Why do most boxers go bankrupt?

[Savak]

Mike Tyson made $300-400 m in his career and went bankrupt

Evander Holyfield made $200-300 m in his career and went bank rupt

Riddick Bowe when he retired in 1996-97 had earnings of around $80-100 m

Tommy Morrison retired in 1996 with earnings and savings around $8-10 m but went bankrupt in 1998

David Tua made career earnings of $20-30 m but declared bankruptcy in 2010-11

George Foreman made his entire fortune based of his second career.

The likes of Lennox Lewis, Larry Holmes, Marvin Hagler are examples of boxers who have not only kept their career earnings but multiplied and built on it in style after retirement.

Surely boxers have the ability to hire accountants, financial advisors, the kind of money they make is enough to meet the basic needs of their family like education, food, shelter, health care e.t.c. The money is more than enough to invest in business opportunities in a risk free way.

How do they blow it all away? I mean how can a logical person not know limits on how much to spend vs how they are earning or have in savings?

Or is it just a desire to blow it all away and these guys have no fear of losing it all and starting over?

 

[humzy]

Mike Tyson made $300-400 m in his career and went bankrupt

Evander Holyfield made $200-300 m in his career and went bank rupt

Riddick Bowe when he retired in 1996-97 had earnings of around $80-100 m

Tommy Morrison retired in 1996 with earnings and savings around $8-10 m but went bankrupt in 1998

David Tua made career earnings of $20-30 m but declared bankruptcy in 2010-11

George Foreman made his entire fortune based of his second career.

The likes of Lennox Lewis, Larry Holmes, Marvin Hagler are examples of boxers who have not only kept their career earnings but multiplied and built on it in style after retirement.

Surely boxers have the ability to hire accountants, financial advisors, the kind of money they make is enough to meet the basic needs of their family like education, food, shelter, health care e.t.c. The money is more than enough to invest in business opportunities in a risk free way.

How do they blow it all away? I mean how can a logical person not know limits on how much to spend vs how they are earning or have in savings?

Or is it just a desire to blow it all away and these guys have no fear of losing it all and starting over?

You need to consider the type of person who will more then likely dedicate his life to getting hit and trying to kill someone in the ring and then make this a full time job.

Generalising here but you will likely find that most are from impoverished backgrounds with little education and a high affinity for recklessness and high risk behaviour.

Also we are only beginning to recognise the influence chronic traumatic brain injury has on future behaviour patterns. We understood that cognitive impairment can happen later on in life due to these career choices however only recent studies have began to dig into early behavioural and mood changes.

This is all connected to how a person deals with money because without any prior education, coming from a poor background with no knowledge on how to manage money, plus the influences of brain damage which can make a persons brain wiring turn shoddy therefore results in extremely poor personal choices.

 

[iHammad]

See when you acquire a certain lifestyle, certain spending habits, certain expense levels then you have to understand that all those things are temporary and because of a certain income level as well. If the income level drops then those factors are not sustainable anymore. This is what some celebrities did not and do not understand. And that is why their money goes out of their pockets faster than it comes.

 

[Varun]

As the poster above said, it's not a sport which leads to its personnel having traits of sound financial planning or money management.

 

[Pakistanian]

Brain damage. Look up Chris Benoit.

 

[WhenSultansBowled]

I was listening to a Jamie Foxx ( https://www.youtube.com/watch?v=A_7RmheFRz0 ) interview and he talked about how Mike Tyson partied.

Long story short, if he liked a girl he would buy her "hey do you like BMWs?" if the girl would say yes then Tyson would make his car dealer open their showroom at night buy her the girl. All in space of 2 hours

He'd spend 100ks in party bills etc per night.

 

[Bewal Express]

Because they are thick.

 

[Cpt. Rishwat]

Even given they are not the most intelligent fellows given their profession, it's not always their fault either. Sometimes they will hire financial advisors who will put their self interest above their clients. When you are handling those sums of money with a client who is basically clueless it must be very tempting to set up a deal where you are creaming off a large sum. You hear of celebrities who have been bled dry by advisors, I would imagine boxers would be even easier meat.

 

[finalfantasy7]

Lennox has been part of that delwar project in florida - tax avoidence in florida Andy Murray part of that also.

