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Old 07-30-2019, 02:16 PM
 
Location: Knoxville, TN
1,231 posts, read 601,731 times
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Quote:
Originally Posted by BigCityDreamer View Post
A lot of pro athletes seem to be in the same category, even though they are exceptionally gifted in one particular area.
Dumb jocks caught up in their fame and playboy status. Again, I don’t mean to sound so cut and dry, but it is what it is.
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Old 07-30-2019, 02:27 PM
 
5,563 posts, read 2,358,693 times
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Quote:
Originally Posted by JONOV View Post
Funny you mention physicians...I've heard a version of that story enough (and it certainly doesn't require a goofball wife) that sometimes I think the only difference between them and pro athletes is that their knees don't affect their income. I know of one that's averaged $500K/year and at 60 doesn't yet have $1 Mil in retirement and who has to be bound for a lifestyle downgrade, another that works in his mid 70's because he can't afford to retire, a third that worked into his early eighties because he had three ex wifes and a lot of alimony, guys that have been sued by their partners, etc...

Doctors are absolutely horrible business managers for the most part. They almost to a person succumb to the belief that expertise in one area means expertise in all areas. And the better they are at their specialty, the more they subscribe to this.



Worked with a national group of surgical practices out of Boston. This company made their bones by finding outpatient surgical practices that were in money trouble, buying them out, and creating a number of efficiencies, and making money hand over fist. When a surgeon signed on the dotted line, his job went from running the practice to showing up and making sure the patient outcomes were good. Just a little common sense and discipline kept a lot of surgeons from having the fate of the surgeon above.
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Old 07-30-2019, 02:39 PM
 
5,563 posts, read 2,358,693 times
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Quote:
Originally Posted by Mister 7 View Post
Dumb jocks caught up in their fame and playboy status. Again, I don’t mean to sound so cut and dry, but it is what it is.

Pretty much hand any 21- or 22-year old a massive amount of cash and most will blow it.


I was asked to consult for a guy who was a db for an NFL franchise. He was a second-team guy, but made really good money. Nice guy and pretty sharp. His wife, however, was the brains in the family.



They had just been deluged with people coming to them with business schemes and they turned them all down. Then they were approached by a third-rate sub sandwich franchise. They hadn't signed on the dotted line, but they were looking for advice and were referred to me.



It took me about five minutes of going through the prospectus to realize that this would be an awful deal for them. Even in the franchisors' ideal working example, they would net maybe 4%. And that's if everything was running on all cylinders.



So I slid the prospectus back to them and said, "Don't do this." I then advised the following:



1) His business was playing defense. Anything else was a distraction unless it was doing something easy and quick like doing a testimonial at a car dealership or something.


2) Live as cheaply as possible. Our meeting was in early summer. I pointed out that anything could happen. He could get cut in pre-season. He could blow out a knee. Anything. So take the cash and salt it away. Don't even buy a new car.



3) Don't invest in a business because you could always get traded. Sure enough he was traded to the Bengals the next year.



The last time I heard, the guy was coaching high school in Georgia. He was still married to that same woman and has a couple of kids. I hope my advice helped contribute to what, by all accounts, seems to be a pretty happy life.
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Old 07-30-2019, 03:21 PM
 
32,811 posts, read 16,769,064 times
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Quote:
Originally Posted by MinivanDriver View Post
I've worked with any number of multi-generation, family-owned companies. With few exceptions, they follow a similar arc:


First Generation -- Company founder who had a great idea or business model, worked his butt off, took a couple of calculated risks, and wound up incredibly successful. Typically charismatic.

Second Generation -- Typically kids who usually still have a strong work ethic, but lack the Old Man's dash. These are people who are more about not squandering their lead.

Third Generation -- These are the ones most likely either blow the money or start the long spiral downward. They don't want to work in Grandpa's company. They want to do other things. Or they just take the money for granted and live off the trust funds.
You know my wife's former boss?

Inherited a bundle of business properties that provided an extremely nice lifestyle - Centurion Amex, staying at George V when in Paris, house in Palos Verdes. But property management is boooring and he convinced himself he could do better if he sold the lot and invested the money. The "selling" bit went well, the "investing" - well, there was all that money and surely he deserved a to spoil himself a little and all of his friends did all this fun stuff...

