NFL All-Pro turned Goldman Sachs exec explains how easily athletes can go broke after making millions

75756A5E-120A-4932-810C-2FD980DB785E
By , RADIO.COM

I'll never forget the bewilderment that I experienced as a 15-year-old Sixers fan when I heard that Allen Iverson, the face of the franchise and one of the biggest stars in the NBA for years, was reportedly out of money. Of course, Iverson's career and post-playing days aren't great to use as an example of the typical athlete, but it still begs the question: how do athletes completely motor through all of the millions of dollars that they earn throughout their career?

The fact of the matter is that financial literacy is an issue across all sports, given that a solid amount of star athletes came from not-so-wealthy backgrounds and wound up receiving huge loads of money for the first time in their lives as teenagers or young 20-somethings. Financial literacy was a topic that rose to the forefront when sports were temporarily suspended due to coronavirus, with Blazers star CJ McCollum stressing the fact that some players were living "paycheck-to-paycheck" and needed to start thinking long-term. There are figures like former first overall pick Greg Oden, whose jobs are to provide financial advice to young athletes in order to prevent these exact problems.

If only everyone could have had the same know-how and wariness as Justin Tuck, the two-time Pro Bowl and two-time Super Bowl champion that played defensive end for the New York Giants and Oakland Raiders for over a decade. He doesn't have to worry too much about money now, considering he's a vice president at Goldman Sachs, a position he assumed in the summer of 2018. But he realizes just how easily he could have been in the situation that many other athletes have faced, using his 11-year career and approximate $50 million in playing career earnings as an example.

"Let's just say you paid taxes and you're paying 50 percent, so that $50 (million) is $25 (million)," Tuck explained on the "Boardroom: Out of Office" podcast from Cadence13, available on RADIO.COM. "Then, you wanna talk about agency fees, and that's custom... I'd just say, I don't know, let's say 3 percent. So now you're dealing with, round number, $23 million."

Then, there's the house — "let's just be honest, most athletes want the biggest, baddest house on the block" — which Tuck said could easily run around $5 million. Now you're down to $18 million total. Then there's insurance, there's upkeep of the house, there's helping family members out and a whole lot more that wouldn't fit under the label of typical spending. And that's also the part that Tuck considers the most important to be cognizant of.

"...You got daily spending, and that's the biggest thing that I feel with athletes, entertainers," Tuck said. "It's just understanding your spending habits, but I've seen guys spend a million dollars a year... I'm not saying investing, I'm saying just spending, you know, and it can be more than that."

$1 million per year for an 11-year career and you're looking at — watch my math, here — $11 million. Subtract that from the $18 million left, already fairly depleted from the initial $50 million that's on your Spotrac profile and you're left with $7 million at the end of your career without a second form of income.

"So you can imagine that $50 million is dwindled down to $7 million without really even having talked about anything," Tuck said. "And people don't understand, most guys don't go broke while they in the league, they go broke within that next five years. So in this situation, we got a guy who's played 11 years, made 50 million bucks. He's walking away from the game with 7 million.

"...Now you think about the lifestyle that they've lived... we ain't talked about private planes and flights and all that stuff, we ain't talked about jewelry, none of that... They hadn't planned for the NFL meaning 'Not For Long,' so they're not bringing in any more money now. So now it's just a direct spin and you can see how everything is trending south. And like the hardest thing for them to do is to stop buying jewelry, stop going out and taking their buddies out on trips and taking a posse of 15-20 people out to restaurants and so on and so forth.

"...And honestly 50 million bucks is a nice career. Think about the guys who made 20 (million) and how that narrative continues to dwindle down."

For Tuck, his humble upbringing in small-town Alabama helped him to avoid the temptations of an expensive life that could eventually derail his earnings, though he always thought differently to begin with.

"Everyone thought I bought different cars. I didn't," Tuck explained. "I went to dealerships and said, listen, I like this Cadillac Escalade. If I do this signing — this whatever — for you, can I drive off the lot with this thing for free? So I had dealerships that would send me cars for free and I would do things in return to add value to that dealership, but I didn't spend a lot of money on cars.

"I've never worn jewelry as you can see. Everyone ask me what time it is, and I love watches, but... people literally with a $100,000 watch at home would go right to their iPhone."

It's a valuable lesson for athletes — and people in general — to be conscious of. After all, if I went from high school to making more than six figures per year, I'd probably have the temptation to spend a little bit as well. But spending a little bit could spell the difference between a successful career and long, content life ahead and one that crashes just as quickly as it began.

LISTEN NOW on the RADIO.COM App
Follow RADIO.COM Sports
Twitter | Facebook I Instagram