Even our NFL "heroes" need to budget, conserve, invest wisely and diversify

The Sad Financial Future That Awaits Many NFL Players

For our research published last year in the American Economic Review, we collected data on more than 2,000 players—all of those who were drafted by the NFL from 1996 to 2003—and followed them until 2013. We were interested in seeing how well football players do, financially, after they leave the game. Because it is very hard to find out how much they earned and spent after they retire, we looked at a simple measure of financial distress that is publicly available: bankruptcy filings. And we found that things did not go well at all. Football players, even those with short careers, usually earn more than what most college-educated workers earn during a lifetime. Because NFL careers are so short, the players’ post-NFL retirements can be long. Many get other jobs, but only a tiny percentage end up with coveted high-salary jobs such as sportscasting. After 12 years in post-NFL retirement, more than 15% of the players we followed had declared bankruptcy. We also found that bankruptcy does not depend on how much an NFL player earned in his career or how long he plays. Amazingly, higher income or longer careers seem to offer little protection against bankruptcy. These findings have been documented, with some variation, by other sources. There are numerous news stories and interviews describing instances where players have lost all the money they earned. Unfortunately, we continue to witness this phenomenon each year.
1 in 6 NFL players go bankrupt

Studies have shown that a high percentage of NFL players declare bankruptcy after their playing days, and many others suffer financial difficulties. A Sports Illustrated (SI) article from 2009 indicated that after two years of retirement, a whopping 78 percent of former NFL players went bankrupt or suffered financial stress due to joblessness or divorce -- although in fairness, that analysis falls into the heart of the Great Recession. A recently released study by the National Bureau of Economic Research (NBER) focused on the bankruptcy aspect. The NBER working paper studied NFL players who had been drafted between 1996 and 2003. The authors found that bankruptcy filings began relatively soon after retirement and continued all the way through the first dozen post-retirement years. Taken in total, almost 16 percent of the players studied declared bankruptcy during the first twelve years of retirement. The bankruptcies did not correlate with the amount of money made over a career or the length of time in the league. Keep in mind that there are plenty of undrafted players who spend some time in the NFL (just over 31 percent in 2013 according to the Elias Sports Bureau) and most make nowhere near the money that drafted players do. Adding those players could skew the statistics either way -- the undrafted players made less money to save, yet the undrafted player may have a greater sense of how short the NFL experience can be and may be more likely to engage in financial planning. Financial planning, or more precisely the lack of it, is the main point. While the NFL Players Association (NFLPA) started a financial wellness program around the time of the SI article, too many players either do not take the advice or do not fully understand it. It is hard for an NFL athlete to fully grasp the fact that his career is short-lived and that he must plan for the future. The NBER paper points out that NFL players do not follow the "life-cycle model" of savings. In this model, people try to balance their consumption over their lifetime and save for the future, instead of simply consuming more in proportion with their current income. One could argue that most Americans do not follow that model either -- but most Americans do not get annual contracts averaging millions of dollars, especially knowing in advance that the income is short-term
Why NFL Players Are So Likely to Declare Bankruptcy

