This is a story of another once-rich athlete who wasted millions of dollars. It’s also a lesson that shows again that having more money doesn’t bring more happiness.
Basketball star Vin Baker was profiled recently in the Providence Journal. His is a story of financial recklessness but, finally, some redemption.
“Baker was the eighth player picked in the 1993 draft after his starry career as Hartford’s all-time greatest hoopster,” wrote the Journal’s Kevin McNamara. “He signed a 10-year, $17.5 million deal with the Bucks and within two years was an all-star. He was traded to Seattle in 1997, where he signed a seven-year, $86 million deal.
But “toward the end of his 13-year NBA career, Vin Baker was battling alcoholism and on his way to blowing over $100 million in earnings,” The Washington Post’s Des Bieler wrote about the four-time all-star.
Bieler goes on to write: “Baker knows that he is a cautionary tale for current NBA players, especially young ones who have recently been handed dizzying amounts of money. He doesn’t want them to go down his road, although he is a living example that there can be light at the end of almost any tunnel.”
For Baker, that tunnel has led to a job as a Starbucks barista, according to the Journal profile. He is training to manage a franchise.
So how do you blow through $100 million?
His “addiction, plus a series of financial missteps ranging from a failed restaurant to simply too many hands dipping into his gold-plated cookie jar, combined to wipe out nearly $100 million in earnings,” McNamara writes.
This is what Baker said about his lost fortunes: “When you make choices and decisions and think that it will never end, and then you get into spending and addiction and more spending, it’s a definite formula for losing. If you don’t have perspective in your personal life and you don’t understand what this $1 million or $15 million means, it will go.”
Now most of us won’t have the millions Baker made or see the kind of income made by NBA stars. Nonetheless, his caution still applies.
Don’t “take the money for granted,” Baker said. “It can be here today and gone tomorrow. It can be gone from the wrong financial choices and decisions and people that you’re involved with or, in my case, gone from things that you struggle with off the court.”
Here’s a story of how one super well-paid athlete is managing his wealth well.
The fact is you can go broke on $100 million. Just spend $101 million.
Color of Money Question of the Week
This week’s Color of Money Question: How do you avoid living above your means? Send your comments to firstname.lastname@example.org. In the subject line, put “How Do You Go Broke on $100 million?” Please include your full name, city and state.
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Money Milestones for Young Adults
I recently spoke to a group of millennials, and the best advice I could pass along is to take advantage of time. That is one of the so-called secrets to wealth building. The sooner you start saving, the more you have.
“Your 20s are when adult things start happening, and the way you handle them can ripple through the rest of adult life,” wrote Washington Post business reporting intern Thad Moore. “Start saving and taking care of your credit now, and you could save thousands of dollars later on.”
Moore lays out five financial moves every 20-year-old should make. And, hey, the advice applies even if you’ve got some years on you.
Mom, Dad: It’s Your Fault I’m a Financial Failure
Speaking of young folks, last week, I stumbled across a story about a college student that really hit a nerve with a lot of people. The story unfolded on “The Bert Show” radio program. A student called into the show and confessed she had spent part of her college money. Her grandparents had given her $90,000 to send her to college. She’s entering her senior year and is short $20,000 for her last two semesters because she blew some of the money on a European trip, clothes and other stuff.
If you haven’t heard about the story or listened to the interview, you just have to. Here’s the link.
In the course of soliciting advice from the hosts, the young woman said this about her parents and their unwillingness to loan her the money she needs:
“Maybe they should have taught me how to budget a little bit more carefully. They never sat me down and had a, like, a real serious talk about it.”
For last week’s Color of Money Question of the Week, I asked: Do you think the parents are to blame for this millennial’s poor money management?
“Wow! Just wow,” wrote Mary Lou Hart of Portland, Ore. “I was frustrated with her situation, but more so with her lack of responsibility. She was given so much more than many other people, and yet she waited and until the 11th hour to even admit the problem. Then she is looking for anyone else to solve it for her without any work or pain on her part.”
Hart continues: “After listening to everything, my guess is her parents decided to use the school of hard knocks because nothing else was getting through. They had to know she was using college funds to go to Europe since she didn’t have a job; they had to notice the new clothes and possessions she was coming home with. And they taught her enough about finances that she knows her parents have been saving for themselves for years (while working). Yet she feels vindicated in being upset that they won’t give her their hard-earned and saved money for free with no guarantee of ever being paid back, and they won’t co-sign on a loan for her that she doesn’t have a way to pay off. It truly is a sign of entitlement.”
“I don’t think the parents are wrong,” wrote Vickie Wilkins of Locust Grove, Va. “The parents themselves may not know about money management. She only assumes they know. Depending on what era they grew up in — it was taboo to talk about money. Young people today have to take responsibility for their actions. There are too many financial publications, radio or TV talk shows and financial seminars that are geared to helping young people today. Your column is a prime example.”
Dean Fleming of Falls Church, Va., wrote: “Yes. The parents are mostly to blame. Period. Parents that fail their kids would probably not admit it, but that is the reality. Most likely, the parents overspent and overborrowed as a rule. Their kid just followed their lead. Sad that most people were never taught basic money management whatsoever by their parents. It is also disappointing that our school systems have failed miserably in this regard. Shameful.”
I’ll end with Lisa from Washington, D.C. She wrote: “I don’t think her parents are completely to blame, but I agree with her point that they should have taught her more financial responsibility. I can kind of relate, as I have some major student loan debt, like many people. My parents never explained to me what it meant to sign away. I have spent my entire adult life paying for these choices — choices which have come at the cost of owning a home, traveling, having decent savings, etc. I am 36 years old, about to have my second child, and I still have about 4.5 more years of $1,000-plus per month loan payments. While I would never say it is all their fault I am in this position, it’s tough not to feel some resentment toward my parents for not guiding me better as a young person when I was embarking on such a huge financial commitment. What my experience has taught me is to never let this happen to my children because I will make it a priority to teach them financial responsibility.”
Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C., 20071, or email@example.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to www.washingtonpost.com/business.