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Allen Iverson Earned Over $200 Million In His Career. Now He's Reportedly Broke.

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The_Ripper:
Allen Iverson - who has earned over $154 million in salary alone over his stellar NBA career — is broke. That number excludes his tens of millions more in non-salary income, including a $50 million lifetime endorsement contract from Reebok. And the player best known as "the Answer" has no easy answer for the bills, including around $859,000 he currently owes to a Georgia jewelry store (too bad he didn't have Newt's credit line at Tiffany's). He made the Iverson equivalent of pilaf to play in Turkey and was offered plantains to play in Puerto Rico. Now comes an insulting offer to play indoor soccer for the Rochester Lancers. It's a sad and shameful denouement for a man who, pound-for-pound on his six foot, 165-pound frame, is the most gifted and fearless guard to ever play pro basketball.

Most sports fans saw this day coming. Some will point to Iverson's role in a controversial bowling alley brawl in Hampton, Virginia back when Iverson was in high school. Though Iverson ended up serving four months in prison for the crime, Georgetown coach John Thompson — in his defining Lawrence Phillips moment — overlooked the incident in recruiting Iverson, and Virginia governor Doug Wilder eventually granted Iverson clemency. Fairly or unfairly, the affair tainted Iverson's reputation and telegraphed his later troubles.

Perhaps the telltale indicator of Iverson's divorce from financial reality, however, was an anecdote I received via a former teammate of Iverson's from his days with the Philadelphia 76ers. This player, raised on a far higher standard of fiduciary responsibility, was amused and stunned by "A.I.'s" money habits. He related how on many road trips Iverson refused to carry baggage, evidently seeking to remain as unencumbered from physical things as he was of basketball defenders. Because of this habit, Iverson would buy a full selection of new clothes, shoes, and other expensive items at each new destination with rolls of cash he carried on his person. Moreover, upon departure, he would leave all those goodies behind in his hotel room or just give them away.

The Forbes education writer in me can't help but draw painful lessons from Iverson's financial behavior. For instance, I calculate that even if Iverson had passively invested (say, in a broad-based index fund like SPY) only half of the more than $200 million he reportedly made over the past sixteen years, and wantonly squandered the rest, the amount he invested would have at least kept pace with inflation. I am not talking hedge funds or sexy IPOs. I am talking large-cap staples of the American economy, with no vig at all to the money management sharks, Ponzi schemers, and private equity shysters that circle pro athletes and their posses. A high-rated, tax-free, long-term municipal bond ETF like MLN might even be safer, if not always more profitable.

As I learned when my beloved mother — an accumulator of seemingly expensive things - suddenly passed, most material things don't carry much resale value. Yet celebrities in general, and pro athletes in particular, think they do. Blinged-out, overly customized, and hard-to-resell mansions, diamond-studded watches, Gulfstream jets, fur coats, cheesy overpriced jewelry, and the requisite Bentley's all lose their value over time. Cars, no matter what the brand, lose value as soon as they are driven off the lot. Same goes for planes. In only rare cases does a watch grow in value. Ditto for jewelry, especially garish jewelry. The best and safest way to grow money over the long-term is through investing in dividend-paying stocks. Boring? Yeah. Not very "street." But, as a former German girlfriend once told me, "To be radical in your art, you need to be safe in your life."

As much as I admire Iverson as a player and even enjoy his inimitable, incorrigible bad boy charm, it is still a tragedy that someone in his expansive network of takers, enablers, handlers, and sycophants did not at some point pull the point guard aside and be a genuine financial friend. And I don't mean the lecture that all rookies receive that 60% of NBA players are broke within five years of leaving the game. That lecture is obviously not working. A genuine financial friend would have spoken ongoing, unvarnished, personal truth: lose the lottery mindset, dump the hangers-on, drop the traveling hair stylist, and, instead, start saving and investing wisely. A bona fide financial friend would have done the difficult thing and gotten the league or the players union to hold Iverson's paychecks in escrow.

Moreover, an NBA that cared more about its personnel and brand would have required that Iverson, as well as all players, pass a yearly financial planning and retirement course before they were allowed on the hardwood (including how to read a financial statement, why to run from promises of a "guaranteed" return, and how a rock-solid prenup, living will and family planning can prevent you from getting soaked by a gold-digging ex).

Now, Allen Ezail Iverson is broke, his wages garnished, his Wells Fargo bank account out of his control. Moreover, those fifty or so "friends" and "family" that lived off, or milked, Iverson's naive generosity are running for cover. As of today, Allen Iverson joins the unholy pantheon of all-time-profligate sports spendthrifts - from Derrick Coleman to John Daly, Sheryl Swoopes to Mike Tyson, to Diego Maradona, Latrell Sprewell to George Best - who each squandered a king's ransom because of a lack of financial education and the desire to pursuit it.

Javii:
How fucking hard is it to hire a financial adviser for these idiots?

The_Ripper:
take a look @ this article:
http://sportsillustrated.cnn.com/vault/article/magazine/MAG1153364/1/index.htm

Javii:
Yeah, they've made bad investments.  That's where a financial adviser can say, "Foo, stop trying to start a million businesses and hope one hits"

rayallen0:
It amazes me that he can't get enough sponsors to make atleast another million to live off of? I know i would still buy his shoes if he had a brand. Dude influenced alot of people's game into being much better ball handlers.

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