In the opening anecdote of the Sports Illustrated story, Raghib (Rocket) Ismail, the Notre Dame superstar who played in the CFL and NFL and earned as much as $4.5 million per year, recalled how impervious he was to financial advice early on in his career. “I once had a meeting with J.P. Morgan,” he said, “and it was literally like listening to Charlie Brown’s teacher.” They get bad advice and make bad decisions. Ismail blew money on a wide range of sketchy investments, including a religious movie, a music label, and various high-risk restaurant and retail endeavors. Many players have sued their advisors after allegedly being scammed out of millions. In one suit filed in 2013, a group of 16 former and current NFL players claimed they were collectively bilked for more than $50 million based on the actions of an advisor who had allegedly invested the money in an illegal casino. “Regulated or not, shady advisors have made quite a mark on the NFL financial scene,” the authors of the 2014 book Is There Life After Football? Surviving the NFL wrote. “Before closer scrutiny was instituted, at least 78 players lost more than $42 million between 1999 and 2002 because they trusted money to agents and financial advisors with questionable backgrounds.” More recently, seven-time Pro Bowler Dwight Freeney sued Bank of America for $20 million, because a former adviser from the bank supposedly defrauded him by (illegally) wiring millions of dollars out of Freeney’s account. In another recent case, it is a former NFL player who is himself being accused of operating a sketchy investing scheme. In early April, the SEC filed a federal fraud complaint against former NFL player Will Allen and a business associate, who together allegedly ran a Ponzi scheme, using money from some investors to pay off others. The operation was supposed to be loaning money to athletes who were short of cash, but the suit claims roughly $7 million raised from investors was used instead for personal expenses of Allen and his associate. They get used to a certain lifestyle. Warren Sapp reportedly had 240 pairs of collectible sneakers, including 213 sets of Air Jordans, which wound up selling for more than $6,000 at auction. Former standout wide receiver Andre Rison famously blew $1 million on jewelry and routinely walked around clubs with tens of thousands of dollars in cash in his pockets, he recalled in the “Broke” documentary. Troubled cornerback Adam “Pacman” Jones has said that he once dropped $1 million in a single weekend in Las Vegas. Extravagant spending is ingrained in NFL culture, insiders say. “Around the locker room, players’ cars, clothes, houses and ‘bling’ are constantly scrutinized. If they’re not up to par, they’re ridiculed,” former Green Bay Packers’ George E. Koonce, Jr. and his fellow authors explained in Is There Life After Football? “Players don’t see their bills or keep track of their payments. They’re in the dark about taxes. They lose touch with their own money.” Once they retire and the millions stop flowing into their bank accounts, many players find it impossible to dramatically shift gears and adapt to life on a limited fixed income. It’s all the more difficult because they’re still relatively young and aren’t anywhere near ready to embrace the sensible, low-key, downsized lifestyle of the typical 70-year-old retiree.
How Dan Marino, Vince Young and Other Broke NFL Players Lost Their Fortunes

Dan Marino, a former quarterback for the Miami Dolphins with a decorated NFL career, recently suffered a major financial setback after losing big in a major investment. The nine-time pro bowler and analyst with CBS’ “The NFL Today,” has accumulated millions over his career, but he lost a major portion of that money in one investment in a company called Digital Domain from which he purchased 1,575,525 shares. The company is popular for producing the famous hologram of dead rapper Tupac Shakur at the Coachella Music and Art Festival. However, the company soon after filed for bankruptcy, taking Marino’s stock with it. According to reports, the 51-year-old Marino’s investment might have resulted in a loss of $14 million.
There’s A Difference Between Broke And Bankrupt For Ex-NFL Players

What the NFL did instead was eventually market its own study, published months after my SI article in 2009, with findings that were more pessimistic than the NBER working paper’s but more optimistic than the ones in my article. The league supplied University of Michigan researchers with an even more rarified sample of players: pension-eligible retirees, meaning those who had played a minimum of three years. The average career length among those interviewed was 7.3 seasons, far longer than the NFL average.4 “We had no way to include players with shorter careers,” one of the Michigan authors, David Weir, wrote to me in 2012, “and I would certainly agree that they would be an interesting group to know more about.” That same year, I received an email from an NFL PR person with the following results for me to chew on: “45% (age 50+) and 48% (age 30-49) of retired players said that they have at some point ‘experienced significant losses in business or financial investments.’” None of this was a direct comparison to the number cited in my article, not even close. But said PR person nevertheless included his own note, colored in bright red font: “a far cry from 78 percent.” The NFL has already convinced thousands of men to devote themselves to the pursuit of a lifestyle that is unsustainable at best and fictional at worst. Some of the enablers of this dream include, but are not limited to: the league’s financial literacy programs, which have historically failed to instill basic principles; the NFL Players Association’s certification program for financial advisers, which supposedly vetted a number of moneymen who reportedly allowed players to lose more than $300 million in recent years; and the players themselves, who are pressured to exaggerate the opulence of their existence.
16% of retired NFL players go bankrupt, a report says