Not exactly poor, these days, but certainly not living the high life either.
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Old 07-30-2019, 03:46 PM
 
Location: East Coast of the United States
17,395 posts, read 19,675,768 times
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Quote:
Originally Posted by MinivanDriver View Post
Pretty much hand any 21- or 22-year old a massive amount of cash and most will blow it.
Which is curious for me to read, since I have been a saver since I was at least 11 years old.
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Old 07-30-2019, 05:21 PM
 
2,310 posts, read 795,112 times
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Quote:
Originally Posted by MinivanDriver View Post
Doctors are absolutely horrible business managers for the most part. They almost to a person succumb to the belief that expertise in one area means expertise in all areas. And the better they are at their specialty, the more they subscribe to this.
A friend married to a doctor who managed their retirement funds confided that he'd been buying on margin- without her knowledge- and 50% of their savings disappeared in the burst of the dot-com bubble. They were in their mid-40s and I lost touch with them but I hope they recovered. Even though I handled all the investments in both my marriages (first husband irresponsible and clueless, second husband very sensible financially but jost not interested) I never would have done anything that risky without the agreement of my spouse.
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Old 07-30-2019, 05:36 PM
 
Location: Wartrace,TN
5,605 posts, read 8,962,929 times
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Seems like a consistent story with one correlation; Addiction.

1)Drugs/alcohol
2) Unsuitable relationships.
3) Gambling.
4) Ego.
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Old 07-30-2019, 05:45 PM
 
Location: Wonderland
45,417 posts, read 36,555,842 times
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Quote:
Originally Posted by Mister 7 View Post
Yeah, and what's sad is that there are so many people who don't seek help for it. It can be managed for the most part with a good psychiatrist and medication but many people just won't take the neccesary steps to get help. I suffer from mental illness and have a huge inheritance coming my way down the line, I will say even if I was full blown certifiably insane I wouldn't be stupid with the money, however.
My brother's inheritance went into a trust and so far so good.
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Old 07-30-2019, 05:46 PM
 
11,303 posts, read 8,509,425 times
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Baby Doe. I just visited the Leadville CO museum.
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Old 07-30-2019, 06:00 PM
 
Location: Knoxville, TN
1,231 posts, read 601,731 times
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Quote:
Originally Posted by MinivanDriver View Post
Pretty much hand any 21- or 22-year old a massive amount of cash and most will blow it.
That's a good point. I did, once. When I was around 24 my great aunt left me about $36,000 cut into $12,000 x 3 at different times and I completely blew it on bullshyt, designer crap, Louis Vuitton iPod cases and bandanas. Designer sunglasses. Expensive shopping trips. I paid cash for a nice used Infiniti (which I blew the transmission on not long after and traded it in, then had car payments) The only smart thing I did buy was a Rolex which has appreciated over the last 12 years.

I can't even think about it bc I'll get sick over it, I'd probably have $100,000 today if I was smart with it.

That being said, I would never blow through millions, ever. I'm not that dumb. Even if I was 18. I know of a guy who blew through 3 million dollars, didn't even have a house to show for it. All that was left was a crappy Jaguar X-type that had thousands of dollars of exterior damage.

Quote:
Originally Posted by KathrynAragon View Post
My brother's inheritance went into a trust and so far so good.
Good! He otherwise wouldn't be responsible with it? Your parents were smart. I'm not sure what is set up for me but I know I'm "set". My mother has a great estate attorney and financial advisor. I could buy a $100,000 car when the time comes (I love cars, my thing) but I never would. My family has always had money but they aren't extravagant in the least. And the older I get the more frugal (but not cheap and obnoxious) I get.

Quote:
Originally Posted by BigCityDreamer View Post
Which is curious for me to read, since I have been a saver since I was at least 11 years old.
That's because you've been steadily saving since age 11. We are talking about people being handed huge amounts of money, or blowing their livelihoods; not money they've saved. You sound like a wise person!
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