It’s a tale as old as time—an athlete rises from nothing, gets handed a life-changing payday, lives large for a few years, and then ends up flat broke. This part of history keeps repeating – from Mike Tyson to Allen Iverson and plenty more in between.
Despite the millions they earn, the money seems to vanish almost as fast as it comes in. And according to Joe Rogan, there’s a clear reason behind it. On an episode of his podcast, Rogan shared his take on why fame and fortune so often lead to financial ruin.
Unfortunately for the many talented young individuals in their respective sports, there is no handbook on how to handle the fame, success, and money that comes their way.
Combat sports especially are ones where people from underprivileged backgrounds are more likely to take part. But without the social capital needed to understand how to manage finances, they suffer.
While discussing the same with Kyle Dunnigan, Rogan said, “An athlete makes a ton of money for a very short amount of time. That is why they all go broke. Well, not all of them but a large amount of them go bankrupt.”
These athletes were all thrust into the spotlight in their early twenties and awarded sums of money that far exceeded their wildest expectations. Therefore, Lamborghinis, Ferraris, and even Tigers are on the list as the shopping sprees become wilder and more expensive.
Another aspect of a career in sports that most continue to ignore is that careers last only about a decade, and that is if they are at the very top of their sport. And only a handful of athletes like Shaquille O’Neal or Shannon Sharpe are good enough to build a career in punditry or even beyond that.
After the end of an active career, athletes get wiped out from public memory. So unless they have created something iconic like Michael Jordan did with Nike, the endorsements dry out rather quickly.
Of course, with managers, media managers, and financial guides working overtime, athletes in the last 10 odd years have fared better, with the right investments and post-active careers.
Tyson, the former heavyweight boxing champion, who amassed approximately $400 million, had declared bankruptcy in 2003. He has since managed to find his footing with investment in the cannabis business, regular appearances on TV, and endorsements through podcasts. He is also said to have $20 million for a farcical fight with Jake Paul last year.
Similarly, NBA star Allen Iverson earned over $150 million in salary and endorsements, yet faced financial ruin, reportedly spending $360,000 monthly on various luxuries.
Baseball’s Lenny Dykstra also filed for bankruptcy in 2009 after a series of poor investments and legal issues. And unlike Tyson, most athletes simply never recover.
