ARBOR WEALTH: Athlete saga: Jim Thorpe, Joe Haden and Ray Charles

Published: Wednesday, July 9, 2014 at 04:45 PM.

“I went to my brother to ask for a loan …’cause I’m busted.” From “Busted” by Harlan Howard and Daniel Ticotin and recorded by Ray Charles

 

There’s a famous story, full of pathos, about Jim Thorpe, the man voted the most outstanding American athlete of the first half of the 20th century. Retired from his professional football and baseball careers, the tale features Thorpe standing in the rain outside a theatre in 1951 without enough money to see the picture.  The movie that was playing? Jim Thorpe: All-American, starring Burt Lancaster. 

Long ago athletes were admittedly not paid lucrative salaries, so a former athlete’s financial fall was not so astonishing nor so steep. But in this era of well-paid performers, the number of professional players who experience bankruptcy is stunning. Why does this keep happening? 

There are a myriad number of reasons, including brief career arcs, poor tax planning, exorbitant personal spending habits and bad investment advice. And when athletes go broke, it’s big news. We seldom read about those who have wisely invested their assets.

I’m not a football enthusiast, but I read recently where former Florida Gator and current NFL star Joe Haden was offered a guaranteed 12 percent return when his investment advisor guided him into purchasing promissory notes from a firm called Success Trade. Turns out the arrangement was a Ponzi scheme, not unlike Alan Stanford’s 10 percent guaranteed CD returns from his Antigua bank.  Success Trade is now barred from FINRA membership for the fraudulent sale of securities and must pay $13.7 million in restitution, mostly to current and former professional athletes.

Truthfully, though, it’s not just athletes who are vulnerable to grandiose investment schemes. Many of Bernie Madoff’s clients were sophisticated investors. The promise of stable, double digit returns was too enticing to bypass. 



1 2
Next

Reader comments posted to this article may be published in our print edition. All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

COMMENTS
▲ Return to Top
 

Local Faves