Taxes are especially pernicious for athletes. Beyond the fact that they can't structure their income to get out of the top tax brackets like those in the busine

Taxes are especially pernicious for athletes. Beyond the fact that they can't structure their income to get out of the top tax brackets like those in the business world (there's no stock compensation, dividends or anything else that turns their compensation into capital gains), athletes also have to file a state return and pay taxes for every state that they work in, and away games count as work. But it's not really taxes that are the problem. ESPN's "Broke" documentary covered it well and it's a combination of many factors. Financial literacy is high on the list. One story told in the documentary has a rookie cashing his $500k signing bonus at a check cashing store because that's the only thing he knew to do with checks. When you're underbanked, simple things like t-bills or index funds and even checking accounts are a part of a completely separate world. The second is lifestyle. When you're new to the league, everyone is buying expensive cars, jewelry and other frivolous purchases and there's pressure to keep up. And since you're traveling with your teammates, they're your social circle as well, so expensive meals out, clubs and other distractions on the road end up costing money. And being known to have lots of money makes you a target, both for people you knew before going pro and for women who see child support as a ticket to a better life. And the common pattern is that players live it up and don't save much in the first half of their careers and then realize that there's going to come an end to the high income stream and that they need to make it last the rest of their lives, only to find that simple, stable investments aren't going to get them to a point where they can provide for everyone they feel responsible for once they're out of the league. So they end up chasing long-shot investments that almost always result in a total loss, making the problem even worse. Some of this isn't much different from most people in other professions. The main difference is that athletes have their prime earning years during a time in their lives where they're still financially irresponsible. I know most of my friends didn't save much during their early-to-mid 20s. We spent way too much going out to bars and clubs, bought toys that were way more than we should have been spending and basically lived paycheck-to-paycheck despite the fact that we could've been saving a bit. These guys have that same period, just with a lot more money. But whereas the rest of us get to keep earning until we retire in our 60s/70s, often with the highest salaries coming near the end, these guys have their prime earning years end, often abruptly, usually well before the age of 40.