Riches to Rags: Millionaire footballers who lose everything

[Neil Young]

What's the official failure rate for new businesses/investments? Are footballers really any different to the national average?

Good question.

[Baracus]

What's the official failure rate for new businesses/investments? Are footballers really any different to the national average?

I can't give a % but generally New Businesses/ investments if they are going to fail, fail completely within 3 years according to reports I read many moons ago.

[Liverpool]

Interesting idea but impossible to implement as a player could leave a club in 6 months and end up playing for multiple clubs

so whatever hes earnt in that time period is split up into payments over a long time, same with his new club?

[saj]

so whatever hes earnt in that time period is split up into payments over a long time, same with his new club?

For that to work, he would basically need to be paid after he leaves the club as it would be impossible to know what he would earn at a club and how to split it until he leaves. That implies he would basically not get paid until he leaves after which the payments would kick in over a 30 year period. I suppose he could he get paid a little (say half his salary) and the other remaining salary would get paid to him over a period of 30 years so effectively it's like a pension. The big problem with that is if the club goes bust/bankrupt, the player would lose the money.

[Neil Young]

The other big problem is that it's illegal.

[Liverpool]

well if he signs on a 5 year deal, and gets paid over 25 years. Leaves after a season so only gets a fifth of 25 so 5 years? simples

and re the club going bankrupt the monies is paid into a seperate trust by the club, simples

[Liverpool]

The other big problem is that it's illegal.

is it? I know a chap in a band whos on a similar deal

[saj]

well if he signs on a 5 year deal, and gets paid over 25 years. Leaves after a season so only gets a fifth of 25 so 5 years? simples

and re the club going bankrupt the monies is paid into a seperate trust by the club, simples

OK your first point makes sense. But with regards to the trust, that means the club has to make lump sums for every player into the trust which will bankrupt the club as it will have no cashflow

[Eric Swindler]

I don't know why one wouldn't have sympathy for these lads. Most of em come from poor backgrounds, then suddenly have loads of cash, and then lose it all again. Surprised it doesn't happen more to be honest.

[dom9]

For that to work, he would basically need to be paid after he leaves the club as it would be impossible to know what he would earn at a club and how to split it until he leaves. That implies he would basically not get paid until he leaves after which the payments would kick in over a 30 year period. I suppose he could he get paid a little (say half his salary) and the other remaining salary would get paid to him over a period of 30 years so effectively it's like a pension. The big problem with that is if the club goes bust/bankrupt, the player would lose the money.

The money could be invested in an annuity. Then it's out of the club's hands and the player has a guaranteed income.

I don't know why one wouldn't have sympathy for these lads. Most of em come from poor backgrounds, then suddenly have loads of cash, and then lose it all again. Surprised it doesn't happen more to be honest.

Let me introduce you to Saj.

[Muddled]

I'm in the 'sympathy camp'.

What some *normal* people might forgo to keep up with the Jones', footballer's may forgo to keep up with their teammates and then it's all relative. Missing a £500 mortgage payment to us is on the same scale as a footballer writing off a £100k home.

The majority of us have learned the value of money, whether that be scraping together a meal or saving for that item classed as a luxury - these players have had ridiculous amounts of money thrust at them and everything is suddenly obtainable.

Someone spending beyond their means deserves as much support as the next guy whether they earn £25k a year or £25k a day.

[Neil Young]

is it? I know a chap in a band whos on a similar deal

Maybe because it's his band, in legal terms I mean, so he's not an employee etc.

I'm not a lawyer so could well be wrong but I have the strong impression it's illegal for your employer not to pay you in full for all work done at the end of the current month (if you're paid monthly) or current week (if paid, er, weekly). That's why we're all paid at the end of the month/week as it is and if it was possible to pay you later, all employers would do it - the fact they don't is because they can't.

Obviously bonuses are different.

[Fredo]

Not at all. Feel free to twist I have said . Hendrie has said he spent lavishly - who's ****ing fault is that?

There are things beyond people's control that lead to them running into financial difficulties, you feel sorry for those. Banks for example are partially (but not totally) to blame for allowing people to get high mortgages for properties the customers could not really afford. So when the market crashed, mortgage rates went up and the number repossesions went through the roof etc etc.

It's those who lose control who only have themselves to blame and there is plenty of people. I will give you an example: I purchased a repossesed property. The person who lived in the property I purchased had money troubles for what apppeared to be over a year. He had plenty of opportunities to sell his property and I know this as I found various letters. I also found a reciept for a Louis Vutton item that had been purchased in his name for well over a £1000 just a month before the flat was repossesed. So even though he was in financial difficulties he was still spending £1000's of pounds. Does that make him an idiot?

I'm sorry - I do not feel sorry for any footballer who runs into money issues. There is plenty of heavily regulated Wealth Managers out there who specialise in creating investment portfolio's for high net worth individuals such as footballers. If Hendrie trusted his mate's Tom, Dick and dirty Harry to invest his money, then he is a eejit and only has himself to blame

You work in finance right? Typical reaction. You're probably happy to be paid to make these people bankrupt.

[saj]

You work in finance right? Typical reaction. You're probably happy to be paid to make these people bankrupt.

No I don't. I'm a IT Business Analyst. I believe the onus is not only just on the banks to manage customers risk, it's mainly on the customer to do so. For example when I purchased my property, I only put up half my equity as a deposit as I wanted to have that rainy day fund that would allow me to continue to pay my mortgage for several months if ever I lost my job. I also purchased a property well below what the banks were willing to offer me. It's simple risk management or rather common sense. Banks are not entirely to blame IMO.

The FSA are going to make it even harder (next year I think) for people to get mortgages with tougher regulations that banks will need to be meet when assesing customers who wish to take out mortgages. I won't go into the specifics as this going off topic but the number of people getting mortgages is going to go down significantly.

[Kenneth]

We have the same job. Great isn't it?