Super Problems

Is it worth it?

That’s what I wondered when I read that Vince Young, former college football star and NFL Rookie-of-the-Year in 2006, had filed for bankruptcy. In his heydey, VY made over $50 million per year as a quarterback for the Tennessee Titans. He played in the Pro Bowl two times. And yet a massive salary and endorsement deals weren’t enough.

Young is just an extreme case, but the average NFL career lasts just over three years and results in career earnings of about $4 million after taxes. Invested in a diversified, liquid portfolio, such a nest-egg could produce a sustained, growing income of only $100 to $150 thousand per year.

Most of us would find it such an annuity fairly comfortable. But these athletes receive all this money when they feel invincible but are actually quite vulnerable. If they don’t spend it on a lavish, consumptive lifestyle, they invest in illiquid, concentrated ventures, like a restaurant or real-estate business—fields that are highly competitive and frequently fail. In addition, they often finish their football careers with serious injuries that make it difficult to work in a new career and leave them with big medical bills.

People are social creatures. We tend to behave the way our friends do. When the culture is imprudent, it’s hard to be careful with our money.

Douglas R. Tengdin, CFA

Chief Investment Officer

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