Hacker Cinema
Broke
2020 · TV series · 25 min episodes · 1 season
Created by Alex Herschlag
Single suburban mother Jackie is shocked when her estranged sister, Elizabeth, her sister's outrageously wealthy, big-hearted husband, Javier, and Javier's fiercely loyal assistant/driver/friend land on her doorstep in need of a place to live after the couple's money dries up.
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5 comments on Hacker News
ESPN's 30-for-30 episode "Broke" is a great watch. It does seem though that newer generation athletes are a bit better educated in that matter since they're better connected online, but that might just be anecdotal.
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.
"a few of them end up just enjoying themselves"
The studies about people that win money that I've seen paint a different picture: 75% lose it all within 5 years by not spending wisely. It's the same with professional sports players and it's gotten so bad, they have started getting them mandatory professional money managers. I believe there is a Netflix documentary about it called "broke".
People that inherit money also end up losing their money at crazy rates unless they already had good money management skills/work for a living/were taught these skills by their parents.
I don't see how this would be any different with a basic income. Not to mention the inflation caused by it. For starters, all businesses will have their prices raised automatically to pay for the new taxes imposed on them.
In the very beginning, it might be okay in terms of economics. However, as the years go on, more and more people will start relying on this basic income and we will have entire generations of people depending on it to live.
Costs will only increase and there will be less people actually contributing to the tax base, so the only way to continue to pay for it is tax increases on the middle class and everyone else making a living. It's basically just another wealth transfer scheme to people that never earned it.
The sad fact is that the vast majority of people never really appreciate things they haven't earned and although a basic income sounds nice in theory, it's a flawed idea that is doomed to fail.
i can't speak to their respective backgrounds, but there was an ESPN documentary not too long ago that explored the post-playing career trajectories of professional athletes for major sports
Edit: ^^yeah, "Broke" that's the one
Nope.
http://www.npr.org/2015/01/27/381724445/how-do-some-highly-paid-athletes-go-bankrupt-theyre-risk-takers
See also the ESPN Documentary (a good one) called "Broke."