Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

by **bobheckler** Sat Jul 30, 2022 6:08 pm

https://www.insider.com/why-pro-athletes-go-broke

Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Cork Gaines 8 hours ago

Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract 62e52fbb205f7500187a111d?width=1000&format=jpeg&auto=webp

Getty Images

Childress explains that a big mistake players make is overestimating how much they actually get paid.

Josh Childress, a former NBA player who has made more than $60 million in his career after graduating from Stanford, is now playing professionally in Australia.

During an interview with Grit Media, Childress was asked how professional athletes go broke.

Even though he's making less money now than when he played in the NBA, Childress says he has been able to avoid the financial problems that some other athletes have faced.

Childress, who was the sixth pick of the 2004 NBA Draft and signed a four-year rookie contract worth $11.7 million, says the first mistake athletes make is overestimating how much money they have.

"The first mistake is, people say, 'Okay, I've got $11 million,'" Childress said. "You've got five [million dollars after taxes] over four years. So that million-dollar house that you thought you had $11 million, that you had $10 million more, that house then becomes more expensive. Most guys buy their mother a house or a car or something. They buy themselves a car. You've got a 2-to-4% agent fee. You got the NBA escrow. So that check gets eaten up."

Childress says another big factor is the influence of veteran players who make a lot more money.

"Some of my veterans spent a little more than others," Childress explained. "If those are the guys taking you under their wing, that's what you get used to. So that's how you think it has to be, and that's how you think the life is, and you get caught up in that, and you end up spending way more than you should."

Childress says he did fall into a similar pattern in his career but was able to keep his spending in check.

Bob
MY NOTE: Speaking as someone who lives in a town where newly built 2br condos list for $1.25M and usually close for a lot more than asking price, I am thoroughly unsympathetic to the plight of "poor" one-and-done 19 year old 1st round draft picks who are guaranteed a minimum of $10M gross pay (plus per diem that's about $150+ per day for food, and the best healthcare on the planet, and first class charter flights).

.

by **Ktron** Sat Jul 30, 2022 6:49 pm

I dont think its quite that simple. This written piece lacks substance and barely scrapes the surface. Frankly, I’m not sure why it was even published. There’s so much more that could’ve been said here- cause and effect.
Financial literacy escapes a lot of people who “suddenly” find themselves instant millionaires. First class flights, per diem etc. looks entirely different to folks that are not used to having anything. If they come from an environment where that is ingrained in your upbringing they're more than likely not going to find themselves in this predicament-winding up broke.
The ones that are not quite as fortunate end up broke but they don't wind up broke on purpose.
It is my understanding that rookies entering the league are given the opportunity to learn more about finances. That may help some that are a quick study but its not something you attend a class for for a semester and then find yourself financially literate.
It starts when you’re young not 21. Everyone is not that fortunate. Its very concerning.

by **dboss** Sun Jul 31, 2022 12:37 pm

Ktron wrote: I dont think its quite that simple. This written piece lacks substance and barely scrapes the surface. Frankly, I’m not sure why it was even published. There’s so much more that could’ve been said here- cause and effect.
Financial literacy escapes a lot of people who “suddenly” find themselves instant millionaires. First class flights, per diem etc. looks entirely different to folks that are not used to having anything. If they come from an environment where that is ingrained in your upbringing they're more than likely not going to find themselves in this predicament-winding up broke.
The ones that are not quite as fortunate end up broke but they don't wind up broke on purpose.
It is my understanding that rookies entering the league are given the opportunity to learn more about finances. That may help some that are a quick study but its not something you attend a class for for a semester and then find yourself financially literate.
It starts when you’re young not 21. Everyone is not that fortunate. Its very concerning.

ktron, +1

"It starts when you’re young not 21."

How young? Very young. Once a child understands that money is a medium for exchange for things that they want, their parents or guardian should put them on a path to saving money. That is a very basic lesson to learn that gets the process started. Unfortunately not all parents are equipped to do that. Financial illiteracy can become generational.

by **Ktron** Sun Jul 31, 2022 2:41 pm

dboss wrote:
Ktron wrote: I dont think its quite that simple. This written piece lacks substance and barely scrapes the surface. Frankly, I’m not sure why it was even published. There’s so much more that could’ve been said here- cause and effect.
Financial literacy escapes a lot of people who “suddenly” find themselves instant millionaires. First class flights, per diem etc. looks entirely different to folks that are not used to having anything. If they come from an environment where that is ingrained in your upbringing they're more than likely not going to find themselves in this predicament-winding up broke.
The ones that are not quite as fortunate end up broke but they don't wind up broke on purpose.
It is my understanding that rookies entering the league are given the opportunity to learn more about finances. That may help some that are a quick study but its not something you attend a class for for a semester and then find yourself financially literate.
It starts when you’re young not 21. Everyone is not that fortunate. Its very concerning.

ktron, +1

"It starts when you’re young not 21."

