Having money and keeping it are two very different things

We have all heard the stories of people who have won the lottery, and then become bankrupt just a few years later. It seems the same thing is happening to professional athletes.

According to Root.com, such is the case with former heavyweight boxing champion Evander Holyfield. Holyfield, who was once retired, is still fighting. Many boxing commentators say Holyfield is well past his prime. So, why is he still fighting? Because he has to.

Holyfield was reportedly $9,000 behind on child support payments, and his 54,000 square foot home is set to be auctioned to settle a $10 million loan. Holyfield was quoted as saying that he's not broke, he's just not "liquid".

Players in the NFL and the NBA also become broke within a few years of retiring from their sports. When players reach these levels, they feel they have hit the sports equivilent of the lottery. In fact, the average length of an NFL playing career is just 3 1/2 years.

With players earning millions of dollars, how could they possibly be going broke? Well, making a lot of money, and keeping it, are two very different things. Professional athletes get themselves in financial trouble in the following ways:

1. They spend money as if there is no tomorrow. Actually, there IS a tomorrow. An athlete can be injured, cutting their career short, and that can happen at any time. Athletes also must retire at an earlier age than the rest of us because their jobs are so much harder on their bodies.

2. They live beyond their means. Evander Holyfield amassed a fortune of $200 million over his career, and he STILL managed to live beyond his means. Does he really need a 54-thousand square foot home? He certainly earned it, but he also spent too much money over his boxing career. No matter how much money a person makes, they still need to live within their means, even if they are multi-millionaires.

3. They support many other people. Athletes don't just earn money for themselves. They have teams of people whose salaries they pay, including agents, trainers, publicity people, etc. Eventually, these people want to live a lavish lifestyle, too...and some athletes feel obligated to give it to them. Their first obligation should be to secure their own financial future.

4. They don't plan for the future. Many young athletes don't plan for what they will do when they are done playing their sport. They feel the money will always be there. To their credit, organizations like the NFL provide financial planning programs for their athletes, to help them manage their money and plan for what they will do when their playing days are over.

Athletes such as Magic Johnson and George Foreman have played it smart. They capitalized on their sports fame, became smart businessmen and have earned more money outside of sports than they ever did in basketball or boxing. Magic Johnson has become a real estate developer and opened a chain of movie theaters. He sought a mentor who could teach him to become a successful businessman. George Foreman became a pitch man for car mufflers and food grills, and earned hundreds of millions of dollars.

We can all take a lesson from the hard-luck pro athletes. No matter how great your fortunes appear, there is no substitute for smart planning and watching the bottom line.