... the 15.7% figure should not lead anyone to conclude that the other 84% of NFL alums are all raking in the money and living high on the hog—many more than 15.7% struggle financially after leaving the sport, and many may go broke or get close to it. But this paper strictly measures bankruptcy filings.
Ex-NFL RB Clinton Portis files for bankruptcy amid $5M debt

Former Denver Broncos and Washington Redskins running back Clinton Portis filed for bankruptcy last week, saying he has debts of more than $5 million that he can’t afford to pay. Portis, who earned more than $43 million over his nine-year career, listed his creditors on his bankruptcy filing. He owes the MGM Grand Hotel in Las Vegas $287,178.56, and the IRS accused him of failing to pay $401,432.18 in federal income taxes in 2006, and $57,187.61 in federal income taxes in 2010. Portis also owes $500,000 to his mother, $500,000 to “Entertainment Tonight” correspondent and former NFL sideline reporter Nischelle Turner and $412,000 in “domestic support obligations” to four different women, according to reports. Portis is one of a dozen former pro athletes and stars who invested in a now-defunct Alabama casino. Others include world champion boxer Floyd Mayweather, actor Jamie Foxx and ex-NFL wide receiver Terrell Owens.
Comments: I'm a fan, but don't regard them as heroes. For heroes see Hebrews 11! Image is screen grab from final article.


Faithful Sayings

This is a faithful saying and worthy of all acceptance, that Christ Jesus came into the world to save sinners, of whom I am chief. (I Timothy 1:15)

This is a faithful saying: If a man desires the position of a bishop, he desires a good work. (I Timothy 3:1)

This is a faithful saying and worthy of all acceptance. For to this end we both labor and suffer reproach, because we trust in the living God, who is the Savior of all men, especially of those who believe. (I Timothy 4:9-10)

This is a faithful saying: For if we died with Him, We shall also live with Him. If we endure, We shall also reign with Him. If we deny Him, He also will deny us. (II Timothy 2:11-12)

This is a faithful saying, and these things I want you to affirm constantly, that those who have believed in God should be careful to maintain good works. These things are good and profitable to men. (Titus 3:8)

Comment: Good memory verses


The art of the con - lessons from the Cazique, or prince, of the land of Poyais

The conman who pulled off history’s most audacious scam


Con artists have long recognised that persuasion must appeal to two very particular aspects of human motivation – the drive that will get people to do something, and the inertia that prevents them from wanting to do it. In 2003, two social psychologists, Eric Knowles at the University of Arkansas and Jay Linn at Widener University, formalised this idea by naming two types of persuasive tactics.

The first, alpha, was far more frequent: increasing the appeal of something. The second, omega, decreased the resistance surrounding something. In the one, you do what you can to make your proposition, whatever it may be, more attractive. You rev up the backstory – why this is such a wonderful opportunity, why you are the perfect person to do it, how much everyone will gain, and the like. In the other, you make a request or offer seem so easy as to be a no-brainer – why wouldn’t I do this? What do I have to lose?

They called the juxtaposition the approach-avoidance model of persuasion: you can convince me of something by making me want to approach it and decreasing any reasons I might have to avoid it. According to Columbia University psychologist Tory Higgins, people are usually more likely to be swayed by one or other of the two motivational lines: some people are promotion-focused (they think of possible positive gains), and some, prevention-focused (they focus on losses and avoiding mistakes). An approach that unites the alpha with the omega appeals to both mindsets, however, giving it universal appeal – and it is easy to see how MacGregor’s proposition offered this potent combination.

He published interviews in national papers, for instance, touting the perks that would come from investing or settling in Poyais. He highlighted the bravery and fortitude that such a gesture would demonstrate: you wouldn’t just be smart; you would be a real man. The Scottish Highlanders were known for their hardiness and adventurous spirit, he wrote; Poyais would be the ultimate testing ground, a challenge and gift, all in one. He pointed those who needed more convincing to a book on the virtues of the small island nation, by the elusive Thomas Strangeways (actually MacGregor himself). His prospectuses enticed the public with their masterful promises, their lure of opportunity, their appeal to scarcity, their admonitions not to let this perfect moment pass by.

