1. Look at the Numbers

• 60% of entertainers and athletes are in financial distress two to five years after leaving the spotlight or retiring.

• There are countless numbers of entertainers that have stepped out of the limelight or athletes that have retired that are in financial ruin and there is undoubtedly a systemic problem that needs to be addressed.

 

2. The Faulty Mentality

• At the root of many of these financial issues is a self-imposed “lifestyle” that sucks many entertainers and athletes up like a vacuum. The lifestyle that I am mentioning is maintaining the appearance of being rich (no, I didn’t say wealthy) and keeping up the Joneses. This mentality tends to lend itself to reckless spending, like buying an extravagant house will all the trimmings, the latest sports car, expensive jewelry, and all the other luxury trappings. Not to mention the luxury vacations, expensive dinners, casinos, expensive parties; and let’s not forget the added expenses of bringing the entourage along for the ride. In addition to the wild spending habits, there are also the ill-advised investments, as well as mismanagement of funds and fraud perpetrated by business advisors.

• Many who are living the lifestyle never experience any type of financial rude awakening during their careers and they continue to feed the lifestyle with their lucrative contracts and signing bonuses. You see, everything seems just fine and dandy, but this lifestyle is unsustainable over the long-term, and it eventually catches up with them after they have left the entertainment limelight or retired from sports.

• There are others who unexpectedly have their careers cut short because of injury or being waived, and suddenly fall off a precipice into financial ruin. The income stream is no longer flowing and the savings is all tapped out, and the bills are continuing to pile up as a painful reminder of the lifestyle they use to have.

• The lack of financial discipline and the calamity that often results are symptoms of a lack of financial education and management.

• Problematic financial practices can all be combated by proper and timely education as long as the elite client is willing to learn and adopt the right mentality and habits, and has the necessary support framework in place.

 

3. Can This Ugly Trend be Reversed?

• Many people feel that trying to educate entertainers and athletes is a hopeless task. I have heard this from personal friends and colleagues in the entertainment and sports industries. I disagree! Many executives don’t have faith in entertainers and athletes. They insult their intelligence as a whole and see financial workshops and transition programs as “useless” because they feel that the average entertainer or athlete can’t comprehend what they are being taught. While some advisors are enablers and perpetuate the vicious cycle of entertainers and athletes going broke, it would be unfair to even suggest advisors should shoulder the blame. The clients are equally at fault in many cases because they simply refuse to listen to advice given.

• The only way to help a person from being his/her own worst enemy is to educate them from all angles. In my opinion, it comes down to a system that lacks the proper institutional support mechanisms and educational tools to guide entertainers and pro athletes in the right direction and keep them from squandering their newfound riches.

• To break the status quo and reverse the ugly trends we have grown so accustomed to reading and hearing about in the media, the entertainer or pro athlete would need ongoing education. Outside of the agent and financial manager, the main vehicle by which this can be remedied is through artist and player development programs.

• The best chance at reversing this disastrous trend is to first educate entertainers and pro athletes why change is needed, then empower them with the knowledge needed to effect the desired change, and then finally guide them and give them the necessary resources to reinforce the newly-learned behaviors so that they can be sustained for the long term.