New York Times: In Pro Athletes’ Finances, a Defensive Line Pays

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http://www.nytimes.com/2011/03/05/your-money/05wealth.html

PROFESSIONAL athletes have a horrible reputation for managing their money. It may be apocryphal, but one commonly cited statistic is that three-quarters of players in the National Football League have serious financial problems within two years of leaving the game.

But the reality is that most professional players do not get huge paychecks. Even among those who do, the savviest ones are not buying Bentleys and mansions for their families. They are renting apartments and driving modest cars, looking at the long term instead of the immediate. And given the uncertainty surrounding the 2011 season as labor talks continue, this is true now more than ever.

That is the case with Paul Posluszny, a linebacker who four years ago was a second-round draft pick in the National Football League and signed a four-year contract for $4.75 million with the Buffalo Bills. Of that, about $2.5 million was guaranteed; the rest was in performance incentives.

Still, with a $1 million signing bonus and a first-year salary of $285,000, it is fair to say that he was doing better than most of his classmates at Pennsylvania State who were entering the job market.

Yet Mr. Posluszny, the son of a teacher and a mechanic, said he was well aware of the financial problems that a rush of wealth had caused many professional athletes. And he did not want to be among them.

“I knew I wanted to be in something safe and secure,” he said. “A long career isn’t guaranteed. I wanted to have this money for life.”

Instead of trying to manage his money on his own — or worse, turn to a friend or family member — he found someone independent who could advise him and steered away from the people who promised him sky-high returns or asked him to invest in their schemes.

“I’d hear, ‘I’ve got a great idea for a bar or a car dealership,’ ” he said. “I knew they sounded too good to be true.”

Today, he lives in a modest townhouse in Buffalo, but does not own a car. Instead, he drives a Nissan Armada, which he gets to use in exchange for signing autographs and doing promotions at a local car dealership.

But many professional players “make a lot of money and save none of it,” said Ron Carson, the founder of the Carson Wealth Management Group, who advises Mr. Posluszny and several other football players. “The athletes we work with understand that things can change quickly. This is irreplaceable capital.”

The players who are the most successful at managing what Dana Hammonds, director of player services and development at the N.F.L. Players Association, called “sudden money” assume the worst. They budget, save and invest carefully — and that is something they