How young? Very young. Once a child understands that money is a medium for exchange for things that they want, their parents or guardian should put them on a path to saving money. That is a very basic lesson to learn that gets the process started. Unfortunately not all parents are equipped to do that. Financial illiteracy can become generational.

Dboss, I read where Pat Connaughton is one of the players involved with the rookie transitioning programs financial advisement team. Pat said that he grew up working with his dad in his business and learned real estate at an early age. Grant Williams is another who is involved. Not a coincidence given they’re backgrounds. Connaughton currently has his own real estate firm as well. This is an example of the disparity that exists with players and financial prudence.
They start off learning when they’re very young. It’s a shame that far too many don’t have the luxury and privilege to learn when they’re very young. The transitioning program is a plus but unfortunately it comes s little too late for so many.

by **worcester** Sun Jul 31, 2022 3:51 pm

Satch Sanders for years was central to the NBA's financial mentorship program. He provided a real service.

by **Ktron** Sun Jul 31, 2022 4:56 pm

worcester wrote:Satch Sanders for years was central to the NBA's financial mentorship program. He provided a real service.

Thats right! For years…

by **dboss** Sun Jul 31, 2022 8:17 pm

Ktron wrote:
dboss wrote:
Ktron wrote: I dont think its quite that simple. This written piece lacks substance and barely scrapes the surface. Frankly, I’m not sure why it was even published. There’s so much more that could’ve been said here- cause and effect.
Financial literacy escapes a lot of people who “suddenly” find themselves instant millionaires. First class flights, per diem etc. looks entirely different to folks that are not used to having anything. If they come from an environment where that is ingrained in your upbringing they're more than likely not going to find themselves in this predicament-winding up broke.
The ones that are not quite as fortunate end up broke but they don't wind up broke on purpose.
It is my understanding that rookies entering the league are given the opportunity to learn more about finances. That may help some that are a quick study but its not something you attend a class for for a semester and then find yourself financially literate.
It starts when you’re young not 21. Everyone is not that fortunate. Its very concerning.

ktron, +1

"It starts when you’re young not 21."

How young? Very young. Once a child understands that money is a medium for exchange for things that they want, their parents or guardian should put them on a path to saving money. That is a very basic lesson to learn that gets the process started. Unfortunately not all parents are equipped to do that. Financial illiteracy can become generational.

Dboss, I read where Pat Connaughton is one of the players involved with the rookie transitioning programs financial advisement team. Pat said that he grew up working with his dad in his business and learned real estate at an early age. Grant Williams is another who is involved. Not a coincidence given they’re backgrounds. Connaughton currently has his own real estate firm as well. This is an example of the disparity that exists with players and financial prudence.
They start off learning when they’re very young. It’s a shame that far too many don’t have the luxury and privilege to learn when they’re very young. The transitioning program is a plus but unfortunately it comes s little too late for so many.

Maybe individual teams need to have on going interaction with their players and provide sessions that focuses on how to manage your earnings.

Maybe more should be taught in school as part of the curriculum like all the disciplines.

Cleary some communities are already set up to succeed and others are not.

by **Ktron** Sun Jul 31, 2022 11:11 pm

dboss wrote:
Ktron wrote:
dboss wrote:
Ktron wrote: I dont think its quite that simple. This written piece lacks substance and barely scrapes the surface. Frankly, I’m not sure why it was even published. There’s so much more that could’ve been said here- cause and effect.
Financial literacy escapes a lot of people who “suddenly” find themselves instant millionaires. First class flights, per diem etc. looks entirely different to folks that are not used to having anything. If they come from an environment where that is ingrained in your upbringing they're more than likely not going to find themselves in this predicament-winding up broke.
The ones that are not quite as fortunate end up broke but they don't wind up broke on purpose.
It is my understanding that rookies entering the league are given the opportunity to learn more about finances. That may help some that are a quick study but its not something you attend a class for for a semester and then find yourself financially literate.
It starts when you’re young not 21. Everyone is not that fortunate. Its very concerning.

ktron, +1

"It starts when you’re young not 21."

How young? Very young. Once a child understands that money is a medium for exchange for things that they want, their parents or guardian should put them on a path to saving money. That is a very basic lesson to learn that gets the process started. Unfortunately not all parents are equipped to do that. Financial illiteracy can become generational.

