Any NHL fan of the last couple of decades or so will probably recognize the name of Chris Pronger. Recently he took to Twitter to vent about wealth management, particularly how it relates to the predatory nature of some advisors for professional athletes. Regardless if you think professional athletes make too much money or not, he does have some valid points for everyone, regardless of income.
Chris Pronger spent 20 years in the NHL and became a measuring stick for other defensemen. He won the Hart Trophy as league MVP in 2000, the first defenseman to since Bobby Orr almost three decades earlier. He was big, skilled, and also not a pushover, collecting over 1,600 penalty minutes.per Ron Brown, with Kiplinger
Here are a handful of points from Pronger.
The Money Train Eventually Reaches Its Stop
Pronger said that athletes tend to be wasteful early on in their careers and think that the money train continues in perpetuity. However many athletes can be one injury away from retirement. When Pronger turned pro in 1993, a lot of players made ~$300k/year, and Pronger also had a $1M signing bonus. Now, many NHL players make upward of around $2M. Even with a large amount of money like that, there are numerous expenses to take into consideration. He tweeted that on that median salary, approximately 39-56% in taxes can come out, 3-5% in agent fees, escrow, and more. Other misc expenses might include a chef or nutritionist, an off-season trainer, and potentially $5K-10K/month for a home near the team practice facility. Also, many athletes don’t recognize the tax trouble they could get into if they haven’t allocated properly. He admits that the earnings are great, with an easy chance to spend a lot, but the income doesn’t last forever. With this, he also advises athletes to stay on their guard from predatory advisors.
‘They Assume We Don’t Read The Paperwork’
Pronger continues that he and former teammates would joke that there were professional deals, and then athlete deals. He mentions that financial advisors, lawyers, and more, assume athletes don’t read the paperwork, and then in turn charge more for their services than the average person. There was a common scenario that he and other athletes might often see a pitch for an investment that might need $500k and would close in three days. Why? They aren’t able to get money from allegedly more sophisticated investors.
Another interesting piece of advice that he brings up, after having made a few mistakes on his own: If someone needs an answer right away, the answer is always NO. Athletes get convinced to give power of attorney to advisors, meaning a lack of control of their money.
Hey! Remember We Went To School Together?
His last point is that many athletes also have a hard time letting go of their friends back home. Unfortunately, he mentions this can lead to athletes having an attitude of “if one of us makes it, we all make it.” In return, this can lead to unqualified friends on your payroll, investments in deals just because they grew up together as well as huge entertainment deals. He advises being vigilant about saying no, which can admittedly be tough.
Summing It Up
I know we as sports fans often scoff at the notion of professional athletes complaining about money troubles, and perhaps understandably so at times given the continual skyrocketing salaries. But I thought Chris’ thread was fascinating (he’s a great Twitter follow as well), with some great advice that we could all heed. Remember to budget accordingly, be mindful of any potential agreements/read the paperwork, and at the end of the day, personal finance is personal, regardless of your income. I’d be curious about everyone’s thoughts on this, now that his initial Twitter thread on this has been out for a while. Be sure to leave a comment below!
If you’re looking to get your finances and budgeting back on track, I highly recommend checking out You Need a Budget. It’s been my favorite personal finance software to use over the years, and I love the concept of budgeting with money you have now versus what you THINK you’ll have. If you use the link, we’ll both get a free month!
Be sure to like, share and subscribe!