 12 seasons in the NBA while averaging a whopping 4.9 points a game. But here I am writing about Jeff Foster. Why? Because it turns out he is a pretty smart guy.
The other day I came across this article: http://www.businessweek.com/magazine/jeff-foster-the-buffett-of-basketball-10202011.html. It's the story of how Jeff Foster, a below-average NBA player his entire career, wisely invested his money and lives within his means, and therefore, is not sweating out this lockout as much as most NBA players (Hey Moh, I hear the lockout is ending soon!). Foster has made about $47 million so far in his career, so you may be thinking, "he makes millions each year. Why does he have to worry about money?" Well because according to the NBA Players Association, about 60% of former NBA players go broke within five years of retirement. 60%! How amazing is that (although not as bad as the 78% of NFL players that supposedly go broke within two years of retirement). So Jeff Foster is a little different. He does not spend hundreds of thousands to millions on the latest "toys" that most millionaire athletes do. Instead, he invested millions in bonds, equity, real estate, and a few other things and is now financially protected for the future. And it turns out, believe it or not, that Foster can still afford to live in a fancy house, buy a few nice cars, and live a pretty awesome life despite saving millions of dollars. Crazy...
The problem with athletes these days is that a majority of them get their million dollar bonuses and contracts and then go on a continuous shopping spree until they inevitably go broke (Isn't that right Mr. Pippen? Why on earth did you think it was a good idea to buy a jet?!). What athletes really need is a boot camp on finances 101 right upon signing their first contract. Then each one needs to hire a money manager (not a scam artist!) of some sort who will make sure he will still have money when he is 40, 50, 60 and beyond. If only athletes knew how little of each paycheck they could stash away to make millions upon millions of more money...
That's why I find it kind of absurd that NBA players are struggling for cash during this lockout. Sure I get it that they aren't getting their millions these days but if you know there is a potential for a lockout every 5-10 years, don't you think it would have been wise to work that into your planning? Of course it would have. That doesn't mean the majority of them do it.
I give a little bit more respect to Jeff Foster after reading this article. I am sure there are others like Foster, but I know there are tons that aren't. Wouldn't it be wise for the NBA Players' Association to set up a mandatory Finances 101 boot camp for players entering the league? I think so. And maybe the league has something like this, but it's obviously not working.
Try to imagine another company. Say a manufacturing company that built widgets. This company had a few hundred employees and paid very well, which allowed most of its employees to retire at a very early age. However, within 5 years of retirement, 60% of retirees were broke. Don't you think the management of that company would take a step back and question what's going on? I think the NBA Players' Association needs to take a step back and start educating its players to be more like Jeff Foster.
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