Dboss, I read where Pat Connaughton is one of the players involved with the rookie transitioning programs financial advisement team. Pat said that he grew up working with his dad in his business and learned real estate at an early age. Grant Williams is another who is involved. Not a coincidence given they’re backgrounds. Connaughton currently has his own real estate firm as well. This is an example of the disparity that exists with players and financial prudence.
They start off learning when they’re very young. It’s a shame that far too many don’t have the luxury and privilege to learn when they’re very young. The transitioning program is a plus but unfortunately it comes s little too late for so many.

Maybe individual teams need to have on going interaction with their players and provide sessions that focuses on how to manage your earnings.

Maybe more should be taught in school as part of the curriculum like all the disciplines.

Cleary some communities are already set up to succeed and others are not.

True. Ex: I went to elementary and jr. high school in Roxbury. Never did I learn anything about finance or at least some sort of introduction to it while attending school. Never heard the words, business, savings, finance, Nothing. I learned some from my mother and consider my self fortunate to have been In somewhat of a position to learn. None of my friends were.
I went to high school in Lexington and there they had courses and workshops on the very subject and most of the kids out there were from families that of course had far more than the families in Roxbury.
Suffice it to say, lots of these young players are from backgrounds similar to Roxbury. So they start off so far behind the parade they can’t even hear the band. No wonder.

by **NYCelt** Mon Aug 01, 2022 9:03 am

The education system in all 50 states is failing students miserably when it comes to financial topics. At one time it was taught as part of civics courses, but those were also eliminated decades ago.

School districts in our area used to have me come in for two day session with middle school classes. The kids were eager to learn and many already had gained some experience with help from parents who knew their kids weren’t going to get much from the school. Since the pandemic and a few key retirements in local leadership, even that has now stopped.

To be effective, something probably has to be introduced at the federal level. That would probably be a first, so a long shot at best.

by **bobheckler** Mon Aug 01, 2022 10:09 am

You don't help set your kid up with a lemonade stand at the curb in front of your house just to get rid of them. You do it to teach them about customer service and business, the joy of having your own money and what it takes to make it and keep it.

My father used to say that an expert is someone who knows more and more about less and less until he finally knows everything about nothing (this, coming from a guy with 2 PHDs Rolling Eyes

). Children with basketball skills and who look like they're going to have the physical skills to compete become singly focused on that. It's all about making the McDonalds High School team, going to school for one year and then getting drafted into the NBA because that's all you've ever wanted, dreamed of and worked tirelessly to achieve. And then you find out that the downside of entering the adult world prematurely means that you have to know a shitload of stuff that has nothing to do with your passion and dream. They don't go to classes when they are in school (Jaylen did, but lots of them don't) and the schools let them get away with that because they want/need a successful basketball team because it brings in sponsor money and alumni money which they use to fund other less lucrative sports and academic activities.

This is another reason why I don't like the idea of drafting High School kids or even one-and-doners into the NBA. Life is about more than just basketball and big contracts and names on sneakers and most of those kids are clueless about all the rest of that stuff.

Bob

.

by **Ktron** Mon Aug 01, 2022 5:48 pm

bobheckler wrote:You don't help set your kid up with a lemonade stand at the curb in front of your house just to get rid of them. You do it to teach them about customer service and business, the joy of having your own money and what it takes to make it and keep it.

My father used to say that an expert is someone who knows more and more about less and less until he finally knows everything about nothing (this, coming from a guy with 2 PHDs ). Children with basketball skills and who look like they're going to have the physical skills to compete become singly focused on that. It's all about making the McDonalds High School team, going to school for one year and then getting drafted into the NBA because that's all you've ever wanted, dreamed of and worked tirelessly to achieve. And then you find out that the downside of entering the adult world prematurely means that you have to know a shitload of stuff that has nothing to do with your passion and dream. They don't go to classes when they are in school (Jaylen did, but lots of them don't) and the schools let them get away with that because they want/need a successful basketball team because it brings in sponsor money and alumni money which they use to fund other less lucrative sports and academic activities.

This is another reason why I don't like the idea of drafting High School kids or even one-and-doners into the NBA. Life is about more than just basketball and big contracts and names on sneakers and most of those kids are clueless about all the rest of that stuff.

Bob

.

By the time they make it to school its a little too late. It starts at the lemonade stand and most of them never see one in their neck of the woods.
In my opinion, for many spending more time in school doesn’t necessarily set you up for success anymore than if you went one year to college or never went to college.
The late Kobe Bryant was doing pretty well for himself as is Kevin Garnett, LeBron James. Then you have the late Ray Williams, Dan Issel and Latrell Sprewell none of who went 1 and done or straight out of HS and they have been less than astute when it came to finances.
Financial Education doesn't begin at the HS or College level. It begins when those who are fortunate enough are able to draw up the blueprints to build that lemonade stand.

by Sponsored content

Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract

Re: Ex-NBA player who made $60 million explains what really happens to your money when you sign an 8-figure contract