..... Psychologist Robert Cialdini, one of the leading experts on persuasion, argues that six principles govern most persuasive relationships:
  1. reciprocity (I rub your back, you rub mine)
  2. consistency (I believe the same thing today as I did yesterday)
  3. social validation (doing this will make me belong)
  4. friendship or liking (exactly what it sounds like)
  5. scarcity (quick! there isn’t much to go around)
  6. authority (you seem like you know what you’re talking about). Consider how many of those MacGregor used instinctively.

  1. Reciprocity: you invest with me, and I give you the opportunity of a lifetime – a life so wonderful that no one else can give you something comparable.
  2. Social validation: you will be the most Scottish of Scotsmen, the most respected of people, a pioneer and role model.
  3. Scarcity: act now, for this is not an opening that will remain. If Scotland doesn’t sweep Poyais up, someone else will – and there goes the nation’s one chance at colonial greatness.
  4. Authority: Dr. Strangeways surely knows that of which he speaks. If you don’t trust me, then at least trust him – though why wouldn’t you trust me? After all, I’ve published in the best media of the time.
Comment: Wiki article . All images from the Wiki article except the graph below. Source.


Investing circa 1843

What ‘Panic’ Meant to Investors 143 Years Ago


You can see how an earlier era of investors thought of the term in this engraving, by the illustrator Frank Bellew for the cover of the Sept. 29, 1873, edition of The Daily Graphic, titled “Panic, as a Health Officer, Sweeping the Garbage Out of Wall Street.”

“Panic” appears to be dressed in rags, but in fact Mr. Bellew has portrayed him wearing breeches and a jerkin, or rough shirt, made of goat skin — an obvious reference to the Greek god. (This sculpture, from the 1st century A.D., shows how common that imagery was.) The garbage that Panic is sweeping out of Wall Street consists mainly of strips of ticker tape bearing such descriptions as “ROTTEN RAILWAYS,” “SHAKY BANKS” and “BOGUS BROKERS.” A few squawking ducks, one hobbling to the left between Panic’s feet, are trying to escape the wreckage — symbolizing the old Wall Street term “lame ducks,” or traders who bought stock with borrowed money they can no longer afford to pay back.

... In his unforgettable image, Mr. Bellew compares bad investments, and weak investors, to sources of disease. By spreading the fear that flushes out such “garbage” in the short term, panic ends up improving the hygiene of the market in the long term. That’s good for investors who have the staying power to outlast a panic — and bad for those who don’t.
Comment: Staying power ... a lesson from 1843. Image source.


Why I chose Laparoscopic Prostatectomy

Surgery day will be Wednesday March 2nd. I found these links very helpful:
After careful consideration, the consultation with multiple individuals, and much reading (2 books plus much on the Internet (including the above):

  • I personally interviewed three men who have received the diagnosis. One chose Cyberknife, another Proton Therapy, and another prostatectomy.
  • Additionally we had a lot of 2nd hand testimonies that were in the form of "my brother's experience" or "my Father's experience", et cetera. Examples:
    • Jim S's father had the prostatectomy
    • Eric E's friend had the brachytherapy
    • Roy W's brother had radiation
  • We met with a radiologist oncologist to discuss options
  • And yesterday morning we met with a surgeon
  • Based on our research and knowing that every man (and his wife if he is married) must make the best choice for them, we  chose surgery
  • I chose surgery because:
    • Pathological staging is not done with radiation (while with surgery the removed prostate can be examined in the lab).
    • Prostate surgery is often not an option after radiation  
    • I believe that with my age (66 ½) and expected lifespan (my Mother is nearly 96), that surgery is the better option for me.
  • Surgeons will be Nathan Hoffman and Daniel Zapzalka
  • At Methodist Hospital
  • Using the da Vinci Surgical System (image above)
  • We are:
    • Trusting the Lord: 1 Peter 5:7, "casting all your care upon Him, for He cares for you."
    • Confident: Philippians 1:6, "being confident of this very thing, that He who has begun a good work in you will complete it until the day of Jesus Christ"
    • Optimistic: Romans 8:31, " If God is for us, who can be against us? 32 He who did not spare His own Son, but delivered Him up for us all, how shall He not with Him also freely give us all things?"
  • Prayers appreciated!
Robotic surgery may be something like this .... 

