The name George Karl may not jump out at you as an NBA legend, despite his winning more than 1,000 games as a coach in the league. But he is a character, for sure, as NBA nerds know, and during a recent interview, the outspoken coach might have just come up with a new tack for the financial advisory business.
In an interview with New York magazine at the end of last month, Karl talked about various NBA issues, some controversial, that he speaks to in his new book, “Furious George: My Forty Years Surviving NBA Divas, Clueless GMs and Poor Shot Selection.” At one juncture, he talked about the difficulty many players have with managing their fortunes.
“This is all part of the evolution of basketball players making millions of dollars when a lot of these guys don’t know how to handle that money. The league should be focused on helping the players not lose the money they earn. I’m 65 years old and I’ve lost a lot of money in bad investments because I wasn’t qualified to be making financial judgments. The league needs to do more to help its young men be more advanced financially. I know it has programs for players, but it needs to connect those players with financial institutions that can say, ‘We’re not going to guarantee that you’ll make money, but we can guarantee you’re not going to lose money’…. Me, of all people talking about finances, is stupid.”
Maybe It’s Not So Stupid
Some new players come into the league under the age of 20 with multimillion-dollar contracts, not to mention money-laden endorsements. Other veteran players sign midcareer contracts that pay $10 million or more a year for years.
However, there’s a long list of players who have fallen into the same trap Karl did, and many who have literally lost a lot or all their money in bad investments such as restaurants, car dealerships, speculative real estate, etc.
NBA great Tim Duncan recently sued his advisor over investment losses of $25 million. Fortunately for him, he can absorb the loss, after making $220 million over the course of his career. But few players endure and make that kind of money for so long. If this can happen to him, certainly it can happen to younger players.
This isn’t just a problem with NBA players, but high net worth investors as well. Keep in mind I’m not talking about retirement savings plans, but about preserving wealth that has been made.