Boxers generally are born and educated in ghettos with a agent who gone to a top end university - guy with no education mixed in with a load of money, who doesn't understand anything financially and gives full control to the agent.

I know what the agent is doing especially Don King

 

[Gabbar Singh]

Bankruptcy today (for the rich and famous anyway) isn’t what it was in years gone by. Today celebrities go bankrupt one day and the next day are still living in 10 bedroom mansions and driving around in brand new Ferraris and Lamborghinis. Lots of them just go bankrupt to avoid paying debts.

 

[shaz619]

Its not always their fault, many of these fighters have been exploited by their promoters, managers and advisers. Not all of them have benefited from the luxury of a good team behind them and given their rough upbringing they have often not benefited from the best education but in such affairs even someone surrounded by a better environment ought to gain experience and understanding in matters involving finance / law. There's a lot more professionalism and awareness in the modern era though. And at some idiots calling them thick, that's ignorant; Klitchko's have a PHD, Nathan Cleverly has a Maths degree, more recently Truax has a psychology/sociology degree and Floyd Mayweather is one of the world's most successful business men despite his learning disabilities.

 

[shaz619]

Big George is another great example of a successful businessman, he obviously made more from his second career but he made some smart investments from his first career as well which benefited his Grill project.

 

[Savak]

Its not always their fault, many of these fighters have been exploited by their promoters, managers and advisers. Not all of them have benefited from the luxury of a good team behind them and given their rough upbringing they have often not benefited from the best education but in such affairs even someone surrounded by a better environment ought to gain experience and understanding in matters involving finance / law. There's a lot more professionalism and awareness in the modern era though. And at some idiots calling them thick, that's ignorant; Klitchko's have a PHD, Nathan Cleverly has a Maths degree, more recently Truax has a psychology/sociology degree and Floyd Mayweather is one of the world's most successful business men despite his learning disabilities.

When you get used to spending so much money, no amount of money seems enough, curtailing your lifestyle and expenditure can be depressing at times. I was listening to a Tyson interview and he once mentioned that it is a constant struggle for him to make adjustments with the lifestyle he has today, he agreed to give all or most of his money to a trust/accountant who would only release him money above a certain amount if he had a very good/justified reason for it. This is what Tyson needed during the prime of his career, someone who could say no to him and hold him in check and would have protected him for vultures and leeches.

 

[Savak]

Muhammad Ali is another sad example. He should have retired way back in 1975 after his second war with Frazier but kept on fighting to maintain his lifestyle. He also had alimony payments, divorces and kept needing to come back into the ring. After the Leon Spinks 2 fight in 1978, when you watch his post fight interviews you can listen to him talk so eloquently and loudly enough to be heard.

But financial considerations forced him to make a suicidal comeback against Holmes in 1980 and it was that fight which totally destroyed Ali Nuerologically, wrecked his speech patterns and gave him full blown Parkinsons. It was actually criminal how he was medically cleared to fight, even more criminal were his entourage, his then trainer Angelo Dundee who allowed it all to happen.

Ali was essentially broke when he retired in 1981 and was living hand to mouth for so many years. One day in 2003-04, a firm contacted Ali and requested for copyright permission to the right to use his images, videos and they reached a deal of $40-50 million and to pay Ali and his family Royalty money and all of a sudden Ali was a rich man again.

This is where boxers need to be educated, given hope and it is so vital to have the best intentions around them so that they are protected from having to get back into the ring beyond necessity.

 

[troodon]

Gold, Women, Entourage, parties, Cars.

Many Pro Basket ball (NBA) players blew all of their career earnings in trying to show off.

They try to keep it real. Then reality takes over and they end up broke.

 

[Savak]

Let's say if i win $5,000,000 today. I buy myself a decent sized house, 2 cars, furniture for the house, necessities with a few luxury items, all this while having more than enough to utilize my left over in a business venture to let the money work for 5-10 times more. I would obviously keep the news of winning $5,000,000 hidden from family members and friends so i don't have people banging on my door 24/7

How on earth can a boxer not hire or get hold of a highly recommended accountant, financial advisor, consultant who can help him multiply his $40 million into $200 million in the next 5-10 years?

