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Old 07-12-2017, 02:28 PM
 
Location: Pennsylvania
8,951 posts, read 3,114,068 times
Reputation: 7045

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Quote:
Originally Posted by Lowexpectations View Post
It's not great that your money is relatively inaccessible. What ultimately decideds if the deal is good or bad would require the full term to expire. The fact that most athletes end up broke is a sidebar issue and not one that decides if the deal is good or bad
It's not a sidebar issue at all. It's a major reason why a 25 year payout is an excellent plan for Bonilla.
You're arguing just to argue.
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Old 07-12-2017, 03:21 PM
 
17,605 posts, read 12,197,156 times
Reputation: 12821
Quote:
Originally Posted by BeerGeek40 View Post
It's not a sidebar issue at all. It's a major reason why a 25 year payout is an excellent plan for Bonilla.
You're arguing just to argue.
It is entirely sidebar as it doesn't prove a deal to be good just because a person is incompetent. If I held on to your 25million dollars and give you a mil every year that's not a good deal simply because you can manage your finances, it is compensating for your lack of ability but not necessarily a good deal. It's not arguing just to argue it's pointing out something entirely legitimate and your retort is what it normally is simply because you don't like the response
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Old 07-29-2017, 06:35 PM
 
Location: Pennsylvania
8,951 posts, read 3,114,068 times
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Quote:
Originally Posted by Lowexpectations View Post
It is entirely sidebar as it doesn't prove a deal to be good just because a person is incompetent. If I held on to your 25million dollars and give you a mil every year that's not a good deal simply because you can manage your finances, it is compensating for your lack of ability but not necessarily a good deal. It's not arguing just to argue it's pointing out something entirely legitimate and your retort is what it normally is simply because you don't like the response
By the way you're still wrong on Bonilla. Bonilla got the deal of a lifetime.
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Old 07-31-2017, 04:48 PM
 
Location: Union City, NJ
1,202 posts, read 682,608 times
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Quote:
Originally Posted by Lowexpectations View Post
You should care if you are going to take the time to post about it at least be a bit more educated on the deal and why it was done. The math actually doesn't make it a good deal for Bobby

I'd like to hear why this wasn't a good deal for Bonilla.

He was owed $5.9 million and will collect $29.8 million. He's earning an 8% annual return on his money. What other way could he have generated > 8% annual return that would be as safe as being owed the money by an MLB team?
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Old 07-31-2017, 04:54 PM
 
844 posts, read 358,558 times
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If you look at the cash flows, it's actually about a 6.5% return. The $5.9 million was originally due in 1999 - interest rates were significantly higher then, prime was above 8%, so there were definitely better investment options available.

Looks okay based on today's rates, but not when you look back to when it started.
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Old 07-31-2017, 05:06 PM
 
9,290 posts, read 11,138,237 times
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Quote:
Originally Posted by BeerGeek40 View Post
Wrong.
I'm plenty educated, pal. Considering that many sports figures wind up with no skills when they leave the game, and wind up overspending and filing personal bankruptcy (see: Alan Iverson)..... it's a great deal for Bonilla to get $1M every single year for 25 years. And these people say the same thing. Read it.


Money lessons from Bobby Bonilla
Actually Iverson has a similar deal......he had 32 million in a Reebok deal that he can't touch until he is 55:


In 2001, Iverson made a decision that would inevitably save him from his future self. He signed a very unique endorsement deal with Reebok. In addition to paying $800,000 a year for life, Reebok set aside $32 million in a trust fund that Allen will not be able to access until he turns 55 in the year 2030. This deal came to light when Allenís ex-wife filed for divorce. As a result of the divorce, Allen will inherit half the trust fund in 2030.
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Old 07-31-2017, 05:07 PM
 
9,290 posts, read 11,138,237 times
Reputation: 12464
Quote:
Originally Posted by SuiteLiving View Post
If you look at the cash flows, it's actually about a 6.5% return. The $5.9 million was originally due in 1999 - interest rates were significantly higher then, prime was above 8%, so there were definitely better investment options available.

Looks okay based on today's rates, but not when you look back to when it started.
He also inked the deal in 2000 but the payments didn't start until 2011......11 years of accruing interest on the total amount.
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Old 07-31-2017, 05:17 PM
 
844 posts, read 358,558 times
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Quote:
Originally Posted by City Guy997S View Post
He also inked the deal in 2000 but the payments didn't start until 2011......11 years of accruing interest on the total amount.
Fairly certain it was 1999 and that was factored into the 6.5% calculation
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Old 07-31-2017, 06:59 PM
 
Location: Pennsylvania
8,951 posts, read 3,114,068 times
Reputation: 7045
Quote:
Originally Posted by City Guy997S View Post
Actually Iverson has a similar deal......he had 32 million in a Reebok deal that he can't touch until he is 55:


In 2001, Iverson made a decision that would inevitably save him from his future self. He signed a very unique endorsement deal with Reebok. In addition to paying $800,000 a year for life, Reebok set aside $32 million in a trust fund that Allen will not be able to access until he turns 55 in the year 2030. This deal came to light when Allenís ex-wife filed for divorce. As a result of the divorce, Allen will inherit half the trust fund in 2030.
Didn't know that. A.I. must have had a good advisor, because you're right - he needed to be saved from himself. One of the bigger knuckleheads ever to play pro sports.
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Old 07-31-2017, 07:25 PM
 
17,605 posts, read 12,197,156 times
Reputation: 12821
Needing to be saved from yourself doesn't make an investment or deferred comp a good deal it just means you were possibly too irresponsible to handle your money properly. If other options could provide a better return it's not a good investment decision
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