Why I bought Intuitive Surgical (ISRG)

Intuitive Surgical


The idea of surgical robotics was little more than a curiosity until 1999, the year Intuitive Surgical introduced the da Vinci® Surgical System. Today, Intuitive Surgical is the global leader in the rapidly emerging field of robotic-assisted minimally invasive surgery. 
Comment: I'm not exactly "all in" as I only bought 1 share! Not my normal type to stock to buy .... almost exclusively purchase dividend stocks. On March 2nd, two surgeons will use a da Vinci robot to remove my prostate. Some cool videos below:

More on the stock:
Intuitive Surgical (ISRG) is a Zacks Rank #1(Strong Buy) that designs, manufacturers and markets the da Vinci surgical systems and related instruments. The da Vinci surgical system, which operates in hospitals worldwide, is the primary driver for growth. The system can be best described as a robotic surgeon, controlled by a human operator, which enhances visualization and precision for that operator. Benefits for the patients include less pain, less blood loss, shorter hospital stay and quicker recover. Intuitive Surgical has a market cap of $21 Billion with a Forward PE of 32. The company has Zacks Style Score in Momentum of “A” and is sitting only a couple percentage points away from its 52-week highs. Last week’s earnings were impressive, causing the stock to head almost 5% higher before pulling back. The company reported Q4 revenue at $5.89 vs $5.01 expected, with revenue coming in at $677 Million vs the $617 Million expected. Da Vinci systems revenue was up 8% year over year, while service revenue was up 9% over the same period. Worldwide da Vinci procedures were up 15% year over year, showing the popularity and momentum of robotic surgery. EPS surprises are nothing new for the company, surprising to the upside six out of the last seven quarters. Estimates are also heading higher, with analyst revising numbers higher for 2016 and 2017. Intuitive has been a very volatile stock that has had issues in the past. One of these issues has been reoccurring lawsuits, which accused the surgical system to be flawed and cause health complications. Lawsuits are troublesome and risks to the stock, but investors are shrugging them off for now as the stock approaches all time highs.

Jollibee, a national treasure in the Philippines, comes to the US

Jollibee USA

Already 34 US locations


"The Thing" expresses how I feel about Cancer

Comment: That being ... "bring the flamethrower!". The Thing (1982): The film's title refers to its primary antagonist: a parasitic extraterrestrial lifeform that assimilates other organisms and in turn imitates them

Johnson Controls: Another Inversion Deal because of a failed Corporate Tax System

Johnson Controls, Tyco to Merge in Inversion Deal - Merger will place combined companies’ headquarters in Ireland, Tyco’s home


Johnson Controls Inc. and Tyco International PLC agreed to merge, the companies said Monday, in a deal that will place the combined company’s headquarters in Ireland.

Under the terms of the agreement, Johnson Controls will own about 56% of the merged company. The new firm will be renamed Johnson Controls PLC and maintain Tyco’s Irish legal domicile. The companies said the merged entity would save at least $150 million a year on taxes and at least $500 million in costs over the first three years after the completion of the deal.

Johnson Controls Chief Executive Alex Molinaroli will lead the firm for 18 months after the tie-up is complete. After that term, Tyco CEO George Oliver will become CEO and Mr. Molinaroli will become executive chairman for a year, after which Mr. Oliver will become chairman and CEO.

So-called inversion deals, in which U.S.-based companies acquire foreign-based businesses to take advantage of the more favorable tax status, have popular—and controversial—in recent years.
Comment: Last year was Medtronic . Image source.


In this dismal market - are there still stocks to buy?

The market sell off that many anticipated has arrived and we are likely in for a rough ride for 2016. I am convinced that value investing is still a valid investing option. I look for companies that:
  • Have a product or products that consumers will buy!
  • Are earning income
  • Have a solid track record even in difficult times.
  • Have low or moderate P/E scores
  • And pay a dividend
Here are a handful and why I like them:
Image source. My own philosophy is to buy a stock that one can hold onto through market swings. If that company can be profitable and will distribute a dividend through tough days, it is a valuable investment.