 

[Pakistanian]

Let's say if i win $5,000,000 today. I buy myself a decent sized house, 2 cars, furniture for the house, necessities with a few luxury items, all this while having more than enough to utilize my left over in a business venture to let the money work for 5-10 times more. I would obviously keep the news of winning $5,000,000 hidden from family members and friends so i don't have people banging on my door 24/7

How on earth can a boxer not hire or get hold of a highly recommended accountant, financial advisor, consultant who can help him multiply his $40 million into $200 million in the next 5-10 years?

If you buy a big house the property tax and utility bills and insurance are also a lot higher, so your yearly expenses are still pretty high.

 

[KingKhanWC]

Muhammad Ali is another sad example. He should have retired way back in 1975 after his second war with Frazier but kept on fighting to maintain his lifestyle. He also had alimony payments, divorces and kept needing to come back into the ring. After the Leon Spinks 2 fight in 1978, when you watch his post fight interviews you can listen to him talk so eloquently and loudly enough to be heard.

But financial considerations forced him to make a suicidal comeback against Holmes in 1980 and it was that fight which totally destroyed Ali Nuerologically, wrecked his speech patterns and gave him full blown Parkinsons. It was actually criminal how he was medically cleared to fight, even more criminal were his entourage, his then trainer Angelo Dundee who allowed it all to happen.

Ali was essentially broke when he retired in 1981 and was living hand to mouth for so many years. One day in 2003-04, a firm contacted Ali and requested for copyright permission to the right to use his images, videos and they reached a deal of $40-50 million and to pay Ali and his family Royalty money and all of a sudden Ali was a rich man again.

This is where boxers need to be educated, given hope and it is so vital to have the best intentions around them so that they are protected from having to get back into the ring beyond necessity.

Ali was never really into being rich. Once he asked Don King for $50,000 cash in return for his fight purse/fight contract to which King happily agreed , gave Ali the cash and kept millions for himself.

Why does anyone become broke after making a lot of money? Boxers are just people, some can manage money others cant.

 

[shaz619]

When you get used to spending so much money, no amount of money seems enough, curtailing your lifestyle and expenditure can be depressing at times. I was listening to a Tyson interview and he once mentioned that it is a constant struggle for him to make adjustments with the lifestyle he has today, he agreed to give all or most of his money to a trust/accountant who would only release him money above a certain amount if he had a very good/justified reason for it. This is what Tyson needed during the prime of his career, someone who could say no to him and hold him in check and would have protected him for vultures and leeches.

I agree that's where Cus would come in for Tyson his farther figure, he literally had no one else in his life to provide some guidance and unfortunately for people in his situation they learn what's what the hard way. But he has bounced back now mate and is doing okay. Also Savak this is not as big an issue in modern boxing now, you do get the usual politics and contractual disputes but fighter's are more informed.

 

[shaz619]

Ali was never really into being rich. Once he asked Don King for $50,000 cash in return for his fight purse/fight contract to which King happily agreed , gave Ali the cash and kept millions for himself.

Why does anyone become broke after making a lot of money? Boxers are just people, some can manage money others cant.

That's true, not a fan of AJ but he has been smart with his money long before the big pay day from Wladmir fight. He tends to invest in property quiet a bit. Then you look at one of his opponents Charles Martin, think he has blown his 2-3 million purse already. Like you say some manage well while others not so much, but in both situations guidance is needed.

 

[James]

Usually a lack of education accompanied by rising from below the poverty line. Boxers go from literally not having two pennies to rub together to (overnight) being able to maintain a log fire with $100 notes. They have no concept of money nor do they understand its value.

 

[Rana]

Gold, Women, Entourage, parties, Cars.

Many Pro Basket ball (NBA) players blew all of their career earnings in trying to show off.

They try to keep it real. Then reality takes over and they end up broke.

An Ace of Spades Nabuchadnazzer bottle at top night clubs around the world would not be less than $300k. Only sportsmen are stupid enough to spend that much on alcohol just to show off.

 

[Rana]

The smartest thing any sportsman can do during his career is,

A) Do an open university degree in his spare time

B) Get as many sporting credentials and experiences to build up his cv

c) Invest, make small businesses. Robbie Fowler invested most of his earnings in property. Very clever thing to do.

D) Make a good pr relation with media outlets, keep yourself relevant in sport as a commentator, analyst. If you have a bit more of a personality go into acting etc.